Before looking at how to do that, let’s understand, in the best sense of these phrases, what we’re really talking about. For many casual observers, and especially for the normal share of skeptics, human capital development and management are just fancy new words for training. The same crowd would have you believe that e-learning is simply putting courses on the Web. But smart companies know that these concepts are really about something much more sophisticated and that, in fact, the two are intimately related. Indeed, forging an appropriate relationship between them is what’s yielding strategic benefits for leading-edge companies across multiple industries. To understand how and why, we need to drill deeper.
First, let’s look at human capital development and management. Why is this more than training, and how is it fundamentally strategic? Think about what strategy has become in the past 20 years. Peter Drucker and various disciples have shown us that, in the commoditizing global economy, the only distinctive differentiator is human knowledge and innovation. Gary Hamel, C.K. Prahalad and others similarly argued that strategy is no longer a war of “structural position” but rather “competing on organizational competences” and continuous learning. More recently, Larry Bossidy, Ram Charan and Jim Collins have taken things even a step further, emphasizing that strategy is ultimately embedded in the processes, people and executional capabilities of a company. Though there are notable differences among all of these management gurus, one overwhelming theme is clear across their thinking and increasingly across the thinking of many others too—that a company’s skills, knowledge and people, and how they are managed, developed and deployed, is the heart of value creation. Said more simply, strategy is now organization, and organization is people.
Companies pacing their markets are acting on these principles every day. They clearly see the link between business results and people processes, and they have aligned their organizations—and thus their strategy—around a fundamental cycle of human capital development and management. They begin with goals for the business and drive those down to specific performance objectives. They track and manage that performance throughout their organizations, at every step assessing capabilities needed to succeed on the one hand and on the other, assessing the gaps between what’s needed and what they have. They then address those gaps by recruiting talent, developing it and deploying it. They analyze progress and problems constantly, and year in and year out they pursue continuous improvement, upgrading the quality and performance of their people and expanding the capacity of their leadership. In this way of working, strategy is not designed but rather emerges from the capabilities they build, from the market lessons they learn, from the insights they gain.
E-learning has a place in this system, but not simply as “courses on the Web.” Yes, e-learning sometimes plays a role of being a form of instructional delivery, but it is inevitably so much more. In a world moving ever more quickly and changing ever more rapidly, the processes, information and follow-up of the human development and management cycle must be dynamic and integrated. Internet-enabled programs, tools and infrastructure provide just that. Thus, e-learning will include not only Internet-published courseware, but also the tools for managing, modularizing and handling the following:
- Different kinds of content and learning objects (including both electronic and non-electronic forms, and even traditional classroom instruction).
- Just-in-time and asynchronous learning, such as virtual labs, virtual classrooms and collaborative work spaces.
- Simulations, document repositories and publishing programs.
- Tools for prescribing learning, managing development pathways and goals and handling e-commerce and financial transactions related to learning.
- The utilities and capabilities for supporting informal learning, mentoring, communities of practice and other “non-training” interventions.
Most important, it will include a standards-based infrastructure for tying all such things together and providing a common platform and flexible set of processes to support and integrate learning in the overall human capital development and management cycle. If human capital development and management is an overall framework for leveraging people for business results, e-learning is an operational mechanism that fundamentally enables it.
To add to the challenge, this framework increasingly embraces not just a company, but the whole value chain or extended enterprise of suppliers, distributors, channels, partners and others on which every company now depends. As corporations focus on core competencies, outsource more work to others and adopt flexible working relationships across supply chains and distribution channels that start to resemble “webs,” achieving successful results is not just a matter of the company’s employees, but also managing and developing the human capital of others working in the extended enterprise. Thanks to the Internet, these boundaries are easier and easier to bridge, and thanks to e-learning, it is easier and easier to build skills, assess competence and readiness and generally align human knowledge and experience for end-to-end creation and delivery of more competitive products and services. Even customers are now part of the process, and as more companies use learning programs to deepen relationships, cut service costs, drive revenue and even help co-create products with their customers, e-learning is helping to extend human capital development and management to that final stop in the value chain.
As always, the best way to understand the evolving practice of human capital development and management and the role of e-learning is through some case examples. Consider, for example, Kinko’s, the world’s leading supplier of document solutions and business services with 1,100 locations in nine countries. Like many distributed retailers, Kinko’s depends on a widely dispersed workforce to roll out new products and services and grow its revenue. It must wrestle with issues of staff turnover, costly training programs and bottlenecks in getting new offerings to market. Kinko’s recently embarked on an e-learning strategy grounded in the overall philosophy of human capital development and management.
Kinko’s didn’t just create Web-based training programs, but rather adopted a blended approach, combining Internet instruction with decentralized instruction, job aids, mentoring and virtual classroom training, delivered and tracked on an enterprise-wide learning management platform. Though cost savings and greater efficiency were benefits of the approach, learning programs were specifically aligned with key business drivers aimed at growing the top line: increasing staff capability and reducing time to competence (and thus to revenue), increasing speed to market and increasing effectiveness in compliance and certification (which has been essential for winning certain large corporate contracts). Moreover, Kinko’s designed and rolled out the learning programs with an eye toward the overall human capital development and management cycle—assessment, gap analysis, performance management and ongoing improvement. As Kinko’s has been working through the phases of the strategic development, it has been guided by a holistic approach to building and managing people for increased retention, faster time to competency and ultimately, more revenue per store. Kinko’s is also investigating opportunities to extend its learning programs to customers and suppliers.
The extended-enterprise dimension of e-learning and human capital management has been ambitiously embraced by another pioneering company, the Masimo Corp. Masimo develops, licenses and markets advanced medical signal processing technologies for monitoring patient vital signs. Because of its sophisticated and ever-advancing products, Masimo has a constant challenge to keep its sales force and OEM distribution partners knowledgeable and competent on the latest features, functions and applications of its monitoring devices.
By instituting e-learning, Masimo has been able to provide revenue-enhancing programs that deliver faster time-to-market and the deeper capability critical to ensure adoption of its technology by clinicians. At the same time, Masimo realized that there would be additional benefits to training clinical staff themselves, increasing both brand awareness and product competence among hospital staff and also building communities of users who would drive future sales.
Because strict federal regulations required that training be tracked and documented, and the long hours worked by clinical staff made traditional training infeasible, Masimo established an e-enabled university that both delivered learning over the Internet and through its e-learning infrastructure and provided the tracking and analysis of competence critical for regulatory compliance.
Taken together, Masimo’s programs and approach were not just about training as an afterthought, as is so often the case, but rather represented a planned, strategic and integrated approach to managing and developing the entire value chain of human capital on whose skills and capabilities the success of its technology depended. Though Masimo’s e-learning programs are lower cost than traditional training, the real value has come with the alignment and management of the complex value chain of people linking ideas and innovations in the lab all the way to the monitoring of health at a patient’s bedside and driving business results through that successful orchestration across hundreds of hospitals.
Strategic human capital development and management often focuses on organizational leadership, and the French telecom equipment manufacturer Alcatel provides a third example in which e-learning has strongly supported such a strategy. Unlike many leadership development programs, which are disconnected from real business needs, the program recently created at Alcatel was clearly aligned with the strategic imperatives of the corporation. As a result of several acquisitions and some historically unclear criteria, leadership development had become fragmented and fallen out of step with what Alcatel required to reach its growth aspirations.
In 1997, the CEO mandated an enterprise-wide performance organization and reviewed the process system. Within that framework, the company initiated a new, more integrated leadership development program aimed at fulfilling specific requirements for Alcatel’s business success. The breakthrough idea included the segmentation of potential leaders at Alcatel based on four different “cohorts” whose members shared common competencies and needs: current leaders, “fast trackers,” “threshold leaders” and those with other critical skills for long-term value to the company. Each cohort was then developed and tracked according to a different program, focusing on the needs of the individual as well as the needs and stage of maturity across the cohort. The analysis also identified certain key competencies missing in various cohorts and helped establish benchmarks for levels of competence based on averages across the groupings.
The development approaches included all the expected interventions, including rotation, mentoring and training, and also a certain amount of Internet-delivered instruction. But the e-learning differentiating component that underpinned the entire strategy was the infrastructure that provided the assessments, tracking, analysis and ongoing management of leadership profiles. Alcatel’s approach to e-learning was as holistic and integrated as its human capital development and management. The real value was not this or that training program, but a planned, consistent and monitored process of continuous improvement over time.
Looking ahead, unless the knowledge revolution is just a chimera, we should believe that all organizations will become more and more integrated in their approach to human capital management, and enterprise and cross-enterprise development and alignment of people for strategic value will become a norm that’s simply accepted as basic business practice. Similarly, we should imagine that the “e” in e-learning would disappear, as the powerful and ever-accelerating functionality of Internet-enabled support solutions disappear into the normal way of working. And even learning itself will become more transparent as companies realize that the boundaries between work, education, practice and human development are blurring in step with the speeding global economy. It is a convergence to be embraced, not feared. Looking around, however, the change is only now beginning. It’s time to graduate beyond the fights about jargon and get on with the revolution.
Brook Manville is chief learning officer of Saba, the Redwood Shores, California-based provider of human capital development and management solutions. Brook consults and writes frequently on organizational learning and development, technology and strategy. Contact him at email@example.com.