Investing in the stock market can be a perilous activity. It also can be immensely rewarding. The same can be said of learning investments, particularly those initiated to prepare for an initial public offering (IPO). These investments in education might relate to change acceleration, transformative learning, as well as the right types of leadership development programs to build a new culture.
It’s a tall order, and financial, legal and HR all play an integral role in the cumulative process. The learning organization can be particularly helpful, however, in providing and facilitating the dissemination of information that critical members of the workforce need to properly assimilate procedural and policy changes in the post-IPO environment. Not only can learning ease the transition, but the CLO has to ensure the workforce has the knowledge it requires to perform to new expectations, rules and standards.
Learning for a Growth Company
Science Application International Corp. (SAIC) went public in October 2006, and Cheryl Getty, vice president and director of learning, built her learning perspective for the pre- and post-IPO workforce on the theme of the growing company. Specifically: What are the functional and leadership capabilities needed, and what strategies are required for a growing company?
“There has been some limited leadership development going on in the organization, so one of the first things I did was really look at what should be our leadership development strategy,” Getty said. “In 2006, we rolled out management and leadership training for first-line supervisors because they’re the direct point of contact with our employees and the high-tech organization, which deals with people management and some business-acumen skills.”
To develop this key population in its workforce, SAIC is piloting a multirater feedback and coaching program to help employees get very targeted feedback, which they can use to build customized development programs.
Getty said the learning organization also has been rolling out a new program management curriculum. Program managers run SAIC customer contracts, which makes them another critical group for the organization. Similar plans to enhance functional and leadership development capabilities are under way for the company’s systems engineering group, as well.
“We’ve been getting rave reviews on the leadership training and the program management training, and we’ve gotten strong support from the CEO, who has been personally watching their development and the rollout,” Getty said.
As with any learning initiative, changes likely to result from these types of growth-motivated programs should be tracked to ensure there is a measurable connection between strategic learning activity and the bottom line of the post-IPO company. With that in mind, SAIC has implemented an evaluation process using a combination of Kirkpatrick’s Level 1 and Level 2 evaluations, which Getty said help to evaluate true behavior change.
“For all of the programs that we’ve been rolling out, we have used our line management organization extensively to ensure that how they’re designed and rolled out is reflective of the needs in their business organization,” Getty said. “For example, when we looked at the leadership-training program, we had an advisory committee to help us determine what we wanted in the RFPs (requests for proposals) that we sent out to vendors and to help us select the vendors as well as look at the pilots of those programs. The next thing we’re going to start looking at is our upper-level managers, and certainly whatever our business strategy is in the post-IPO world will be discussed in those programs.”
Preparation and Communication are Key
Rebecca Ray, MasterCard Worldwide senior vice president of global learning and organizational development, said the path to being a publicly traded company is a long one, and it takes time.
“Becoming a public company is obviously more than just the initial public offering,” Ray said. “It’s a very long process, and MasterCard was making preparations for quite some time to move from an association to a privately held company and then to a publicly traded company.”
As part of that preparation, MasterCard created instructor-led and e-learning programs to provide necessary information about the bank card and global payment industries, as well as compliance, legal and regulatory parameters around conducting business in an ethical way, within the spirit and the letter of the law. There also was an initiative to help employees increase their financial literacy and understand the nature of a public company and how the stock markets work.
Ray said understanding MasterCard’s business models increased employees’ level of comfort in regard to the way the post-IPO company would be viewed and discussed.
Learning can be a key factor in facilitating that high level of comfort and understanding, which can be important in any organization undertaking an enterprisewide change. Moving from a private to a public company often comes with cultural and change management issues. Different requirements and processes have to be standardized.
David Forman, Human Capital Institute chief learning officer, said it’s important for employees to understand these requirements at the beginning and then help the people who will have to do things differently understand what that means. The CLO can be instrumental in providing employees with the support they need to converse internally and externally about the post-IPO organization.
“Somebody said, ‘It’s not the change that does you in — it’s the personal transitions that each of us have to go through in order to be successful in the new environment,’” Forman said. “Part of it is information, being able to supply information about what that next state looks like, what the processes and activities are that we’re going to have to go through and how people’s jobs will change or be different as a result of that, and then part of it is mentoring and coaching.
“It’s something that can’t be totally handled in a training class or a training environment, but it’s more helping people through the transitions on the job.”
Learning has an enormous part to play in facilitating change awareness, and preparing employees for the transition from pre- to post-IPO environment is key, said Richard Sear, director of the corporate training and development consulting practice at Frost & Sullivan.
“The assumption that an employee of any organization, no matter what industry, would understand what it means to have an IPO would be a scary proposition because, at most levels of business, people don’t understand what that involves — disclosure, corporate governance, the vulnerability that now you could be taken over, an increasing level of accounting scrutiny,” Sear said. “And for the people who might be aware of it, there might be a level of concern, especially about the likelihood that a takeover will take place.
“If you’re not confidently and accurately establishing a clear progression process, which includes a learning track for each level of your organization, you are more likely to be susceptible to discontent from the people who are working for you.”
Sear also said it can be critical for outside investors to see that a newly public company has an effective learning process for each employee level. Comparisons between pre- and post-IPO learning efforts might factor into potential investment decisions because learning has a direct correlation among performance, sales, customer relations and many other factors that directly affect an organization’s bottom line.
“In a pre-IPO world, learning is perhaps a little less stringent,” Sear said. “There’s more of a tie-back to the dollar because most pre-IPO companies are a little less wealthy than most post-IPO companies. Not in all instances, but certainly the key initiatives are there because maybe you have different issues with budget and tying it back to preparing employees for the transition.
“Illustrating the effectiveness of the decisions that they make is critical for the CLO, as is the whole notion of introducing ROI into the process. The C-level person must report on the effectives of the training that they’re doing. In a post-IPO world, that becomes even more important because of the scrutiny over the finances. Then, train to your strengths. If they’re not training to their strengths, they might be wasting an awful lot of cash and in an IPO, there is no frivolous spending.”
Create Targeted Learning
Once the CLO has prepared learning to ease the workforce into change, it’s a good idea to create targeted learning programs to address specific challenges that might arise during and after the IPO shift has taken place.
MasterCard implemented several programs that Ray said were extremely beneficial in the pre- and post-IPO environment. In Celemi’s “Apples and Oranges” program, a combination of instructor-led learning and gaming simulations, participants learn about the business outcomes their decisions create in a fictional company. Once the generic simulation has been completed, they focus on particular MasterCard financials.
“We have several finance folks who were subject-matter experts here at MasterCard who were willing to become certified facilitators for those sessions,” Ray said. “That’s a model that is very effective, as they bring a great deal to those sessions. Obviously, it’s their area of expertise, and they help make a very rich experience for our employees. We also created programs that would help our people understand not only the nature of the new company but the strategy behind it, and also how they would execute against that strategy and remain competitive in the marketplace.”
One program saw MasterCard partner with IMD, a business school headquartered in Switzerland, to create an executive leadership forum for the company’s top 200 leaders that would help them understand how leading in a post-IPO environment would be different. In addition, all employees participated in the “RoadMap to the Future” program, which featured three custom learning maps and structured interactive sessions led by table coaches from MasterCard’s various business units. The maps were built by MasterCard executives, subject-matter experts and the Ohio-based company Root Learning.
Since the program’s initial launch, every employee has received an 11-inch-by-17-inch version of two of those learning maps (finance and MasterCard’s strategy implementation), laminated back to back. Every quarter, employees have an opportunity to listen to presentations about the quarterly results from senior leaders. They also have the opportunity to track and monitor the company’s progress and results using the map. This continues the learning and makes it possible for people to access and gauge company metrics.
Ray said “RoadMap to the Future” was the single greatest learning event at MasterCard, and it served a dual purpose. First, it provided important facts necessary to inform and prepare the workforce for the post-IPO environment and the changes therein. Second, it created a marked sense of engagement and increased interest in this type of training.
“They asked for not only more training like this, they asked for a deeper dive on a variety of things,” Ray said. “For example, they said they would love to have more of an understanding of all aspects of our business. They want to be able to say, ‘I understand more about debit,’ or ‘I understand more about our credit products,’ or ‘I now know more about what a particular business unit does,’ and in response to that, we’ve launched a series of programs called ‘Passport to Knowledge,’ a 60- or 90-minute presentation on a product or service, the history of MasterCard or an overview of the different business units.”
Ray said that in 2007, her team will launch more bite-sized learning via the “Passport to Knowledge” program that will fulfill the requests for more knowledge about various aspects of the business.
“They’re helping us to shape the learning offerings,” Ray explained. “We’ve got such incredible human capital, and it’s so important for our employees to be able to tap into that. So, whether those are live or archived for later viewing, people around the world have an opportunity to learn when they want to learn or when they can find a few minutes to learn. We’re working to build an entire knowledge repository that they can access on demand.”
– Kellye Whitney, email@example.com