Corporations are victims of the great training robbery.
American companies spend enormous amounts of money on employee training and
education—$160 billion in the United States and close to $356 billion globally
in 2015 alone—but they are not getting a good return on their investment. For
the most part, the learning doesn’t lead to better organizational performance,
because people soon revert to their old ways of doing things.
Consider the micro-electronic products division (MEPD) at a
company we’ll call SMA, which one of us studied. SMA invested in a training
program to improve leadership and organizational effectiveness. MEPD was one of
the first business units to implement it, and virtually every salaried employee
in the division attended.
Participants described the program as very powerful. For a
whole week they engaged in numerous tasks that required teamwork, and they
received real-time feedback on both individual and group behavior. The program
ended with a plan for taking the learning back into the organization. Pre- and
post-training surveys suggested that participants’ attitudes had changed.
A couple of years later, when a new general manager came in
to lead the division, he requested an assessment of the costly program. As it
turned out, managers thought little had changed as a result of the training,
even though it had been inspiring at the time. They found it impossible to
apply what they had learned about teamwork and collaboration, because of a
number of managerial and organizational barriers: a lack of strategic clarity,
the previous GM’s top-down style, a politically charged environment, and
cross-functional conflict. “[The previous GM] had a significant impact on our
organization, with all of us reflecting him in our managerial style,” a member
of the division’s senior team explained during an interview. “We are all more
authoritarian than before.”
As a change strategy, training clearly had not worked. It
rarely does, as we have found in our research and teaching and in the advising
we’ve done at dozens of companies. One manufacturer, for instance, suffered
multiple fatalities at its operating plants despite a $20 million investment in
a state-of-the-art center for safety training. Participants in corporate
education programs often tell us that the context in which they work makes it
difficult for them to put what they’re taught into practice.
Still, senior executives and their HR teams continue to pour
money into training, year after year, in an effort to trigger organizational
change. But what they actually need is a new way of thinking about learning and
development. Context sets the stage for success or failure, so it’s important
to attend to organizational design and managerial processes first and then
support them with individual development tools such as coaching and classroom
or online education.
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