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The Business of Learning:15 Steps for Running Learning Like a BusinessPresented by:

Dave VanceFormer President of Caterpillar University

Kevin OakesCEO, i4cp

October 26, 2010

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What Does i4cp Do?

We help organizations leverage the core areas of high performance through 4 delivery vehicles:

1. Research2. Peers3. Tools4. Technology

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The 5 Domains of High-Performance OrganizationsAnd i4cp’s Centers of Knowledge That Support Them

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High-performance organizations consistently outperform most of their competitors for extended periods of time.These companies performed better over the past five years, based on these four indicators:

1. Revenue growth2. Market share3. Profitability4. Customer satisfaction

Defining High Performance

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3MAdobe SystemsAlliance OneAllstateAmerican Mgt. Assoc.AmeripriseAmwayApollo GroupAPSBooz Allen Boston ScientificCamecoCatholic HealthCitiGroupConAgra FoodsConnectiCareDarden RestaurantsDeloitte & ToucheDepository Trustdrugstore.comDuke EnergyDuke UniversityEdwards Lifesciences

Eli Lilly & CoExxonMobilFedEx ExpressFedEx GroundFederal ReserveFidelity InvestmentsFlextronicsGAP, Inc.General ElectricGeneral MillsHome Shopping NetworkING AmericasIntelJack in the boxKFCKraftLG ElectronicsLockheed MartinMcDonald’s CorpMetLifeMicrosoftMITRENorthrop Grumman

Olive GardenPelcoPETCOPfizerPizza HutPNC Financial ServicesPrudential FinancialQualcommRaytheonRio Tinto GroupSamsungSaskTelShell OilStarbucksTakeda PharmaceuticalsTampa Electric CompanyT-MobileToyota Motor SalesUnited States NavyU.S. OPMUnited WaterThe YYUM! Brands

Members (partial list)

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Kevin OakesCEOi4cp

About Kevin Oakes

Background Founder, CEO of i4cp Chairman, Jambok Former Chairman, ASTD Board Founder, President, SumTotal Systems Former CEO, Chair of Click2learn Founder, CEO Oakes Interactive

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About Dave Vance

Background Former President of Caterpillar

University, which he founded in 2001. Dave was responsible for ensuring that

the right education, training, and leadership were provided to achieve corporate goals and efficiently meet the learning needs of Caterpillar and dealer employees.

He is a member and former director and treasurer of ASTD

Dave VancePresident

Manage Learning, LLC

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All corporate members will receive a PDF copy of today’s presentation.

A link to a recording of today’s webinar will be available on the i4cp site.

If you have any questions, please type them into the Q&A box. We will do our best to address them as we go along or at the end of the session.

Webinar Logistics

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1. Appreciate that learning is a business2. Resolve to run it like a business

Implies that Learning should produce results Must be planned carefully And executed with discipline Also, that numbers will be involved!

Steps 1 and 2

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3. Adopt a strategic focus4. Create a board of governors5. Create vision and mission statements6. Create a multi-year plan to achieve your vision

This will be your journey Manage expectations Communicate

Steps 3-6

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The Business of Learning

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7. Ensure that your organizational structure will support a strategic focus Centralized or hybrid

8. Adopt a workable funding model Often will be a combination of corporate, allocation and

discretionary (charge back)

Steps 7 and 8

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Single most important action for an L&D leader Start with the business and strategic plan Meet with the CEO, senior leaders, key stakeholders

Understand company goals and challenges Learn the priorities These are business discussions

Step 9: Strategically Align Learning to your Organization’s Goals

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Perform a “macro” level needs analysis to determine if learning has a role to play in achieving these goals

Make a preliminary determination of recommended learning programs and their alignment to the prioritized company goals

Step 9: Strategically Align Learning to your Organization’s Goals (cont.)

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Courses to Number of Support Goal Unique Sponsor

Strategic Goal Metric Learning Program New Existing Participants VP Division#1 Increase Sales 10% Consultative selling skills for ee's 1 0 100 Ortega Sales

Product program for employees 3 2 100

#2 Reduce Defects 20% Design course for engineers 5 2 200 D'Agoto Quality

#3 Reduce Injuries 25% Safety courses for mfg ee's 5 5 2,500 Swilthe MfgSafety courses for mgt ee's 2 1 600

#4 Improve Leadership +5 pts Leadership for supervisors 1 0 180 Wang Strategy

#5 Increase Retention +5 pts Individual development plans 5,000 Driese HRPerformance mgt course for ee's 10 20 2,500

==== ==== ======Top Five Goals 27 30 5,000

Strategic Alignment of Learning

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The business case brings together the expected impact (and perhaps benefits) of the recommended learning and the costs Impact: Increase in sales, reduction in injuries, or an increase in

productivity (often these can be dollarized) Cost: Budget costs (design, development, delivery,

reinforcement) and opportunity cost Net benefit or ROI (if appropriate)

Step 10: Build the Business Case for Learning

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Expected Unique Total Gross BudgetOpportunityTotal Net2011 Impact of Partici Partici Benefits Costs Costs Benefit

Priority Corporate Goal Target Learning pants pants (thous.) (thous.) (thous.) (thous.)1 Increase Sales 10% 5% 100 1,100 $1,500 $490 $117 $8932 Reduce Defects 20% 14% 200 800 $2,100 $570 $512 $1,0183 Reduce Injuries 25% 15% 3,100 13,600 $1,200 $410 $376 $4154 Improve Leadership +5 pts +2 pts 180 180 $1,200 $582 $302 $3165 Increase Retention +5 pts +1.5 pts 5,000 7,500 $1,800 $340 $1,150 $310

Subtotal Top Five Prioities 5,000 23,180 $7,800 $2,392 $2,457 $2,952

Subtotal Other Goals 1,950 4,725 $3,050 $1,245 $778 $1,028Total All Goals 5,000 27,905 $10,850 $3,637 $3,234 $3,980

Unaligned Learning 4,000 4,000 $700 $300 $400 $0Other Costs (not included elsewhere) NA $600 $0 -$600

====== ====== ====== ====== ====== ======Grand Total for All Learning 5,000 31,905 $11,550 $4,537 $3,634 $3,380

2011 Summary Business Case

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Ideally, a written document with the following chapters: Executive Summary Last Year’s Accomplishments Strategic Alignment Business Case for Learning Learning Resources, Expenditures, Budget Detailed Work Plans Evaluation Strategy

Step 11: Create the Business Plan for Learning

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Created with input from CEO, governing bodies, stakeholders, learning professionals

Approved by CEO and governing body This is your plan for the year Very scalable: An L&D function with just one person can

still do this With all the information gathered and tables created, a simple

one can be done in 8-12 hours

Step 11: Create the Business Plan for Learning (continued)

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Create scorecards to measure progress against goals Use high-level, program and detailed scorecards

Calendar at least one staff meeting per month dedicated to a review of your progress Ideally, the same day each month like the second Tuesday from

8-10 am Share progress at least quarterly with the board of

governors and/or CEO

Step 12: Plan for Monthly, Disciplined Execution of the Plan

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Start with the basics and add as you go Sample strategy:

Level 0: number of participants, courses, completion dates, costs All courses

Level 1: reaction All courses, not necessarily all participants

Level 2: learning Where appropriate. All compliance courses

Step 13: Adopt an Evaluation Strategy that Ensures Planned Impact is Achieved and Provides for Continuous Improvement

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Sample strategy (continued): Level 3: application

Select courses Level 4: impact

A few key courses Level 5: ROI or Net Benefit

A few key courses

Purpose: Ensure results and improve

Step 13: Adopt and Evaluation Strategy that Ensures Planned Impact is Achieved and Provides for Continuous Improvement

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14. Use business and economic concepts to make better decisions Like opportunity cost and marginal analysis

15. Benchmark with others. Learn. Improve

Remember, it is a multiyear journey. The goal is continuous improvement.

Steps 14 and 15

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The Business of Learning: How to Manage Corporate Training to Improve Your Bottom Line by Dave Vance

A 36-page Sample Business Plan for Learning (pdf, word, and excel files) available at poudrerivergroup.com

Book is also available at Amazon.com

Resources

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The i4cp 2011 Annual ConferenceNext Practices of High-Performance Organizations

Speakers include:John Coné former CLO of DellDr. John Sullivan ProfessorStephen M.R. Covey Thought leaderMarshall Goldsmith AuthorBill Price former VP of Amazon.comDottie Brienza SVP of HiltonKevin Wilde CLO of General MillsAntoinette Handler VP of Lockheed MartinMarilyn Figlar CLO of MetlifePaul Humphries VP of HR, Flextronics

Members Only – Vendors and consultants aren’t permitted.

For more information, visit http://www.i4cp.com/conference

March 15 – 18, 2011 | InterContinental Montelucia | Scottsdale, AZ

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Upcoming Events & ProgramsRegister online at http://www.i4cp.com/company/events/Webinar : Accelerating Employee Productivity Through OnboardingPresented by Claire St. Louis, Vice President of Human Resources, United WaterOctober 28, 2010, 1:00pm – 2:00pm ESTOnline - complimentary

Webinar Hosted by HRPS - Leadership Agility in High-Performance OrganizationsPresented by i4cp's Kevin Oakes, CEO and Jay Jamrog, SVP of ResearchNovember 2, 2010, 11:00am - 12:30pm EDTOnline

Webinar : Global Leadership Development: Best Practices and Top StrategiesPresented by Sandra Edwards, SVP of Corporate Learning Solutions, AMA; Maria Van Parys, Director of Leadership Education & TM, Boston Scientific and Mark Vickers, VP of Research, i4cpNovember 3, 2010, 12:00pm – 1:00pm EDTOnline – complimentary

Webinar : Applying the Lessons of Best ServicePresented by Bill Price, former Global VP of Customer Support, Amazon.comNovember 18, 2010, 1:00pm – 2:00pm ESTOnline - complimentary

Webinar : John Coné – A History of FailurePresented by John Coné, Principle, 11th Hour GroupDecember 9, 2010, 1:00pm – 2:00pm ESTOnline - complimentary

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