THE STORY: OPENING
Charlotte O’Hara, chief learning officer of TaRA (Technology and Research Associates), fumes down the corporate hallway, wisps of her crimson locks sucked into her angry vortex. She has just learned that her last assistant has been assigned to another department!
Interdepartmental warfare has left her once palatial training department in ruins. Repeated waves of downsizing, rightsizing, cutbacks, and outsourcing have plundered her budget and raided her pride. Gone is her corner office with floor-to-ceiling windows. And gone too, along with the windows, are her seven-figure budget, her real estate empire of classrooms and her staff of happy assistants.
How she has sunk. Now they avoid her in the hallways, fearing she will hit them up for cost-sharing. And in meetings with executives, she’s seen them roll their eyes and cringe when she has said, “I have an idea.” Even her one-time ally Ashley Wilkinson has been heard muttering, “And how much is this going to cost us?”
Returning to her office, she begins rummaging through coffee-stained white papers and other administrative documents covering the surface of her desk, the one thing she has saved from the corner office where she once held court for corporate suitors eager for the favor of receiving her training classes.
She’s been so angry she’s even thought of quitting! But a brief look at the world outside tells her that she’s better off to stay with a regular paycheck. She decides to stand and fight, but she knows that she has to do something different from what she’s always done before. Grasping one especially thick, thrice-revised budget proposal, she shakes her fist at the picture of the CEO on her wall and vows, “As Gawd is my witness, I will never be a cost-center again! I will become a profit-center!”
Charlotte makes a plan
Ripping the back pages off the budget proposal, Charlotte begins to list some of the ways her department can use e-Learning to claw its way back to the correct side of the corporate balance sheet.
- Sell e-Learning for profit
- Sell more conventional training
- Get products to market quicker
- Promote products and services, both inside and outside the organization.
Once her blood pressure and adrenaline levels drop a bit, Charlotte scans the list. She knows she will have to convince other executives (“the bankers” as she likes to call them) to go along with her plans. Convincing skeptical executives requires careful analysis, so Charlotte begins thinking about how to make the case for e-Learning’s bottom-line benefits in each of these areas.
The first one, selling e-Learning for profit, seems the most direct, but Charlotte realizes she will need to develop that one further. “I’ll worry about that tomorrow,” mumbles Charlotte to herself. “Today I’ll figure out how to use e-Learning to sell more conventional training.
Selling conventional training
Classroom training is Charlotte’s one cash cow, but that cow is looking a little wobbly at the knees. When she began proposing e-Learning as an alternative, many of the other executives pooh-poohed the idea, warning that she would just be swapping one source of revenue for another. “Trading your cash cow for a steak,” was how one executive put it. Charlotte was not convinced that this was true, and now she is spurred to action. “What if we used e-Learning, not to replace classroom training, but to make classroom training more effective, more economical, and more fun — that is, more profitable?”
Charlotte begins to hatch a plan. Could she use e-Learning offerings to draw attention to TaRA’s classroom training, demonstrate an ability to deliver high-quality training, and free up instructors and classrooms for use by more profitable classroom courses?
Charlotte does the math
Using a loss-leader to boost sales of more profitable items is not a new idea, but it is one that Charlotte will have to justify to her management. “Let’s see, says Charlotte. She recites the numbers from memory: We currently offer 100 classes a year, each yielding $5000 profit for a total of $500,000 added to the bottom line.
“Suppose we provide short “teaser” courses in e-Learning to interest customers in signing up for our classroom courses. If we could fill an additional 15 classes per year, we could generate $75,000 more revenue each year. The e-Learning courses need not be too expensive, say $150,000 spread out over three years, that is, $50,000 per year. Such a “teaser” course could yield a net profit of $25,000.” Before she forgets her figures, Charlotte enters them in a spreadsheet.
| Classroom offerings | 100 | Per year |
| X Profit per offering | $5,000 | Per offering |
| = Current annual profit | $500,000 | Per year |
| Additional classroom sales | 15% | |
| Additional classroom courses | 15 | |
| Additional classroom profit | $75,000 | Per year |
| – Annualized cost of e-Learning | $50,000 | Per year |
| = Total additional profit | $25,000 |
At least the economics are sound, and heading in the right direction.
Charlotte expands her plan
Buoyed by the prospect of using e-Learning to revitalize her wobbly cash cow, Charlotte begins developing a three-part plan. She will use e-Learning to enhance conventional offerings, to attract new customers, and to free up critical resources for more profitable duty.
Enhancing conventional offerings
Charlotte brainstorms ways to use e-Learning to make conventional classroom training offerings more profitable. She wants to make classroom courses more efficient, effective, and engaging so that she can charge more for these offerings, and so that they cost less to offer. Charlotte comes up with three strong approaches:
- Deploy pre-class e-Learning briefings to ensure that when trainees show up for the class, they have the prerequisite knowledge, are in tune with the goals of the course, and are motivated to begin. Therefore, classroom sessions can be better organized, more tightly focused, and more effective.
- Include multimedia presentations, demonstrations, and exercises in classroom sessions, thus getting double use from these expensive media assets.
- Use e-Learning collaboration mechanisms (discussion forums and instant messaging) to help learners stay in touch after classroom sessions and to help them apply what they learned. “A lot of technology,” sighs Charlotte.
“That’ll mean I have to deal with that officious, self-centered Brett Byteler.”
Attracting more customers
Charlotte has already convinced herself of the wisdom of using e-Learning as a loss-leader to attract customers to profitable classroom training. Now she jots down a few action items to begin implementing her plan.
- Focus on subjects of high priority to customers. Even free e-Learning still requires an investment of their time.
- Showcase strong instructional design. Make e-Learning a positive introduction to our company and a demonstration of our attentiveness to customers’ needs and our understanding of the subject matter.
- Make the courses concise and quick. Remember, the goal is not to tell learners all about the subject but to give them a tasty sample that piques their appetite for the full classroom course.
- Point to classroom training. In the e-Learning content, mention classroom courses. Include links to complete course descriptions and registration pages.
Freeing up critical resources
Charlotte knows that not all her courses are equally profitable. She also knows some are more popular than others, both with students and instructors. She can see ways to use e-Learning to free up classrooms, instructors, and calendar dates so she can teach more popular, profitable courses. Here’s her plan:
- Convert routine courses to learner-led or lightly facilitated e-Learning. Such courses seldom require highly experienced instructors anyway.
- Use conferencing technologies to Webcast conventional courses. This will free up classroom space because instructors can teach from their offices and students can take courses from their desks.
- Implement “when-you-want-it” training so that learners in 24 time zones can get training that fits their schedules — and neither instructors nor learners have to travel to get training.
“So, this is what they mean by ‘beneficent blending’,” Charlotte mused, “Looks like my old cash cow just had a new calf!”
E-Learning gets products to market quicker
Charlotte knows that speed is crucial to Pappion McQueen, VP of the Medical Equipment division. How many meetings has Charlotte sat through where McQueen has emphasized the importance of getting rapidly advancing products to market. The litany is familiar: Getting products to market sooner establishes leadership. It spotlights the company and its products. It lets these products sell over a longer period of time. And newly released products have advantages that garner a premium profit margin.
Charlotte is aware of this because she is often the scapegoat. The time required to train the global sales force is the longest bar on the critical path to product release on the chart that she has stuck on the wall of her office.
The value of time to market
Charlotte begins sketching her plan. From discussions with McQueen, Charlotte knows that the company’s medical equipment goes through three phases of sales. During the first phase, the products are unique and have no direct competition, so they yield high profits. According to McQueen, during this phase, medical products typically generate $500,000 per month in profits. The second phase begins when competitors introduce comparable products. Although the product is still a first-generation product it must be discounted to compete effectively. During this phase, it brings in $300,000 per month.
The third phase occurs about a year after the product is introduced as newer, next-generation products come onto the market, further increasing competition and reducing profit to a rate of $100,000 per month. This phase continues for about a year.
Currently, as McQueen is glad to point out, TaRA is almost never first to market, typically lagging behind its main competitor by two months. Thus, TaRA has no first-phase profit rush and can sell its products as current-generation for only 10 months. If TaRA could get to market three months sooner, it could add a month of first-phase profits ($500,000) and two months of second-phase profits ($300,000 each). Getting to market faster could boost profits $1.1 million per product.
How e-Learning saves time
Charlotte knows that e-Learning can save time. Cisco used e-Learning to cut eight weeks from the 12 weeks that used to be required to get manufacturing workers up to speed. And HP reduced the time required to train a global sales force from one year to just one month.
For TaRA, one of the biggest bottlenecks to product introduction is the time required to train its global sales force. From McQueen, Charlotte gathers the following specifics: Currently TaRA conducts such training by sending its sales training team on a tour of sales offices worldwide. The sales training team consists of the VP of sales, the product manager, and the head of development. For each sales office, the team must travel to the office and prepare the training room (one day), conduct formal training classes (two days), conduct followup meetings and coaching (one day), and return home (one day). Therefore, training each office requires one work-week per office. So, to conduct the training in all the company’s 15 sales offices requires 15 work-weeks. Charlotte fires up her spreadsheet and enters the numbers.
| With conventional training | ||
| Travel to the office | 1 | Day |
| Conduct training | 2 | Days |
| Follow-up meetings | 1 | Day |
| Return home | 1 | Day |
| = Time per office | 5 | Days |
| X Sales offices | 15 | Offices |
| = Total time required | 75 | Days |
| or | 15 | Weeks |
“I can do better than that,” thinks Charlotte to herself, a bit of her old confidence coming back. “We could prepare the sales force by having them spend a day reviewing marketing materials in a structured purposeful way. Then we could engage them in two days of Web-conducted briefings. We could hold the briefings using online-meeting software so presenters could share documents, draw pictures, and take questions from the learners. To make sure that sales reps are ready to begin selling, they could then spend a day taking online assessments and working in sales simulations. Then, for an additional 12 business days, we could follow up with scheduled online meetings between sales representatives and headquarters staff to answer questions and discuss special features of the new products.”
Charlotte quickly tallies her time allocations to see how much time e-Learning will take to train the sales force.
“So, instead of taking 15 work-weeks to conduct the training, we can do it in just 3.2 work-weeks. That saves 11.8 work weeks. Actually, the savings are even greater. Because of holidays and scheduling conflicts, the classroom training could not realistically be done in 15 contiguous weeks. The real savings will probably be closer to three and a half or four months.”
| With e-Learning | ||
| Pre-study of marketing materials | 1 | Day |
| Presentations and Q&A | 2 | Days |
| Testing and sales simulations | 1 | Day |
| Follow-up online discussions | 12 | Days |
| = Total time required | 16 | Days |
| or | 3.2 | weeks |
How to do “quick-time-to-market” training
Though inspired by the potential emerging from her calculations, Charlotte realizes that she must carefully design her e-Learning so that it can be completed quickly. She jots down some principles to guide her:
- Prioritize training subjects. Provide training on what’s most important to launch and begin selling the product. What’s important? Start with the key concepts, facts, and figures. Also include instructions on how to find answers in extensive online information available on the subject. Don’t teach what learners could look up on their own.
- Use existing materials. Gather materials from sales, advertising, product development, marketing, documentation, support, and other departments. Hire a speedy editor and a quick-draw artist. Spend time adding original assessments and feedback, not on duplicating materials already available in electronic form.
- License access to courses on general subjects. Adapt these courses to our specific purposes. Do not waste time redeveloping training that someone else has created, tested, and perfected.
- Use live speakers. Rather than laboriously develop multimedia interactions that will be used only once or twice, use conferencing technology to let learners interact with energizing, imaginative speakers and facilitators.
- Use instant messaging and discussion boards to make it easy for learners to get answers to their questions. Try to answer the most common questions in prepared training, but allow time for individual questions.
- Record presentations by authorities on the subject. Also, record all live presentations so those who could not attend (because the presentation was at 2 AM in their time zone) can play it at their convenience.
