People
development in hard times
Economic doom and gloom in the
media day by day, with reports of rising unemployment,
falling profits…. the next thing to expect
is slashed learning and development budgets, thereby
precipitating our own doom andgloom…..or does
it? Do learning and development professionals simply
have to sit back and accept their fate and that of
their cherished programmes or are there some other
options, or even, dare one ask, silver linings?
Perhaps economic down turns can be seen
like forest fires – they can wreak huge havoc
and destruction for the flora and fauna but they can
also be essential for regeneration, burning away accumulated
material and allowing new growth to come through. This
can be illustrated in the following case study.
The
early noughties were a difficult time economically
for the large professional services firms. New regulation,
Sarbanes-Oxley, was introduced as a result of the collapse
of Enron and Andersen which in turn, introduced considerable
turmoil into the market. It was impossible to know
how clients would respond to the new legislation and
in the case of the tax practice at PricewaterhouseCoopers,
clients responded more conservatively than was anticipated
and the firm was exposed to difficult competitive pressures.
The response of the Global Chairman at the time, Sam
di Piazza was to indicate that internally, the focus
should be on preserving the brand and developing people,
a broad strategy in the face of uncertainty.
The leadership
of the tax practice and HR responded in a variety of
ways. Predictably, some training budgets were cut.
The HR Director proposed cutting one particular budget
by 75% as an opening gambit, only to discover that
there was very little opposition to this, the reason
which emerged being
that there appeared to be staff attending the same
course a number of times as they were held in exotic
locations! Other programmes with large residential
elements were also scrutinised and redesigned to reduce
costs. However, it also resulted in some innovatory
programmes being designed. One particular group of
managers were targeted who were seen to be key to the
business at this time as they managed large teams,
developed business
and had important relationships with clients and generally
acted as the glue in the business. Potentially they
held the key to helping to maintain morale at this
difficult time. This grade of managers was either a
career grade where managers could plateau or a promotion
grade on the way to becoming Directors and partners.
What had been provided for these managers were assessment
style development centres which were expensive because
of a large residential element, tutor time and placed
demands on partners’ time
as assessors. Many of the managers who attended these
gained very little benefit as they did not see themselves
continuing to move up the career ladder and the development
centres did not increase their commitment to ongoing
development. They experienced these events as something
of an ordeal and were only too happy to put a tick
in a box at the end and go back to work and forget
about developing themselves. A new leadership development
programme was designed in its place which was both
cheaper and met the needs of this group of managers
more closely. Strangely enough, the main argument when
the new programme was presented to the leadership team
was that it was too cheap! It was an action learning
programme and costs could be cut as participants were
given the tools to assess their own development needs,
there was little need for residential time away and
the tutor element was also reduced. The programme set
out the expectation that participants could use this
for promotion if they wanted to, but for those who
did not, it was made clear that there was an expectation
that they should continue to develop in role.
The programme
was a great success and continued for some years including
when the upturn came and also rolled out in other parts
of the business. When it was evaluated, there were
comments such as ‘Now
I am able to believe that PwC means what it says about
being employer of choice’, the result of investment
in learning and development in lean times. Investment
of this kind is also investment in employer brand and
might have been one of the factors which contributed
the following year to PwC being rated the number one
choice for graduates. Having established innovation
as the way forward at this time, the next programme
to be developed was a leadership development programme
for high potentials where there was another very real
business imperative. At this time there were a large
number of targeted voluntary redundancies as well as
no salary increases as a way of containing costs. The
very real danger of this was losing the best or the
talent and the Young Leadership Programme was developed
as a retention tool. All too often, as young managers
announced their departure, they were told, ‘But
you are one of our stars!’ the reply being, ’No
one ever told me!’ Being invited on to this programme
was a way of clearly valuing this talent. Again, this
programme was a great success and the predecessor of
the current high potentials leadership development
programme. In another part of the business, a halving
of the budget required a similarly completely different
approach. It was simply not possible to continue provision
of the same programmes so the development manager had
to consult with partners and the leadership of the
business about what the business really needed at that
time, thereby creating a much greater focus and also
ownership of development within the business. So what
are some of the lessons to come out of this experience
and that of others in this situation?
- As with forest
fires, there may be areas of training provision which
need to be pruned or cut back, for example, looking
to see if programmes can be provided with a smaller
residential element. This is often where people go
to first and it is a perfectly legitimate way of
using resources more effectively, though it is also
often the simplest thing to do.
- However, an economic down turn presents
real opportunities to take a deeper look at what
is going on. Slow cutbacks often only result in
salami slicing – much
harder times require a much more radical approach.
This is a good time to have another look at what the
business really requires at this particular time – taking
time to look outwards. Development programmes which
have been designed for times of growth may well
not be appropriate when the business is down-sizing.
- It is natural to feel fear and
anxiety at times like this – indeed, our own
job might be at risk! However, fear should not be
allowed to paralyse. This is a time which tests us
all personally – how
good do we really think we are? One of the great
secrets of success and security is knowing how
employable and credible we are, but that is also
not something built up in a hurry in a crisis.
How have we invested in our own development? Knowing
that we are employable enables us to stick our
heads above the parapet and take risks.
- Fear and pain can act as a catalyst.
It is very easy to carry on running the same programmes
year in, year out in times of success, but hard
times can make us ask some hard questions which
may be simply at the level of how we can cut costs,
the salami slicing, or we can go much deeper and
ask some fundamental questions about the state
of development in the organisation and the philosophy
that underpins it. This is a good time to ask ‘Who
are we? What do we stand for? What is core? and
to focus on meaning and purpose.
- PwC’s
approach to its staff was characterised by caring
and paternalism as a means of recruiting and retaining
staff, but when it is necessary to make people
redundant, this makes people question the psychological
contract and what they are entitled to expect from
the organisation. In some areas, there was an expectation
on the part of staff when it came to development
that there would be a tap on the shoulder when
it was the right time to attend particular programmes
with the result that people did not really take
responsibility for their own development. Getting
people to assess their own development needs was
a way of signalling that a different approach was
being taken. This may not necessarily cut costs,
but it does ensure that development is targeted
more effectively.
- What went hand in hand
with this was a move to valuing learning from experience,
rather than the expectation that development only
happens on programmes. Both leadership development
programmes which were developed at this time had
action learning as core elements. These included
both reflection and discussion of current work
issues as the basis for learning, as well as project
based learning as a way of accelerating the learning
of high potentials. Far more can be done within
organisations to tap the potential of learning
from experience and how to maximise that than is
being done currently. Some forms of development,
eg learning from experience are cheaper!
- Courage and leadership are all important,
especially on the part of development professionals.
We can choose how to approach hard times, what
to sell to the business, what to recommend is cut
back.When HR at PwC was put under the microscope
to look at its costs, it was the HR function which
led its own review and extracted costs itself,
with the dual focus of effectiveness and efficiency.
Taking the lead takes courage, but also puts back
some of the control which is lost when simply passively
waiting for the axe to fall. It is possible to
ask the question, ‘What if I controlled
my own destiny? What would I do then?’
• This is not a time for new three year plans
for what L&D are going to deliver. It is a time
to do and then assess impact – pause, stand
back and decide what to do next, a much more opportunistic
way of operating. Sometimes one has to do the counter-intuitive,
for example, accelerating into a skid, investing,
not cutting back.
• This is also important with one eye on the
upturn. What can often go with a return to the
core is a cutting back too deep or losing diversity.
Lessons from evolution would suggest that diversity
is exactly what is needed when environmental conditions
change and the organization needs to adapt in different
ways. Responding to hard times in development can
take place at different levels.
What seems to happen most often is that programmes
and budgets are simply slashed and put back when things
get better. That is probably the easiest way of responding.
At the next level, it is possible to take a hard look
at what the business requirements are and how development
programmes can be redesigned or even new programmes
put in place which better enable the business to be
successful in hard times.
The next level may be about
questioning the ethos and philosophy of development.
What are the attitudes that staff should have toward
their own development and how can a moment of crisis
help to bring about changes in this if that is what
is required? What is the psychological contract the
business has with staff with respect to development
opportunities? At an even deeper level, it is about
returning to the core, what is integral, what the business
is really about and what really matters, holding to
those which also may be about preserving brand value
and ensuring that programmes continue which uphold
that or putting in place new ones. That does demand
a longer term focus on sustainability which is hard
to maintain and which needs courage and leadership,
but will also best position the business for the upturn
as is illustrated by the case study.
Author: Hilary Rowland, Training Journal October,
2008
|
|
Back to Newsletter |
