Check out the transcript from episode two of AHRI’s new podcast, Let’s Take This Offline, where our host Shelley Johnson talks all things L&D with Rod Farmer.
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Shelley Johnson: Hi, welcome to Let’s Take This Offline, a brand new podcast from the Australian HR Institute. My name is Shelley Johnson. I’m a proud AHRI member. And I’ve spent over a decade leading HR teams and helping to create positive work cultures. Whether you’re on your commute, taking a lunch break or looking for inspiration, this podcast aims to share meaningful conversations and actionable insights that leave you feeling inspired, informed and ready to take action.
One of the things keeping employers and HR leaders up at night is the need to upskill and rescale employees in order to keep pace with the changing business environment. AHRI’s 2023 September quarter work outlook report showed that one in five respondents didn’t feel their employees were proficient in their current roles. The upskilling agenda is likely to become even more critical this year as organisations do their best to respond to the changing nature of work brought about by the rise of AI technologies, but often learning and development and HR professionals face barriers, getting people engaged in the programmes that they invest so much time, effort and money into. So how can we create a programme that actually gets cut through? We’re talking about this with today’s guest, Rod Farmer who’s an associate partner at McKinsey and CO, and has worked extensively on future of work strategies with companies all over the world. In this conversation, Rod is going to share his thoughts on how we can change our mindsets and dialogue around re skilling. And he offers an interesting case study that delivered impressive results that I know any HR professional listening will find value in. Ron, welcome to the podcast.
Rod Farmer: Glad to be here. Thanks for having me.
Shelley Johnson: I’m really keen to dig into this topic with you today Rod because I know you’ve got such great expertise in this space. But first, I want to zoom out and ask what advice would you offer to any HR professional listening about how they can get cut through with their learning and development programme?
Rod Farmer: I would say the number one thing that I would do was to get them to focus on contextualised upskilling and reskilling rather than self paced digital opt in learning for a couple of good reasons. So upskilling and reskilling. What we see is it’s one of the most profound, systematic ways of which an organisation can achieve a but I call it a triple dividend. And a triple dividend is where you drive revenue or performance, you’re taking out cost and actually having a social benefit or employee benefit. So let’s think about this. We know that when you do upscaling rescaling right, there’s a 4x improvement in performance. There’s a 2x improvement in employee retention, which is churn, which is cost is a barrier to productivity and a whole range of other things. And we also know that there’s about a 10 to 15% improvement on employee satisfaction, which then also has a net net effect on culture. Now, this doesn’t happen with self directed learning, self directed learning, the global average for self directed digital learning from opting into a programme to completing that programme is 13% and 13% of people who go on to an online or self paced or digital learning, even completed, that’s a huge amount of wasted capital energy, emotional energy within an organisation around learning and cultural development for l&d. Right, and so I would say my number one thing is take a step back and really think about how we can take a much more contextualised upskilling reskilling approach.
Shelley Johnson: It’s such interesting data as well to hear that all of those self paced online learning courses that on average, it’s only 13% completion rate.
Rod Farmer: That’s exactly right. But it’s also not too surprising the sense of, Well, who are those 13% They’re probably a little bit more motivated, self motivated. It’s not related to the job. It’s independent of the job. It wasn’t curated and crafted for a particular enterprise or company or particular situation for the employee. So it’s not as relevant. And the final thing is that upon completion of that there’s very little recognition and reward. Yes, we can talk about micro certifications and badges and a whole bunch of other things. But at the end of the day, people really want to be able to play something in the day to day job, be recognised and rewarded by the managers, by the leaders by the organisation and when the thing that you’re learning is completely independent of how you’re actually asked to do your job. Why would you complete it? Why would you opt in? Why would you do it? And so I don’t think we need to, you know, over intellectualise this, but I think there’s a fairly easy cycle to understand what’s broken.
Shelley Johnson: It’s really interesting, and I guess I’m gonna wanna dig into it because you’ve had so much practical experience in this space? And I know, in our September work outlook report, it showed that one in five respondents felt their employees weren’t proficient in their roles. Does that statistic surprise you? Or do you feel like that’s something that you’re saying across the board?
Rod Farmer: Well, it’s definitely something I’m seeing across the board. And I’m never too surprised when I hear of any statistic that says that we’re lacking critical skills within our workforces, because this is something that we see globally. I’m very fortunate to work on these sorts of problems across multiple continents. And what I see fundamentally, is that in almost every country, there’s a really low degree of investment in talent and workforce development as a percentage of GDP. So we stepped back a little bit COVID, post pandemic, great attrition, you know, huge transitions and upheavals within sectors, sustainability, like huge shifts towards climate change. These are major shifts, but we’re not investing in our talent and our workforces. So I don’t want to draw too strong a correlation here. But it kind of begs the question of the funding and investments, not there, should we expect to see enough skills within the workforce in the workforce. The second thing that I’m seeing that doesn’t surprise me whatsoever is that we’re seeing a shift between a jobs based economy to a skills based economy. So it used to be that you would learn a job and become proficient in a job, but organisations now want far more flexibility and resilience from the workforce, which means they want to be able to tap into people’s current and latent skill sets. And so when we start to think about what are the people with deficiencies in their skills, it’s going to become more and more than the norm, as people look beyond a traditional job description or a role in that set of skills that they need, right? And so we need people with more varied skills at greater degrees of proficiencies. And so as we start to ask people to be more varied and flexible in their jobs, we’re going to find that that’s, you know, more of a challenge. But that’s where we’re headed, you know, skills based economy rather than jobs based economy.
Shelley Johnson: I mean, it’s interesting, because we have this challenge of, well, the data shows us that the organisation isn’t as proficient or skilled as we want, but then you make the comment of, well, we’re not investing in talent. So we’ve got this kind of dynamic of, well, how do we increase the skills without that investment? And I’d love to know, and I think this is really clear that reskilling based on the future of work based on how fast things are changing. It’s one of the most business critical things that organisations need to do right now. But so often, we hear that the learning and development programmes aren’t getting cut through or they’re not getting results. And so I think that’s why there’s this tendency not to invest, because we’re like, well, those programmes aren’t driving the change, or they aren’t giving us the results we’re after. So why do you think that’s happening? And how could we adjust our reskilling efforts to get that return that we’re after.
Rod Farmer: There’s probably two things one at a more strategic level and one at a very practical level. So what I would say is at a at a strategic level, and this has been a shift over the last couple of years, and not to throw more stats, but what we’ve seen is just through that COVID pandemic post pandemic area, we’ve actually seen a 25% year on year increase in the demand for upskilling and rescaling within the workforce. So there’s a bit of a context, we are on an upward trajectory to recognising the sort of changes that need to take place within the organisation. So where we sit right now is roughly around 60% of all CEOs compared to about 30%, about five years ago, who say that, you know, improving skills proficiency within the workforce is a top three priority. But that’s a huge shift from the top down, right? When you query your top level executives, and you say, if you were to name the five or six big levers that you could pull to really drive organisational performance and productivity, what would they be, and I won’t list them all out, but I’ll say is about number two, at about 85% of all respondents is upskilling and rescaling now there is a still a delta between what we’re now recognising from a strategic level and seeing it being pulled through the organisation. So let’s recognise we’re not there yet. Words and intents and actions often work at different timescales. That’s a fundamental shift. And so I think what’s being recognised is as organisations need to shift, they’re going to need to set different strategic goals and those different strategic goals are going to be need to be met by a more skills based workforce, which is then raising the aha moment of I think we’re going to have to be a lot more strategically focused on that l&d activities. And I think maybe that’s, you know, music to most HR and l&d professionals, but what it really means is you are mission critical to the future of that organisation if you’re going to have to, you know, if you’re going to have to avoid A significant disruption of your core business. If your industry or sector is going to go through an upheaval, you’re going to have to change your operating model, you might need to deliver different products or services, your people are going to have to work in different ways. They’re going to have to adopt these skills quickly. And on the job, which then gets me to my last, you know, my second very, very practical thing is we need to, and there’s many different ways you can embrace this, but I would say take on a lot more jobs to be done or contextualised approach to skills building. So I think about those sort of the Holy Trinity of upskilling, rescaling is formal social and on the job. So we’re very good at formal learning. The problem is that with formal learning that andragogy of it all, is that we went from sort of face to face classroom based learning, which has its pros and cons, to let’s just go digital, right. But what we didn’t also bring about was, where’s the social is the PDB learning, where’s the actual interaction with the rest of organisation, and where’s the on the job that you’re what I’m learning is relevant to what I’m trying to do day to day, which other people can observe, and tell me if I’m doing better or worse. And it gives me a sense of security, my job or job progression, or opportunity for salary advancement and get this virtuous cycle of the organisations moving forward, you’re moving forward. So number one is the big changes, it’s now a strategic priority, we need to see that flow from belief through to intended action. And the second part is, I think we do need to get back to a little bit more hybrid learning. But most importantly, there’s missing elements of social and on the job, which I think we’ve let fall between some cracks, as we just made a huge jump to digital online.
Shelley Johnson: I’d love to dig into this on the job piece. Because most HR professionals know this 70-20-10 model, we’ve all recited that in various meetings with managers where 70% of learning happens on the job 20% through mentoring and coaching and 10% in classroom or kind of formal learning styles. I’m just curious, what does good on the job learning look like? That practical component of how we help employees learn and reskill on the job?
Rod Farmer: My personal view is, I’m a very big proponent of apprenticeship. And maybe I’ll talk about this in more detail a little later on with a case study sort of wrapped around it to bring it to life. But when we talk about the job, like there’s a couple of questions we have, do we actually try to understand what that individual is trying to do on a day to day basis? What is their context of use? Who are they interacting with? What are the actual set of activities and steps that they need to perform in order to do that job, what are the enablers that they require. And when we talk about the skills, skill is a very big term, right skills are made up of competencies and competence are made up of proficiencies. Like we have, we actually stepped back and said, in order for you to do your job in your context of use, this is what you need to do. And this is what good looks like for you. And this is the step ladder that we want to take you on. And when you tailor learning to that, that’s when you get a lot more cut through than when we’re just saying let’s take the learning out into the field like field and forum. Like that’s the cut through. And not to get too academic about this. But if I, if I go back to the old sort of principles of scaffolded learning, you want to give somebody something that is just a little bit harder than what they’re currently able to do scaffolded or supported by the right structures, people, enablers, content technology, to enable them to get to that next level of performance, and then keep them there, habituated, and then move them forward. Again, you can’t do that if you don’t deeply understand what they’re trying to do within their job, and where they’re operating. So when I say on the job, I’m talking about a deeply rich understanding of the human doing the job and tailoring the loan to them, which obviously has implications for scale as well.
Shelley Johnson: I love that idea of apprenticeship because I’m just thinking back to that model of and reapplied to trade which is where a lot of our minds go when we think of apprenticeship. We think this, the master the apprentice, this four year process and journey you go through and exactly what you said, right? Each challenge is that little bit harder, but you’re not. You’re not overwhelmed to the point you’re completely out of your depth. It’s that stretch process. And you have someone who’s there and their role is to coach you and give you the next project that takes you that little bit further.
Rod Farmer: That’s exactly right. And it’s a shift for most organisations. We’ve been there in the past and I think it needs a little bit greater focus within the workforce these days as well.
Shelley Johnson: Are there some key factors that you find really important for organisations if they want to create a learning environment or a learning culture?
Rod Farmer: Yeah, that’s a good question. It’s hard to create a really strong learning culture. If you haven’t defined what are your strategic goals and the talent needs within those goals? Because there’s a lot of role modelling and influence and modelling that comes down from the executives. This is important To us, this is why what you’re doing is important. Can you see that importance in the thing that you’re doing day to day? Can you recognise your contribution? So the first part is always like, I’ll be, I’ll be clear on our strategic goals. And our skills and talent development fits into this and more than strategic workforce planning. Right? This is just real concrete, what are we trying to achieve? That next part is, again, what I’ve just mentioned, perhaps with the job, but it’s that supportive and social on-the-job environment. That’s where coaching comes in. I think coaching is a critical enabler, mentoring and coaching to create these learning environments, I think is really important. And I think the engagement of managers and leaders is another one. I mean, if you sit back from any research that you do, people will tell you, one of the hardest things to commit to learning is getting time away from the job and you’re getting time away from your leaders and managers. So bringing them into the process and helping them understand how individual growth equals organisational performance, your people better performing drives, organisation performance enables you to perform better as a manager and a leader. It’s one thing to say, you’ve got to be in the process to really embody that. Yeah,
Shelley Johnson: You’re so right there. And I think getting that leadership buy in getting them on the journey. Going back to the master and the apprentice concept. The role of that manager is so crucial in the learning piece. And I think sometimes for HR professionals, we feel like learning and development sits in a section within our team, and were the sole people responsible for it, instead of really getting that culture, right, where, hey, we need a dynamic here within this business where we’re all learning, we’re all committing to it. And so it’s encouraging to hear you talk about the CEOs who are now really committed to reskilling. Because that says to HR teams, there’s value here, this is going to be a core priority. And now I think for us, it’s about how do we get the learning structure and programmes right to generate the value and bring about the change when it comes to those skills and that proficiency. And I think the point you make right about mentoring is so important. I add that as HR professionals, we need to be engaging in coaching and mentoring ourselves, because a lot of this rescaling work is new territory. AHRI has a great mentoring programme for its members that I’d encourage you to check out. And I know for me when I first started as an HR manager, I joined that mentoring programme and mentored an HR grad who was working in Sydney and it was just such a good experience for both of us. So jump on, check it out. And also the AHRI LinkedIn Lounge is a great place to get a bit of a temperature check on what your HR peers are doing in this space. I want to ask you, because you’ve got this amazing case study with the Department of regional New South Wales so I think will really help people to get that understanding of what this could look like. And I think, for me, sometimes when I’ve thought of rescaling programmes, I’ve often imagined big enterprises, getting their people across all these emerging technologies. But I’d love to hear about a case study from the Department of Regional New South Wales, where you were working with them and their employees in sectors like agriculture and infrastructure. Can you tell us a bit about that process?
Rod Farmer: Yeah, absolutely. I’ll provide a bit of context first, and to all of my dear NSW friends, hopefully listening to this. Thank you for letting me speak on your behalf. So let’s just go back to COVID. Just a little bit. So if we think about what Dr. NSW was standing for, in terms of its sort of critical tenants, it was service simplification, innovation, and productivity through digital and AI, digital and automation. So simplification, innovation, productivity with digital, along comes COVID We changed the way they work, remote work, all of a sudden, we start to see capability gaps within the workforce, we start to see some real issues with digital literacy. And importantly we also start to see issues with digital inclusivity, which is what we don’t talk a lot about when we start thinking about remote and hybrid ways of working a real sense culturally of the haves and have nots, those able to participate in those who feel like they can’t really participate. So all of a sudden, we had this organisation that’s incredibly diverse and dispersed. And it is really important that we keep these jobs flourishing in regional and rural New South Wales, who are struggling to participate culturally and functionally. So that was the context. And so the department of regional New South Wales wanted to understand and appreciate it. We’re going to have to raise our capabilities, but how do we go about it? Do we go about creating these programmes and then mandating that people come into the programmes? Is that the way forward, but they recognise the people are so diverse that, well, if I mandated it, I’ve got so many different people, how do I mandate these different types of individuals to come in? So what we did is effectively, and I’ll go through the nature of the programme, but we went out and we started off by doing a human centred design evaluation of Dr. NSW. So a human centred design approach is where you take a very deeply empathetic approach, a very contextualised approach where you go out and you see how people do their work, who do they talk to, you listen to their pains, their fears, their problems, you have really long conversations, not in the lab, but actually out where they’re doing the job. And you see what really matters for them, and what you need to do to help them do their job. So that was a human centred design approach. So what we did is we went through, and we effectively created these personas across the organisation. groups of individuals had very similar traits, not just by where they work, whether it was the office around the field if they’re older or younger, but behaviorally, they behave in very similar ways. So we created all these personas that were defined behaviorally, rather than through classic criteria, such as age or location in the office was out in the wild. And those personas described the behaviours of the different people within the NSW and what they would need. And from that, we then went into those personas. And then we started to define the jobs to be done by those individuals to a relatively significant degree of specificity. And associated with that, what are the skills? And we build a whole skills framework? What are the skills families? What are the skills? What are the competencies or the level of proficiencies? And then we worked with managers and leaders, what do you need? What’s great gonna look like, Okay, where do they sit on that proficiency level? And we effectively my words, created a contract, your organisation needs this, your people need this is how they work. And here’s how they’re feeling. Here’s how they’re thinking, they can’t do something they’re not ready to do. We need to bridge the gap between where they are now, where you need them to be, as a manager and a leader, where do you need them to beat now and in the future? Therefore, what can you offer? And how are we going to make it clear on this ladder of how they step up? And that’s how we started off the programme. And to bring a little bit of colour to that. When we went out, we were asking people, Why aren’t you completing your timesheets? Why aren’t you saving your work back to the SharePoint file server, these are individuals who were actually walking around in many instances, for example, in the farmers with pencil and notebook in their in their back pocket, refusing to use their mobile phones, not really wanting to use their laptops, who what we didn’t understand previously had actually been taken to insights into the field and asking friends, to do all of the administrative work, do the timesheets for them write emails for them, they had been really smart in finding really creative ways to do their job effectively, and overcoming that digital literacy issue. And that’s what we uncovered. And when you play that back to the Department of regional New South Wales, saying, We’ve got people who actually haven’t sent an email in the last three months, this is what we’re talking about. They don’t know the systems. That was the real eye opening moment. And it explained a whole bunch of issues that they’ve had as well.
Shelley Johnson: It’s amazing to hear the level of detail that you went to to understand the challenges. I think, sometimes the risk when we’re trying to get to an outcome. So let’s say, we want to increase digital literacy, we move too quickly to do the course, let’s just get everyone to do the course or to take them, take them off, because we want to get to the outcome quickly. But I love what you’re saying right about the fact that you went and really understood the challenges, what are the unique things for each of those personas, each of those groups, what might be some of the things that are the roadblocks that they might have. And if we want to rescale the workforce, we need to understand those because those things are not going to change without us understanding them first, and then move forward before you get to designing the programme. Because I think the fun, like sexy part of HR sometimes is let’s design all the cool programmes. But if we haven’t understood the real pain points or problems, that programme very well may not land.
Rod Farmer: That’s exactly right. You said something just before about, you know, racing to an outcome. My question is always well, is the outcome completion or is it impact? And if it’s about impact, then it’s a very different set of questions you need to ask and understand in order to get to impact Completion can be enrollment, adherence, completion rates, time on task, all those classic things, which can get to a very high level of completion. But if those individuals don’t perform at a better level, if they might be more satisfied, if they don’t feel more supported, then they’re ultimately not going to perform. And if performance is the impact, if it’s the impact measure. That’s very, very different.
Shelley Johnson: Yeah, that is such a shift in your mindset to go from thinking about outcome to think about impact. So tell us about the programme. What did you do next?
Rod Farmer: So after we sort of stepped back and said, Okay, so what are the strategic goals of the organisation? And do we have a skills framework that we’ve built? How do we understand people? How do we understand skills? How do we measure skills like putting the framework, we then set out to develop, we did this to really build belief, right, and I’m a big believer in MVPs, minimum viable products do enough to build belief is we actually created an alpha beta programme, which is something that you do, typically in different areas of government as well. The first alpha, the smallest possible thing you can do to get a small cohort to test the materials, learn about the approach, learn about the efficacy before the end. So now let’s do the beta. Let’s do the first real one, before we scale. So we made a choice to look at a particular sort of cohort, and we structured that cohort, the different types of learners, very similar sort of behaviours, we’re looking for their ability to commit, again, we’re tailoring the training to the types of people not just having learned into, you have a great, here’s the course anyway, like really listening to those needs, and tailoring that training to cohort, and then putting them through that first four weeks of an effort for us all to learn. Now, as part of that, we hit the number one classic problem, which is that nobody subscribed. The question was, so do we mandate it? Do we reach out and tell the managers that they have to send people and we said, No, this, this has to be also a test of where this is attractive, and it’s seen as something that they want to do. So we went down a bit of this sort of behaviour design scarcity principle of, you know, this is a once in a lifetime opportunity. It’s a very small group of people 25 Only from all of the 5000 employees who are eligible who can attend. And we’d love for you to kind of wrap your head around, we got oversubscribed. And that was great. And that first four weeks was to learn all about the coaching, the peer base, the formal learning exactly at 70-20-10. And at the end of that, we learned a lot of things. Number one thing is by far and away, and it’s always the case, it’s always relearning the same Knowledge Nugget coaching. Coaching is the number one thing we had employees crying. This is the first time anybody’s ever spent this time with me, it’s the first time I ever felt like I was being listened to the fact that I could come together with other people and see that they weren’t learning, like I wasn’t learning. And if someone took the time just to talk me through and tell me that it was okay. Right, the fact that what I was being asked to do was at my level for what I needed to do didn’t make it feel as overwhelming. And we’ve got the beautiful videos of the process where by the end, if people are literally overwhelmed with emotion around how they felt supported for the very first time, by their organisation from a learning and development perspective. And that’s not to say that people didn’t have the intention, or the energy or the effort in the past to make them feel supported. But it’s just the shift that comes about through that coaching atmosphere. And so that then led into the beta programme, where we amplified that coaching. And so we brought a lot more sort face to face, one on ones, group based coaching, we brought back in the managers and the leaders into that coaching model. And then we went up to 75 learners in those cohorts. And we scaled that as well. Throughout this entire process, we put in place a whole new measurement, evaluation and recommendation system, how are we measuring their emotional readiness? How are we measuring the interaction with any of the digital platforms, measuring interactions with coaches 360 feedback with coaches? How are we measuring the actual skills, uplift, measuring when they do the skills activities is at the last minute at the start of the week, like generating all these behavioural analytics. So at the end of this, we could say, and these are the results right 100% of every learner who went through completed the programme 100% had a 20 to 40% uplift in skills, we had a 90% over the course of the programme 90% satisfaction rate 90% plus people saying that they improve their skills on the job self reported, right 75% increase in people saying that they would increase their tenure with their NSW said they would like to stay longer. And these are all self reported. But we also built an analytics engine where we could see where and the nice thing about what we built there is it could present us with behavioural cues. Did you know that group A is less engaged in Group B. And looking at this behaviour, we can sit there now more at risk of not completing the programme. And here’s some behavioural design recommendations for how to re-engage them at the coaching level. And we could see this in real time as an individual within group between group throughout the programme and report that to coaching and managers but also report that up to ch arrows at different levels. And this created an enormous amount of buying. And the last thing I’ll share about this again, coming back to coaching is when it started to scale. What we didn’t plan for but happened quite naturally is the people who had gone through those first alpha and beta course put their hand up to be the coaches for the next round. And then the organisation itself asked for the courses to be part of the onboarding process, which you had never imagined. We’d never thought about it as being mandatory onboarding. And so when you think about this thing, this supportive social on the job has led to greater cultural buy in huge emotional uptick, and organisational change, which doesn’t naturally come about when you go through self paced learning activities.
Shelley Johnson: Those results are amazing. I’m curious, and I might be getting too much in the detail here, but humour me for a second, indulge my curiosity. When you describe that learning programme, what did that actually look like from a day to day investment of that employee’s time? What were they doing? What were the practical things? You mentioned four weeks for the initial cohort? What does that four weeks involve?
Rod Farmer: So it was, you know, development of project briefs and daily missions. So breaking something that they want to learn down, it’s something very practical, that they can see they need to do in the job. So it’s that act or activity of performing something, that job which is actually underneath the surface tied to the proficiency we’re wanting to develop in the skill. So it’s more covert than overt. Then there were bi weekly sessions with the coaches, as well as the asynchronous connections with the coaches again, together in small groups twice a week, getting together one on ones to actually talk about the progress. So you know, you’ve got the on the job, project based mission driven, you’ve got manager touch points, every fortnight you’ve got the coaching twice a week, and the amount of formal assessment where we would open it up halfway through the week, not at the start of the week, some of these things can be a little self evident, depending on the cohort. So you don’t want them to race through on a Monday and sort of rush the analysis, we want the formal to be at the end. So we would have a baseline at the start, where people would self assess the skills and then do a few tests. So we could really gauge where they are. And then at the end, we would do that sort of 20 minutes of formal assessment purely to see how they’re performing, as well as to get some digital analytics at the back of that as well. So that’s really what it looked like on a week by week basis with a sort of a capstone sort of mini project at the end of the four weeks as well to sort of encapsulate everything that they’ve done. So if I step back from this, many people will be looking at this thing, it sounds a lot like ‘field and forum’. Well, it is – there’s a lot of elements of field and forum. But it’s also the project and mission driven aspect. It’s the social and coaching aspect of it, it’s making sure that the formal is just a touch point, not the actual objective, and that you’re doing things at regular increments, not just big bang. So we cared about the uplift throughout, and the behaviours throughout just as much as we did about the ultimate uptick in proficiencies. And I think sometimes we can get a little bit hung up on that, like the big answer that we get maybe at a yearly level. And what we really cared more about is this behaviour change how people learning to love learning
Shelley Johnson: That is such a good behavioural change learning to love learning. For those who don’t know the field and forum, can you just give us a little insight into what that refers to.
Rod Farmer: So field and forum quite simply is just where you’re doing activities out in the field. So it could be a little mini project, it could be a task supported by others, sometimes not supported by others. And forum is where you’re coming back into structured a bit more didactic activities where it could be a lecture, or 50 or 100 group of people coming back in for a workshop or some skills training a little bit more sort of classroom based. So filled in form refers to the combination of those two things.
Shelley Johnson: Alright, so we’ve touched on this idea of people investing in L&D, and that we need to say, increased investment in learning and development. The funny thing is often I hear this rhetoric in HR and in businesses that l&d is the first thing on the chopping block when it comes to budget in tough economic times. What can HR do to demonstrate a return on investment when it comes to these kinds of initiatives?
Rod Farmer: Start small, demonstrate impact and scale. So there is quite rightly, a push to L&D to look at how they’re trying to solve for the organisational needs. And that’s very true. So you’re trying to think about how you’re scaling from the get go. I think you need to demonstrate impact, you need to shift the culture and learning. So you need to turn up the dial on advocacy. And the way to do that is to start small, you know, be very clear on the outcomes you’re achieving, why it’s working whites special, have those people celebrate and radiate. They’re sort of learning outcomes and learning activities. And what that will do is build belief that these new ways of working things that you’re doing are worth further investing in. And it might need some extra people it might need to it might avoid the cost cutting might actually increase the spend in l&d, but then becomes the challenge of now how do I effectively scale when I go from company to company talking to them about upskilling rescaling and they talk about l&d Cost cutting, and their very real concerns. Are you able to equate the learning outcomes to commercial performance and organisational benefits, are you able to actually demonstrate the shift that’s held on culture? Do you actually know what set of skills is required? And how do you actually build a programme to achieve very specific impact metrics? The answer typically comes back as No. And so my provocation, and it is a provocation is, if you can’t track it, if you can’t measure it, if you can’t link it to benefits. If you can’t, if you don’t have any radiation of the success, if you can’t show how you’re going to be able to scale it up systematically, what suggests to you that you are warranting additional funding or to safeguard your existing funding. So why don’t we change that? Why don’t we sit back and go a little bit smaller and say, you know, what’s driving success? You are building advocacy, you can link it to value and if we think if we go through some basic sort of upskilling, rescaling frameworks, I won’t go into them in detail, but from, you know, very basic learning, acquisition, to behaviour change to organisational change, whether it’s a three or five stay model, right? If you can get to that difference of here’s a specific change results have seen that the learner level not just acquisition, but behavioural change. And here’s the organisational impact of that last part: by locking that in, you’re in a much better position to say, and here’s how we’re helping on that strategic mission. And here’s why the funding is required and here’s the return on investment. So, example Darren, SW Darren SW. So for organisations, as you heard before that significantly invest in upscaling rescaling, it’s a 2x improvement on retention. Okay, let’s say we only improve by two to 3%. If DNS W improved, which they did their retention rates by just two to 3%, not to x just to 3% they would save with a 30% margin, more from upscaling and risk of implementing and upscaling rescaling, then dealing with churn. So put in other words the cost of churn productivity issues. So losing the employee rehiring employee recruitment costs, you know, projects coming to a halt cultural issues, the cost of losing employees, was far greater than implementing the upscaling and rescaling programme, still with a 30% margin on top, right. But you have to be able to demonstrate the benefits first. So you can equate the benefits, you can come back to the math and say it’s mission critical. It’s not a nice to have, it’s fundamental to driving the triple dividend, social benefits, cost efficiencies and growth,
Shelley Johnson: Hearing you unpack the commercial benefits. I think one of the challenges I found early in my HR career was being able to speak that language of showing the commercial impact of some of these people, programmes and learning programmes that I would see as mission critical, because there’s always thinking about employee experience, always thinking about employee retention. But we need to, for HR listeners, we need to be able to speak to the financial benefits to the commercial benefits, and speak really clearly just as you did. Now, one of the things I’ve found is that if we’re in a small organisation, where maybe we don’t have as much access to some of the data analytics that we’d love to have simple calculations on, why are people leaving? What are they saying in the exit interview? What are they telling us about career progression? And we get a picture of well, most or half of our people have left because there’s not enough progression or sense of learning and growth. Okay, well, what does that cost us? Well, on average, it costs six months of their salary. Well, what does that mean? Well, if we’ve lost 20 people, all of a sudden, we have a number of how much that cost us. And it’s a lot of money. For a small organisation. I think being able to articulate the return on investment in real terms and hard costs is so important, but maybe something that we miss. So understanding how we can interpret and use the data will be a critical skill for HR going forward. And AHRI has an awesome short course that’s designed to help you learn how to mine that data, which I’ll pop in the show notes, because this is a crucial skill for us to get right.
Rod Farmer: It’s a very rare day when I talked to an organisation who is trying to not having solved but trying to solve that linked to value. Right, so exactly what he said. So the better that you can track, monitor and report the benefits, where those benefits can be equated back to commercial outcomes, because ultimately, you’re asking for money. So how you save money or generate money is critical to scaling any sort of upscaling and rescaling programme.
Shelley Johnson: I can just say, the Excel gurus who are listening right now I think I’m gonna create an amazing spreadsheet that’s going to calculate the churn rate, and for us to be able to go cool now we just need to put that into a really solid business case, take it to our CEO, and get this learning and development initiative across the line. I’ve got a couple more questions for you. I was talking to an HR manager the other day, and they’ve put a freeze on learning spend in that particular organisation. There have obviously been some difficult things that have happened for them in their financial performance. And one of the challenges they mentioned was, how do I keep a focus on learning when I have no budget? Are there any kind of strategies you would recommend to that person listening for how they can creatively solve that challenge without having that budget set aside for it?
Rod Farmer: The question in my mind has two parts: are you trying to accelerate learning in something that’s already core to your business? In which case, do you really need external solutions, content providers, dedicated separate activities? Or can this be set up in a way in which people are already doing their job? Or separately, are we actually trying to bring in new skills to the organisation and fundamentally close a big skills gap, which can’t be done by role modelling and apprenticeship, and structured on the job learning. And that occasionally happens, and you often see that as part of major transformations, right? On the latter one, that’s a really hard problem. It’s a perennial, very hard thing. On the first one, I’ll call that agile transformations is a great one, they’ve really big, complex things that can take place, people are shifting their operating model, they’re shifting the job titles, they’re going from job descriptions to contribution models, in terms of how they’re being thought about and evaluated and how they progress within an organisation. But the way in which most of the Agile skills, the core agile skills, the mindsets, the ceremonies, the fundamentals of how they plan, the work, how that actually gets done, is on the job, led by a couple of core leaders who do have some upskilling, who role model who put that into place, and who really implement those ceremonies themselves and ask others to follow them. And they get quite rigorous, and ensure those ceremonies are followed by role modelling, not by mandating. And again, Agile transformations are great, because if you did upskilling for a bank, you’re 30 to 50,000 people going through an Agile transformation, if you wanted to form upskilling, rescaling for those individuals would be hugely costly. But actually, most of those agile skills are born out through the day to day interactions on the job with micro shifts in what they’re doing. But it does take a leader to implement role models for those small changes. So teaching from within not from without.
Shelley Johnson: On the leadership piece, is there anything that you feel is crucial for leaders in helping their teams learn?
Rod Farmer: Motivation and buy in. Like, is this yet another thing to do at your day job? Right? And is this something that you’ve been asked to do by actually uplifting the skills of your team effectively, enabling you to do your job and your organisation’s job tenfold better. And I said this earlier, and it’s a flippant comment in many, many regards, or could be taken as common to actually believe it is organisational performance requires individual growth, you cannot significantly shift an organisation’s performance by wheeling it, you cannot shift it by talking about people development. It takes real investment at the individual level, to see them improve their performance in very specific ways that are meaningful, if a leader is being tasked with achieving an outcome. And they said that their people are critical to achieving that outcome, then you’re far more likely to get cut through if the leader or manager sees this as an organisational criteria, or a particular OKR that’s been set outside of any context. It’s unlikely to succeed.
Shelley Johnson: I love that point, Ron, and it’s such a beautiful place to kind of learn this conversation that if you want your business or organisation to grow, your people have to grow. It’s so simple that I often think about leadership and think of our leaders, growth has to outpace the growth that we want to see in the organisation. Because if we want to have this organisation that is not going to be susceptible to disruption that is able to change with these emergent technologies and respond to things that are happening in really complex situations in our environment. We need people in the business who are intrinsically motivated to grow. And I think that can be a big leadership challenge, but something that a lot of people will rise to, and then they can build that desire within their own teams to step into that growth zone.
Rod Farmer: Completely agree.
Shelley Johnson: I’ve got a final question to wrap this up at the end of each episode. We like our guests to respond. Have a made up scenario that could be playing out somewhere in Australia right now. So here’s yours, right? You work in HR for an organisation that has a skills shortage issue. And you’ve been put in charge of coming up with a solution. The CEO has invested in an internal learning platform, but the engagement uptake is really low. The CEO suggests mandating training sessions. But you know, from employee sentiment surveys that people don’t find the training helpful. What do you do next?
Rod Farmer: The number one issue that I have with the scenario that I’ve just heard is the CEO invested in the platform, which is what the CEO was asked to do. But investing in a platform is not investing in your people. So ultimately, we’ve thought about a tool before the outcome or the impact, we talked before about impact. So there’s naturally going to be a situation where people don’t like it, they’re not using it, why do I invest in the platform? Right, rather than there’s a different question, which is what I want for my people, why aren’t they engaging with that? Right? So that’s the first kind of shift I would make. Because the first thing that I would turn around is I would go, what is it that we’re asking them to do? I put a different programme in place? What is it that our employees need? Not just need, from a functional perspective, a skills perspective, but from an almost like a self actualisation perspective, and emotional perspective? What do they need job security, ability to promote, reward and recognition, potentially salary advancement? Like, what do they need, then I would develop a programme that actually looks to tackle those needs against the organisational needs, let’s step back not solve, you know, boil the ocean, what are a couple of the key pillars that we really need to make movement on as soon as possible. And it’s always good to have a burning platform. I always think with organisations where something’s gone wrong, there has to be something that’s visible, it’s near term, it’s tangible, where you can show the results quickly. And that’s something that the CEO cares about. So I’d find one of those things. And I’d marry that with what our people actually need. And I build a programme, specifically designed to get the outcomes against those goals, where the people feel very supported and advocate for the outcome of that. And I would shift the dialogue towards impact and outcome. And then I’d be moving forward with not talking about tools and platforms, talk about people outcomes and advancement. And so I changed the dialogue. Any longer answer than that, I’m going to probably outline like a two three year programme for you. But that would be the first thing that I would do. Because I walk into organisations all the time, who say, Well, we invested in these platforms over the last three years, and nobody uses them. Right? It’s because you thought the tool was the answer. The tool is not the answer. Not the people are the answer. And you got to start with them.
Shelley Johnson: What a way to close this conversation. Rod, thank you so much for being part of this discussion. I feel like I’ve got so many things that I can take away and implement tomorrow. So thank you very much.
Rod Farmer: You’re very very welcome.
Shelley Johnson: I hope you’re feeling really inspired after hearing from Rod and I know you’re gonna have a lot of practical strategies to take away when it comes to learning and development. For me, there’s three big takeaways: the first is moving from a job based to a skills based economy, then being able to use data to influence decision makers to get buy-in for learning and development. And number three, the importance of coaching and apprenticeship when it comes to learning and development.
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