Newbies to New Leaders

Transcription

1 Newbies to New Leaders Closing Critical Skill Gaps with Learning October 2013 Mollie Lombardi, Zach Lahey

2 Page 2 Executive Summary Learning is critical to enabling business strategy, from onboarding new hires, to developing future leaders, to educating channel partners and customers. This study, based on responses collected from 185 organizations between July and September 2013, looks at how organizations connect learning to business priorities, create development programs that impact every stage of the employee lifecycle, and utilize technology to support learning initiatives. It also examines the business impact of building learning capability and running effective learning programs. Best-in-Class Performance Aberdeen used the following three key performance criteria to distinguish Best-in-Class companies: 83% of employees received performance ratings of exceeds performance expectations 78% of key roles have one or more ready and willing successor 13% year-over-year improvement in revenue per full-time equivalent (FTE) Research Benchmark Aberdeen s Research Benchmarks provide an in-depth and comprehensive look into process, procedure, methodologies, and technologies with best practice identification and actionable recommendations. Competitive Maturity Assessment Survey results show that the firms enjoying Best-in-Class performance shared several common characteristics, including: Providing consistent learning and development opportunities throughout the employee lifecycle Ensuring that learning efforts are closely tied to business strategy and measured by business outcomes Involving organizational leadership in both developing and executing learning strategy Required Actions In addition to the specific recommendations in Chapter Three of this report, to achieve Best-in-Class performance, companies must: Work with the business to establish a consistent set of characteristics, skills, and competencies that are required to support strategy execution, and use them as a framework by which to assess, develop, and manage talent Adopt learning technologies that allow the organization to be flexible on when, where, and how people learn Focus on building internal organizational capability to bring new hires up to speed quickly, and develop the next generation of leaders from within to maintain competitive advantage This document 2013 Aberdeen is the result Group. of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for Telephone: objective fact-based research 5200 and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted Fax: 617 by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.

3 Page 3 Table of Contents Executive Summary... 2 Best-in-Class Performance... 2 Competitive Maturity Assessment... 2 Required Actions... 2 Chapter One: Benchmarking the Best-in-Class... 4 Business Context... 4 The Maturity Class Framework... 5 The Best-in-Class PACE Model... 6 Best-in-Class Strategies... 7 Chapter Two: Benchmarking Requirements for Success Capabilities and Enablers Chapter Three: Required Actions Laggard Steps to Success Industry Average Steps to Success Best-in-Class Steps to Success Appendix A: Research Methodology Appendix B: Related Aberdeen Research Figures Figure 1: Pressures Driving Learning Activities... 4 Figure 2: Learning Strategies in Place... 8 Figure 3: The Impact of Best-in-Class Learning... 9 Figure 4: Groups with Dedicated Learning Programs Figure 5: A Consistent Competency Model Pays Off Figure 6: Recent College Graduates Need a Little TLC Tables Table 1: Top Performers Earn Best-in-Class Status... 6 Table 2: The Best-in-Class PACE Framework... 6 Table 3: The Competitive Framework Table 4: Learning Methods and Effectiveness Table 5: The PACE Framework Key Table 6: The Competitive Framework Key Table 7: The Relationship Between PACE and the Competitive Framework... 23

4 Page 4 Chapter One: Benchmarking the Best-in-Class Business Context Learning is fundamental. This is true not only for children and education systems, but for businesses as well. As organizations begin to emerge from the murky global economic climate of the last decade, they realized that being able to build and develop talent from within is a critical capability. In fact, respondents to Aberdeen s 2013 Human Capital Management Trends study cited identifying, and ultimately closing, gaps between the skills and capabilities their current workforce and the skills and capabilities required by future business plans as their top strategic priority (cited by 47%). And 91% of respondents to this study indicate they plan to maintain or increase their level of investment in learning within the coming year. While organizations understand the importance of learning and development, their resources are not unlimited, and they must prioritize their learning investments on the individuals, technologies, and processes that will yield the best results. Aberdeen s 2013 look at the state of learning and development has found that two critical groups have become top priorities college hires and organizational leaders. The need for more leadership talent is the number one pressure driving learning activities within organizations today (Figure 1). Organizations understand that leadership talent is not widely available in the open marketplace, and they must learn how to develop talent from within in order to remain competitive. Fast Facts 40% of organizations say their college hires will require some additional coaching and training to be effective members of the workforce 29% say they will have to spend significant time training and developing their college hires Figure 1: Pressures Driving Learning Activities

5 Page 5 As in previous years, the need to realign the organization around shifting strategies is still important, but it is no longer the top priority when it comes to shaping learning initiatives. The ability to identify and close skill and capability gaps, and maintain a sustainable leadership pipeline, is incredibly important. At the same time that they are focusing on developing future leaders, organizations also know that these future leaders start out their career as new college hires. This particular group, and its apparent lack of readiness for the workforce, has received much attention in the media of late, for good reason. When asked if college hires are prepared to be effective members of the workforce, the results were astounding. 40% of organizations say their college hires will require some additional coaching and training to be effective members of the workforce 29% say they will have to spend significant time training and developing their college hires Only 10% indicate that their new college hires are ready to contribute and get up to speed as quickly as any other new hire Despite these gaps, only 36% of organizations indicate they had dedicated leadership programs for emerging leaders, and just 19% have programs for new college hires though as we will see later in this report, topperforming organizations are much more likely to focus on these groups. Organizations seem to understand the problem they face, but still lack the strategies and processes to solve them. Fast Facts Only 36% of organizations indicate they have dedicated leadership programs for emerging leaders, and just 19% have programs for new college hires. The following sections of this report will look at how organizations that achieve higher levels of organizational performance differentiate their approach to learning and development overall, and particularly for these critical employee groups. The Maturity Class Framework Aberdeen used three key performance criteria to distinguish the Best-in- Class from Industry Average and Laggard organizations. These criteria were designed to identify organizations achieving high levels of organizational and individual performance, in order to understand the types of learning initiatives, processes, tools, and technologies that top performing organizations put in place to achieve this level of success. Employee Performance. Measured as the percentage of employees receiving a rating of exceeds expectations or better on their most recent performance review. This metric is an indicator of an individual s ability to achieve and exceed performance goals. Leadership Bench Strength. Measured as the percentage of key positions with at least one ready and willing successor identified. This metric is an indicator of organizational ability to both develop and retain top-performing talent.

6 Page 6 Revenue. Measured as the percent of year-over-year improvement in revenue attainment per FTE. This metric is an indicator of overall organizational performance and ability to execute on business strategy. Table 1: Top Performers Earn Best-in-Class Status Definition of Maturity Class Best-in-Class: Top 20% of aggregate performance scorers Industry Average: Middle 50% of aggregate performance scorers Laggard: Bottom 30% of aggregate performance scorers Mean Class Performance 83% of employees received performance ratings of exceeds performance expectations 78% of key roles have one or more ready and willing successor 13% year-over-year improvement in revenue per FTE 55% of employees received performance ratings of exceeds performance expectations 49% of key roles have one or more ready and willing successor 7% year-over-year improvement in revenue per FTE 34% of employees received performance ratings of exceeds performance expectations 26% of key roles have one or more ready and willing successor 1% year-over-year improvement in revenue per FTE Fast Facts 91% of respondents indicate they plan to maintain or increase their level of investment in learning within the coming year. The Best-in-Class PACE Model Using learning to improve overall business performance, and help overcome skill shortages in the marketplace requires a combination of strategic actions, organizational capabilities, and enabling technologies that can be summarized as follows: Providing consistent learning and development opportunities throughout the employee lifecycle Ensuring that learning efforts are closely tied to business strategy, and measured by business outcomes Involving organizational leadership in both developing and executing learning strategy Table 2: The Best-in-Class PACE Framework Pressures Actions Capabilities Enablers The need for more leadership talent Lack of key skills Provide more consistent development experience at all Performance goals are agreed to by managers and employees Visible senior leadership Pre-hire assessments (Best-in-Class adoption) Employee self-service portal for access to learning

7 Page 7 Pressures Actions Capabilities Enablers in the marketplace requires development from within Changes to product, process, or strategy requiring reeducation and realignment career stages More closely link learning programs to business goals Define and build a consistent set of competencies to guide development activities support for learning and development efforts A consistent competency model is used for hiring, development, and performance management Development plans are agreed to by managers and employees Learning programs map directly to individual employee development plans Customer feedback and / or demand information is used to determine learning needs and priorities Learning management system (LMS) Employee performance management system Post-hire assessments Best-in-Class Strategies Overwhelmingly, the most common strategy cited by Best-in-Class organizations is to provide a more consistent development experience at all career stages (Figure 2). Best-in-Class organizations are 78% more likely than Laggard organizations to cite this as a top strategy. These topperforming organizations understand that learning is not a one-time experience, but an ongoing process that must be facilitated throughout an individual s career. A strategic focus on career-long learning is important given the gaps that all organizations see among early career professionals, and among the leadership ranks.

8 Page 8 Figure 2: Learning Strategies in Place Part of why these Best-in-Class organizations are able to focus on expanding their definition of learning is that they have already overcome two other critical challenges that are the strategic focus of Industry Average and Laggard organizations linking learning programs to business results and defining and building a consistent set of competencies to guide development. It is very difficult to create a comprehensive, career-long learning path without business buy in and a strong picture of what skills and capabilities will be required of individuals as they progress through their career. Best-in- Class organizations are 70% more likely than All Other organizations (78% vs. 46%) to have a defined competency model already in place, which may explain why they are so much less likely to cite it as a top strategy. And 63% of Best-in-Class organizations say they can link their learning programs to organizational profitability with 23% indicating they also have the data to back up this assertion. By comparison, just 7% of Laggard organizations have the data to link learning programs to organizational profitability. In order to move up the maturity curve, these organizations must link learning to the business and define competencies before they can implement a more consistent development experience. Moving up the maturity curve is it important goal, because Best-in-Class organizations experience significant impact to their business performance as a result of their focus on learning. While this report used critical business metrics to define top performers individual employee performance, bench strength, and revenue organizations that use learning to improve performance in these key areas also see improved performance in employee engagement, their ability to fill leadership positions with internal candidates, and their ability to retain talent (Figure 3).

9 Page 9 Figure 3: The Impact of Best-in-Class Learning Scarcity of talent is a critical issue for all organizations. Organizations with a strong learning focus are not only able to achieve better results today, they are better positioned to compete in the future by creating a culture in which employees are engaged and willing to stay with their organization, allowing the company to fill critical positions from within. Given the competitive nature of the talent marketplace, organizational capability in developing leaders internally will provide a distinct strategic advantage for organizations going forward. In the following chapters this report will explore how organizations execute their learning programs to generate these impressive results. Aberdeen Insights Strategy Organizations that get the most out of their learning initiatives are also the ones putting the most into them. Top-performing organizations simply spend more time on learning and training activities, and involve more stakeholders in learning programs. On average, employees at Bestin-Class organizations spend about 7.1 days per year in formal training programs, as compared to 6.7 days for All Other organizations. Of course, as we will see in Chapter Two, formal training is not the only component of Best-in-Class learning, but it is important to note the priority that top-performing organizations seem to place on learning by devoting more time to it. These top-performing organizations also extend learning to more groups inside and outside the organization. Figure 4 below highlights the fact

10 Page 10 Aberdeen Insights Strategy that Best-in-Class organizations are significantly more likely to have dedicated learning programs for individuals at all stages of the employee lifecycle, as well as to recognize the importance of learning for channel partners, customers, and even part-time or contingent labor. Figure 4: Groups with Dedicated Learning Programs Given the importance organizations place today on developing the next generation of leaders internally, the fact that Best-in-Class organizations are 59% more likely (51% vs. 32%) to have dedicated programs for emerging leaders, and 73% more likely (69% vs. 40%) to have programs for front-line leaders means that they will have a real advantage in the future when it comes to sourcing leaders internally. These organizations must also ensure that they take advantage of learning and development activities to engage these leaders so that they stay with the company long-term. Best-in-Class organizations also gain competitive advantage by focusing on college hires and getting them up to speed quickly. They are more than twice as likely (34% vs. 15%) to provide dedicated programs for new college hires. Given the critical skill gaps that

11 Page 11 Aberdeen Insights Strategy many organizations are challenged by when it comes to these early career professionals, Best-in-Class organizations seem to understand that learning is the secret to overcoming critical skill gaps. In the next chapter, we will see what the top performers do to achieve these gains.

12 Page 12 Chapter Two: Benchmarking Requirements for Success The right mix of learning strategies, practices, and technologies enables organizations to achieve business results. Competitive Assessment Aberdeen Group analyzed the aggregated metrics of surveyed companies to determine whether their performance ranked as Best-in-Class, Industry Average, or Laggard. In addition to having common performance levels, each class also shared characteristics in five key categories: (1) process (the approaches they take to execute daily operations); (2) organization (corporate focus and collaboration among stakeholders); (3) knowledge management (contextualizing data and exposing it to key stakeholders); (4) technology (the selection of the appropriate tools and the effective deployment of those tools); and (5) performance management (the ability of the organization to measure its results to improve its business). These characteristics (identified in Table 3) serve as a guideline for best practices, and correlate directly with Best-in-Class performance across the key metrics. Fast Facts Best-in-Class organizations are: 76% more likely to utilize user-generated video content 74% more likely to use twoway video collaboration tools 54% more likely to use mobile learning; and 51% more likely to use social learning tools in support of their learning strategies. Table 3: The Competitive Framework Best-in-Class Average Laggards Performance goals are agreed to by managers and employees Process Organization Knowledge Technology 86% 78% 69% Development plans are agreed to by managers and employees 78% 70% 62% Visible senior leadership support for learning and development efforts 79% 65% 46% A consistent competency model is used for hiring, development, and performance management 78% 48% 43% Learning programs map directly to individual employee development plans 75% 39% 39% HCM technology currently in use:

13 Page 13 Best-in-Class Average Laggards Performance 76% Pre-hire assessments 69% Employee self-service portal for access to learning 65% LMS 64% Employee performance management system 60% Post-hire assessments 49% Pre-hire assessments 56% Employee self-service portal for access to learning 47% LMS 61% Employee performance management system 40% Post-hire assessments 50% Pre-hire assessments 37% Employee self-service portal for access to learning 28% LMS 56% Employee performance management system 48% Post-hire assessments Managers are held accountable for development progress of their team members 62% 50% 50% Capabilities and Enablers Aberdeen s analysis of the Best-in-Class shows that organizations must support both employees and managers with tools and processes to ensure effective learning. At all levels of the organization, individuals and their managers must have a clear understanding of learning goals, and have access to tools that will enable them to link learning to business priorities. Process Companies understand that while HCM and learning technology leads to a more productive workforce, the active dialogue between employees and their managers is what truly separates Best-in-Class companies from the rest of the pack. When a manager can clearly communicate the needs of the organization and how an employee s individual actions relate to the progress and growth of the company, there is a greater chance of success. It comes as no surprise that Best-in-Class companies are 15% more likely (86% vs. 75%) to have managers and employees agree to performance goals, as well as 15% more likely (78% vs. 68%) to have managers and employees agree to development plans than All Others. There is a greater chance employees will be able to execute on their performance goals when they also understand the development support they will have to reach those goals. It is also much easier to hold employees and managers accountable for performance and development progress when they are on the same page. Similarly, there is a higher likelihood that managers will stay on top of communication about internal growth when they are held accountable by senior leadership to track, report, and share employee performance and development with them and above.

14 Page 14 These organizations also understand that agreeing upon performance and development goals is just the first step. Employees pursue continual feedback to ensure that they achieve these goals. Fifty-two percent (52%) of Best-in-Class companies conduct formal reviews at least annually, and more than a quarter (28%) of Best-in-Class organizations have informal reviews on at least a monthly basis. This continual flow of information through formal and informal channels ensures that employees have a better grasp on their progress and how their performance is perceived, and managers also can see where their team members stand. Organization In order to maintain effective learning programs, companies don t just need buy-in from the employees; they also need full support from senior leadership. Best-in-Class companies are 34% more likely (79% vs. 59%) to have visible senior leadership support for learning and development efforts than All Others. This support is important in multiple ways. First of all, leaders must model the importance of learning through participation in learning programs themselves and encouraging their direct reports to do the same. Senior leaders must also work with learning leaders to ensure that learning programs and content are closely aligned to business priorities. Learning cannot be siloed, but in order to break down these barriers senior leaders must ensure that organizational strategy and priorities are clearly communicated, so they can serve as the core of all learning initiatives. As noted in Figure 2, many organizations, particularly Laggards, struggle to link learning to business priorities. Executive leadership support is critical to overcoming this barrier. One of the reasons top-performing organizations may find attaining this level of executive support easier is the fact that, as mentioned earlier, 63% of Best-in-Class organizations indicated they possessed the ability to link changes in their profitability to their learning initiatives. What s more, 23% of Best-in-Class companies noted the link could be validated through data. This is an important lesson for organizations struggling to get leadership buy-in. The more learning can be tied to metrics that are important to the business, such as profitability, the more likely they will receive leadership attention. And the more closely linked learning programs are with business priorities, the easier it will be to measure this impact. Knowledge Management As discussed in Chapter 1, Best-in-Class organizations offer more consistent learning programs throughout the employee lifecycle, because these companies have determined that learning is vital to their success and engage individuals and present learning from their first day on the job all the way through to leadership development. Best-in-Class companies employ two key differentiators a consistent competency model used for hiring, development, and performance management and the ability to map learning programs directly to employee development plans which allows for the most effective growth of all levels of employees. Having a consistent

15 Page 15 competency model ensures that the business and HR have a common language by which to discuss and evaluate talent. It also helps individuals see exactly what is required of them to move to the next level. With a consistent competency model in place, companies are better equipped to provide useful performance reviews, develop leaders internally to fill key positions, and help individuals exceed performance expectations by setting clear goals than companies without a consistent competency model in place (Figure 5). Figure 5: A Consistent Competency Model Pays Off A consistent competency model lays the foundation for organizational ability to create consistent learning programs throughout the employee lifecycle the top strategy identified by Best-in-Class organizations. It is also at the core of enabling productive conversations between employees and managers on performance and development goals. And it creates a consistent model against which to evaluate talent during the hiring, onboarding, and development process. Once this model is in place, it becomes far easier to map individual development plans to the right skills and capabilities to ensure continued individual and organizational performance. Technology Organizations use a wide variety of technologies to support their learning efforts, but some of the most valuable are focused on understanding the gaps between individuals capabilities and what is required by the business. In particular, organizations use pre-hire assessments, notably for college hires, and post-hire assessments, particularly for senior leadership. Pre-hire assessments, used by more than three-quarters (76%) of Best-in-Class

16 Page 16 companies, can provide employers with a great deal of insight into the personal skills, general knowledge, and business acumen of prospective employees. And of course, having a consistent competency model in place to guide development gives organizations a basis from which to assess. This information gives employers a distinct understanding for how much time, energy, and resources it could take for them to get a candidate up to speed and ready to contribute. And given the gaps noted previously in college hires, understanding this investment is critical. Organizations need to understand which skills and characteristics they will be able to train for, and which ones they must select for, to ensure that they have candidates who will be productive quickly. It s also incredibly important to use pre-hire assessment output to guide learning during the onboarding phase and tailor this process to focus on what each employee needs to get up to speed. As valuable as assessment tools can be in helping individuals and managers understand what development is required, organizations also use technology to help learners access the appropriate information. Best-in-Class organizations are 86% more likely (69% vs. 37%) to provide employee selfservice access to learning resources. Allowing individuals to take action to close their learning gaps is the ultimate goal of many learning programs. There has been an increasing shift towards just in time and informal learning. Much as individuals have come to expect the ability to Google the answer to any question they have in their personal life, from how to fix the dishwasher to how to roast a turkey, they expect to be able to access learning information they need in the moment. In fact, the scales have tipped slightly in favor of this sort of unstructured, on-demand content. Respondents estimated that 51% of their current learning content is unstructured defined as content learners can access at will outside of prescribed learning courses, including video, chat with subject matter experts, social learning, etc. as opposed to structured defined as traditional coursework of prescribed content. Using technology to allow for user creation and access of content is a growing trend. The technology insight section at the end of this chapter explores in more detail some of the tools organizations use to enable access to learning content. Fast Facts 51% of current learning content is estimated to be unstructured defined as content learners can access at will outside of prescribed learning courses, including video, chat with subject matter experts, social learning, etc.

17 Page 17 Aberdeen Insights Preparing College Hires Given that 63% of organizations report at least some additional coaching and training in order to get their new college hires up to speed, it begs the question, what are these young professionals lacking as they enter the workforce? The most commonly cited skill or capability gaps, cited by 53% of All Respondents, was that their college hires lack critical thinking skills, which can be a significant challenge that corporate learning programs must learn to overcome (Figure 6). Figure 6: Recent College Graduates Need a Little TLC Other areas college hires need assistance with include writing, presentation skills, general business acumen, time management, personal leadership ability, and industry / domain expertise. The use of a consistent competency model that helps organizations understand and quantify the gaps between current capability and organizational requirements to help guide development is an important tool at all stages. Organizations should also consider the use of assessment tools to ensure that they provide a steady stream of employees ready to meet the changing needs of the business. Performance Management Measuring learning has been an age-old challenge. As every part of the organization today is under increased scrutiny when it comes to spending, learning programs and learning organizations must ensure that they are closely linking their processes and tools to business priorities. It s incredibly important to have business buy-in when defining the metrics by which learning programs will be measured. Learning leaders know that Fast Facts Best-in-Class organizations are 63% more likely than All Other organizations to have an LMS in place to track and administer learning (classroom, elearning, and/or virtual) programs, as well as planning and tracking learner progress or activities.

18 Page 18 measurements of learning programs must evolve far beyond how many hours of training are completed and whether or not employees were satisfied with the formal training course. Learning organizations must dynamically adapt, and correlate their activities to ongoing improvement in business results. Working with the business to get buy-in for learning programs and agreement on key metrics is critically important. One way to ensure this linkage is to hold managers accountable for the development of their direct reports. Currently, 62% of Best-in-Class organizations have this capability in place. When managers are measured on the growth, development, and even promotion of their direct reports, they will make learning a priority and start to build a true learning culture throughout the organization. Aberdeen Insights Technology While the LMS (learning management system) has traditionally been the technology many people associate with learning, many other technologies are in wide usage today. Best-in-Class organizations are still 63% more likely than All Other organizations to have an LMS in place (65% vs. 40%) to track and administer learning (classroom, elearning, and/or virtual) programs, as well as planning and tracking learner progress or activities. But the LMS is only part of the story. The number one challenge identified by Best-in-Class organizations when it comes to delivering on their learning strategies was the ability to deliver learning in ways that appeal to multiple generations and learner types, with 50% of Best-in-Class organizations citing this as a top challenge, as compared to just 23% of All Others. Just as Best-in-Class organizations understand that they need to provide a consistent learning process at all stages of the career cycle, they also realize they need to provide learning in multiple formats and modalities. Learning technology has evolved dramatically in recent years to support the diverse goals of these organizations. As the consumerization of technology, driven by the evolution of smart phones, tablets, and the Internet, has changed every employee s expectations, organizations are looking to a multifaceted approach to learning, with technology playing a starring role. In this study, Aberdeen asked respondents not only which learning tools and modalities they used, but which they perceive to be most effective. As illustrated in Table 4 below, formal and informal coaching and on-thejob training, along with classroom-based, instructor-led training are still considered among the most effective methods of learning and knowledge transfer. But the use of e-learning and blended learning strategies that combine traditional and technology enabled learning are also not only widely used by Best-in-Class organizations, but also considered to be quite effective as well.

19 Page 19 Aberdeen Insights Technology Table 4: Learning Methods and Effectiveness Best-in-Class Effectiveness Best-in- Class Using All Others Using Formal mentoring / coaching % 91% Formal on-the-job training % 94% Informal on-the-job training (learn by doing) % 97% Instructor-led, classroombased training % 96% Blended-learning approach (combining instructor-led and elearning) % 76% Asynchronous, self-paced elearning (e.g., on-demand online content portal) % 79% Rated on a scale of 1 to 5, where 1 = least effective and 5 = very effective It is interesting to note that Best-in-Class organizations are more likely to use almost every learning modality surveyed, with the exception of instructor led, classroom-based training. While 90% of Best-in-Class organizations still use this method, 96% of all other organizations do, indicating their reliance on traditional methodologies and the fact that they are far less likely to take blended approaches, or use technology such as e-learning, video learning, or other technology enabled formats. In addition to the technologies listed above, Best-in-Class organizations are 76% more likely to utilize user generated video content (74% vs. 42%), 74% more likely to use two-way video collaboration tools (75% vs. 43%), 54% more likely to use mobile learning (77% vs. 50%), and 51% more likely to use social learning tools (86% vs. 57%) in support of their learning strategies. The growth of video, mobile, and social learning, as well as a focus on collaborating to facilitate learning, has been the growing trend in learning programs over the past several years. Best-in- Class organizations are clearly accelerating their adoption of these critical strategies.

20 Page 20 Chapter Three: Required Actions Whether a company is trying to move its performance in learning from Laggard to Industry Average, or Industry Average to Best-in-Class, the following actions will help spur the necessary performance improvements: Laggard Steps to Success Link learning to business priorities. There are many reasons why learning and business priorities must be connected. It is how organizations build executive and managerial buy-in, how learning organizations can help secure funding for initiatives and technology, and it is how to ensure that the organization continues to build the talent it will require to remain competitive in the future. Today just 7% of Laggard organizations have data linking their learning initiatives to organizational profitability, as compared to 23% of the Best-in-Class. While clearly this linkage can be difficult to measure even for top performers, working towards this goal is important for all organizations. Consider tools to help track and manage learning. Whether or not you believe that the rumors of the death of the LMS are wildly exaggerated or not, it is clear that organizations do need tools to help them track and administer learning (classroom, elearning, and/or virtual) programs, as well as planning and tracking learner progress or activities. Currently just 20% of Laggard organizations use an LMS, as compared to 65% of Best-in-Class companies. Fast Facts 80% of Best-in-Class organizations take a blended learning approach. 78% of Best-in-Class organizations have a defined competency model in place to guide development activities. Industry Average Steps to Success Define a consistent competency model. The word competencies can sound daunting to some, but at the end of the day it simply means having a language by which to talk about the skills, knowledge, and capabilities required of various career stages and in various job roles. Having this definition to guide assessment, hiring, development, and performance management is critical to success. But today just under half (48%) of Industry Average organizations have a consistent competency model in place, as compared to 78% of the Best-in-Class. As noted previously, overcoming this hurdle is a critical step to move up the maturity curve and allow the organization to focus on building a continuous learning environment that supports business performance. Look to blended learning approaches. Organizations today must balance structured and unstructured, formal and informal, in person and virtual, mobile and social aspects to all their learning programs. Finding ways to blend traditional and technology enabled learning can help organizations meet the needs of their many

21 Page 21 stakeholders inside and outside the organization. Currently, 77% of Industry Average organizations take a blended learning approach, versus 88% of the Best-in-Class. But Best-in-Class organizations are also finding it be much more effective, breaking it out as one of the top five most effective learning modalities with a score of 3.4 on a scale of 1 to 5, where 1= least effective and 5= most effective, as compared to score of 2.6 among Industry Average organizations. A focused approach to blended learning would help increase adoption as well as effectiveness. Best-in-Class Steps to Success Continue and enhance mobile and social learning strategies. Given the rise of unstructured content, and demands of a multigenerational and often geographically dispersed workforce, mobile and social learning strategies are critical. While Best-in-Class organizations are 54% more likely to use mobile learning (77% vs. 50%) and 51% more likely to use social learning tools (86% vs. 57%) in support of their learning strategies, there is still room to grow. And the tools that drive mobile access and social interaction are continuing to evolve. Tablets and smartphones are just the current iteration of how we access information and collaborate on the go. To stay ahead of the curve, organizations must continue to focus on this critical capability as part of their overall learning program. Focus on leadership development to build sustainable competitive advantage. Despite looming leadership gaps, and the fact that the need for more leaders is the number one driver of learning initiatives today, just 69% of Best-in-Class organizations have programs in place that are dedicated to front-line leadership development, and only 51% have dedicated programs for emerging leaders. Organizational capability to develop great leaders will not only make an organization a magnet for top talent, it will put the organization in control of its future by creating an internal talent pool that will insulate the organization from external leadership shortages. Aberdeen Insights Summary Learning has never been more important to organizational success. With the failure of colleges and universities to adequately ready the next generation of our workforce, looming leadership shortages, and the everexpanding network of individuals inside and outside the organization that can benefit from corporate learning, learning leaders have a lot on their plate. But adopting the right set of tools and initiatives, guided by business priority, will enable learning leaders to not only build organizational capability and improve performance today, but also create sustainable competitive advantages into the future.

22 Page 22 Appendix A: Research Methodology Between July and September 2013, Aberdeen examined the use, the experiences, and the intentions of more than 180 enterprises learning to enhance business performance. Aberdeen supplemented this online survey effort with telephone interviews with select survey respondents, gathering additional information on learning strategies, experiences, and results. Responding enterprises included the following: Job title: The research sample included respondents with the following job titles: Manager (26%), Director (23%), Executive (19%), Consultant (10%), Staff (7%), General Manager / Managing Director (4%), Partner / Principal (3%), EVP / SVP (2%), Vice President (2%), Other (2%), CFO (1%), and CIO (1%). Department / function: The research sample included respondents from the following departments or functions: Human Resource / Talent Management (27%), Business Development / Sales (11%), Corporate Management (9%), Customer Service / Support (9%), Information Technology (5%), and Marketing (5%). Industry: The research sample included respondents from various industries. Industrial equipment manufacturing and software were tied as the largest industries (11%) of the sample. Geography: The majority of respondents (58%) were from North America. Remaining respondents were from Europe (22%), the Asia-Pacific region (12%), Latin America (Central and South America, not including Mexico) (3%), Middle East (3%), and Africa (2%). Company size: Nineteen percent (19%) of respondents were from large enterprises (annual revenues above US $1 billion); 30% were from midsize enterprises (annual revenues between $50 million and $1 billion); and 50% of respondents were from small businesses (annual revenues of $50 million or less). Headcount: Thirty-four percent (34%) of respondents were from large enterprises (headcount greater than 1,001 employees); 32% were from midsize enterprises (headcount between 101 and 1,000 employees); and 36% of respondents were from small businesses (headcount between 1 and 100 employees). Study Focus Responding executives completed an online survey that included questions designed to determine the following: The degree to which learning programs were in place throughout the organization The structure and effectiveness of existing learning programs Current and planned use of technology to support learning initiatives and business performance The benefits, if any, that have been derived from learning initiatives The study aimed to identify emerging best practices for learning and learning technology, and to provide a framework by which readers could assess their own management capabilities.

23 Page 23 Table 5: The PACE Framework Key Overview Aberdeen applies a methodology to benchmark research that evaluates the business pressures, actions, capabilities, and enablers (PACE) that indicate corporate behavior in specific business processes. These terms are defined as follows: Pressures external forces that impact an organization s market position, competitiveness, or business operations (e.g., economic, political and regulatory, technology, changing customer preferences, competitive) Actions the strategic approaches that an organization takes in response to industry pressures (e.g., align the corporate business model to leverage industry opportunities, such as product / service strategy, target markets, financial strategy, go-to-market, and sales strategy) Capabilities the business process competencies required to execute corporate strategy (e.g., skilled people, brand, market positioning, viable products / services, ecosystem partners, financing) Enablers the key functionality of technology solutions required to support the organization s enabling business practices (e.g., development platform, applications, network connectivity, user interface, training and support, partner interfaces, data cleansing, and management) Table 6: The Competitive Framework Key Overview The Aberdeen Competitive Framework defines enterprises as falling into one of the following three levels of practices and performance: Best-in-Class (20%) Practices that are the best currently being employed and are significantly superior to the Industry Average, and result in the top industry performance. Industry Average (50%) Practices that represent the average or norm, and result in average industry performance. Laggards (30%) Practices that are significantly behind the average of the industry, and result in below average performance. In the following categories: Process What is the scope of process standardization? What is the efficiency and effectiveness of this process? Organization How is your company currently organized to manage and optimize this particular process? Knowledge What visibility do you have into key data and intelligence required to manage this process? Technology What level of automation have you used to support this process? How is this automation integrated and aligned? Performance What do you measure? How frequently? What s your actual performance? Table 7: The Relationship Between PACE and the Competitive Framework PACE and the Competitive Framework How They Interact Aberdeen research indicates that companies that identify the most influential pressures and take the most transformational and effective actions are most likely to achieve superior performance. The level of competitive performance that a company achieves is strongly determined by the PACE choices that they make and how well they execute those decisions.

24 Page 24 Appendix B: Related Aberdeen Research Related Aberdeen research that forms a companion or reference to this report includes: Talent Acquisition 2013: Adapt Your Strategy or Fail; September 2013 Take Me to Your Leader: Developing the Leadership Pipeline; June 2013 Three Strategies for Linking Onboarding and Learning Initiatives; May 2013 Assessments 2013: Finding the Perfect Match; April 2013 Strategic Onboarding 2013: A New Look at New Hires; April 2013 Zoom in on Video Learning; February 2013 Human Capital Management Trends 2013: It s a Brave New World; January 2013 Learning and Performance: Developing for Business Results; October 2012 Information on these and any other Aberdeen publications can be found at Authors: Mollie Lombardi, Vice President and Principal Analyst, Human Capital Management, (mollie.lombardi@aberdeen.com); Zach Lahey, Senior Research Associate, Human Capital Management, (zach.lahey@aberdeen.com) For more than two decades, Aberdeen s research has been helping corporations worldwide become Best-in-Class. Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provide organizations with the facts that matter the facts that enable companies to get ahead and drive results. That s why our research is relied on by more than 2.5 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of the Technology 500. As a Harte-Hanks Company, Aberdeen s research provides insight and analysis to the Harte-Hanks community of local, regional, national and international marketing executives. Combined, we help our customers leverage the power of insight to deliver innovative multichannel marketing programs that drive business-changing results. For additional information, visit Aberdeen or call (617) , or to learn more about Harte-Hanks, call (800) or go to This document is the result of primary research performed by Aberdeen Group. Aberdeen Group s methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc. (2013a)