This post originally appeared on the Learning Hacks blog
As I stated in my previous post, I feel the Business Model Canvas developed by Alexander Osterwalder is good place for today’s training organizations to start as they rethink their role and structure. Before I propose the hack let’s get a quick grounding in the tool as it exists for startups.
Business Model Canvas: Quick Primer
With apologies to Osterwalder, who wrote an entire book (which I highly recommend) on this model, let me quickly break it down for the purpose of the discussion here. The business model canvas is broken into 9 buckets that can be thought of as 3 bundles anchored by the central value proposition.
Bundle 1: Organization (key resources, activities and partners)
These buckets describe the inputs required to deliver the value proposition
Bundle 2: Customer (relationship, channels and segment)
These buckets describe the who, how and what of the market you are looking to serve.
Bundle 3: Money (cost structure and revenue streams)
These buckets describe the investment and return for the organization.
By starting with a draft value proposition a startup can quickly test it with customers and determine the best way to deliver it. This allows them to rapidly build a set of assumptions in each bucket that can be tested, refined, validated or changed as the value proposition is honed with customers. It is this process of customer development, assumption testing and iteration that I feel is a perfect fit for today’s training organizations. Obviously, this canvas is geared towards external facing startups not internal departments so some modification is needed.
Training Organization Canvas: Hack 1
The first thing we need to do is to recognize that Bundle 3 (money) is a function of the larger organization. For cost structure it is important to recognize the total costs of learning (TCoL) that the larger enterprise is investing in order to deliver on the value proposition. Frequently organizations look only at the direct line items related to training (payroll, travel, third-party spend) and fail to capture the investment made in the form of SME time, time away from job, and others. In one organization I assessed we found that while their training staff to employee ratio reflected an efficient organization the company was investing more than the entire training department’s payroll in SME time alone.
The revenue streams bucket is the aggregation of the all the business results produced by the “products” shipped in support of the value proposition. I have heard many complain that this metric is “too hard” or “guess work”. To the former I say “yes it is”, which is exactly why it is worthwhile. To the latter I would suggest that just as the shift of advertising from traditional to newer media has made this once faith-based activity increasing metrics-driven so will learning. Data has an increasing role is many aspects of the new training organization and may offer some of the biggest breakthroughs in the coming years.
Training Organization Canvas: Hack 2
Bundle 2 (customer) is an area in much need of an innovative approach. Today’s training functions are quick to tell you which employee groups they are serving but frequently do not understand why specific groups are not using them. By forcing the discussion of what type of relationship customer’s want and using an engaging customer development process training can inform its value proposition, optimize its channels and products to drive improved business results for the whole company. When thinking about the customers of learning one has to remember that in the case of internal learning the customers (participants, managers, executives) pay with their attention and engagement not cash but otherwise the analogy remains.
Training Organization Canvas: Hack 3
Bundle 3 (organization) requires little hacking and brings us back to the Epic Debate question that set this all off. These buckets force us to build the learning department to meet the requirements defined by the value proposition and the customer bundle. These buckets ask us to think in term of what needs to be done not how it will be done or who will do it (ie. instructional design is an activity not a role). It challenges us to ask what new activities, like curation or social media facilitation, not currently encompassed by the training group need to be included based on what our customers will pay for.
The key partners bucket also asks us to re-evaluate what we do in-house versus outsourcing. When the way in which you accomplish key activities is rapidly changing companies often push the burden of that change on partners rather than taking it on. This allows companies to more smoothly ride the innovation curve. A global technology company I consulted with had a goal of turning over a percentage of its engineers every year. This allowed them to bring in knowledge of current programming technologies. Use of partners is a much better long-term approach IMHO.
So What’s Next?
All of these bundles represent areas ripe for disruption of today’s model. Innovation in any one of them could lead to significant improvement. I am eager to dive deeper into each but as I stated at the beginning, these buckets are all anchored to the value proposition so that is where we need to go next.
As always, your comments, suggestions, feedback are eagerly awaited.