Strategic Training
Paula Martin
(For World Finance Magazine – June/July Issue)
Strategic training. What does that mean? Is training needed to execute strategy? Is training part of strategy? Let’s answer these questions by first examining the process of developing strategy.
If you take into account the value of the executive team’s time, developing a strategic plan is an expensive endeavor. But, it’s even more costly if that plan is not executed, and the fact is that most plans are not. With so much at stake, why aren’t most plans implemented? Two reasons: either the plan is not executable or the organization lacks the capability to do so.
If a strategic plan is not executable that means it can’t be accomplished in the timeframe allotted, with the people and money that are available. To determine if a strategic plan is executable it has to be validated. Do we have the people? Is there enough time to accomplish these goals? What will it cost?
You also need capability to execute a plan - both individual and organizational capability. We live in a rapidly changing world and therefore the capability required for tomorrow’s work is not the same capability required for today’s. Individual capability is addressed by the question, “Do the individuals who must implement the plan have the capabilities required to do so?” If the answer is no, then you have three options: 1) revise the plan, 2) de-hire the people who don’t have the capabilities and hire people who do, or 3) train people so they can perform at the new level required by the plan. Hiring new people is almost always more expensive than training existing people, so option two is the least attractive. If training people cannot be done in the timeframe of the plan or if the costs exceed the benefits to be derived, then option 1, revise the plan, is the best choice. Otherwise, you’re left with option three – train people strategically, to improve their capabilities so they can implement the strategic plan.
The other capability you need is organizational and organizational capability is a combination of systems, procedures, know-how and skills required to get something done on an enterprise-wide basis. One example of an organizational capability is the ability to create, make and sell products and services to customers for a profit which most organizations have some capability to do. Another example of an organizational capability is the capability to execute the strategic plan, which most organizations lack.
The organizational capability to execute a strategic plan requires having a high performing project system in place. This system starts with the decomposition of the strategic plan into goals, sub goals and finally into projects with executable deliverables. These projects comprise the project portfolio – the portfolio of projects that represents the organization’s investment in the future – the sum of which, if executed appropriately, will allow the organization to achieve its strategic plan.
In order to effectively execute the portfolio of projects, the organization needs the capability to do so. The question you must ask is, “How capable is your project system? Can you predictably execute all of the projects in the portfolio? Effectively? Efficiently?” If your system isn’t capable, then it needs to be upgraded and just as with any other new capability that you want to roll out on an enterprise-level, building that capability requires training - strategic training - training to build organizational capability. In the case of the project system this includes training in a methodology, training in project leadership, training in project sponsorship and training in portfolio management.
If your strategy requires new organizational capability, that is when training becomes strategic. This was the approach GE used when it decided it needed the organizational capability to significantly improve the performance of its business processes. In order to create that capability, they had to train people at all levels in the organization. This is strategic training.
Training is strategic when it’s part of the strategic plan, when the capability to be developed is required for the organization to move forward. Training is not strategic when people just sign up ad hoc for training classes.
Yes, strategic training costs money, but what does it cost not to execute your strategic plan? To stay stuck at the same level of capability that you were at last year? And the year before that? How does that position you competitively? Training, done strategically, is an investment in the future. And the first investment in training you should consider is in creating the capability to execute your strategy effectively and efficiently!