Certification Drives Performance -Based Learning

August 14, 2006 The eLearning Guild’s SM Practical Applications of Technology for Learning THIS WEEK: Management Strategies Sales training is one of the most Certification Drives Performance-based Learning By John Zonneveld n industries requiring extensive knowledge to effectively sell and service a product, business success depends greatly on the sales and distribution channel. Sales personnel must be familiar with many different offerings. Service technicians for an automotive dealership must be familiar with complex assemblies, subassemblies, and electronic systems, as well as the equipment and systems used to diagnose and service the vehicle. Software VARs (Value Added Resellers) must be able to troubleshoot a product that can be as complex as an automobile but composed of bits and bytes. Regardless of the industry, high-performing channel partners must have access to the knowledge they need to satisfy customers, including: • Best practices in managing and operating a business in the enterprise’s market • Expertise in delivering customer service that maximizes customer satisfaction and retention • Selling points and product features that will interest customers, increasing likelihood of a sale • Compliance issues, both regulatory (e.g., Sarbanes-Oxley) and mandated by critical and demanding applications for e-Learning. This is even truer when a company’s success rides on the performance of the sales teams in its channel part- I ners. You can enhance success with a carefully crafted certification program within a strategic framework supporting knowledge transfer, through both formal and informal learning. Read this week’s article for an in-depth understanding of the channel sales training challenge, and how e-Learning and Learning Management Systems play key roles in meeting it. A publication of LEARNING SOLUTIONS | August 14, 2006 2 Management Strategies the enterprise (e.g., branding rules) In both the automotive and software industries, and other markets with knowledge-intensive products and services, the sales channel operates in the extended enterprise outside the company’s four walls. Insurance and real estate agents are independent brokers. Automotive dealerships are franchises. Software VARs are independent businesses reselling another company’s product. Since the enterprise does not own its independent sales channel, it often lacks direct visibility into the day-to-day activities of the channel partner, and cannot apply the same management controls used to improve the performance of corporate operations. In a large community of partners, performance programs set standards to ensure that each channel partner delivers the same high level of service as another. How does State Farm Insurance, General Motors Corporation, or Microsoft Corporation structure a program that increases performance with its channel partners? tralized infrastructure has been to build a field organization. Corporate teams work directly with channel partners. Depending on the size of the extended enterprise, the field organization may consist of a handful of teams or reps, or the organization structure may be a hierarchy of district and regional managers overseeing groups of channel partners. Geographic area, specific job functions, or both may define the hierarchy. (For example, a team assigned to all the service technicians in a particular regional area.) The field organization should provide visibility into channel partners and be positioned to address the challenges of each partner. However, in practice the field organization is not always equipped with the infrastructure and processes it needs to deliver. Delivering training is only half the battle. To maximize the success of a channel certification program, the supporting processes and systems must identify success measures and continuously improve the program. The partner channel as musical composition Latitude (my company) has used the metaphor of partner channel optimization as a musical composition to understand channel performance. A composer arranges different notes to create a composition that results in a musical performance achieving a desired quality. An extended enterprise wants to coordinate The traditional approach One common approach used by companies that sell a knowledge-intensive product through a decen- Publisher David Holcombe Editorial Director Heidi Fisk Editor Bill Brandon Copy Editor Charles Holcombe Design Director Nancy Marland Wolinski The eLearning Guild™ Advisory Board Ruth Clark, Lance Dublin, Conrad Gottfredson, Bill Horton, Bob Mosher, Eric Parks, Brenda Pfaus, Marc Rosenberg, Allison Rossett Copyright 2002 to 2006. Learning Solutions e-Magazine™ (formerly The eLearning Developers’ Journal™). Compilation copyright by The eLearning Guild. All rights reserved. Please contact The eLearning Guild for reprint permission. Learning Solutions e-Magazine™ is published weekly for members of The eLearning Guild, 525 College Avenue, Suite 215, Santa Rosa, CA 95404. Phone: +1.707.566.8990. www.eLearningGuild.com Learning Solutions e-Magazine™ is designed to serve as a catalyst for innovation and as a vehicle for the dissemination of new and practical strategies, techniques, and best practices for e-Learning design, development and management professionals. It is not intended to be THE definitive authority... rather, it is intended to be a medium through which e-Learning professionals can share their knowledge, expertise, and experience. As in any profession, there are many different ways to accomplish a specific objective. Learning Solutions will share many different perspectives and does not position any one as “the right way,” but rather we position each article as “one of the right ways” for accomplishing an objective. We assume that readers will evaluate the merits of each article and use the ideas they contain in a manner appropriate for their specific situation. The articles in Learning Solutions are all written by people who are actively engaged in this profession — not by journalists or freelance writers. Submissions are always welcome, as are suggestions for future topics. To learn more about how to submit articles and/or ideas, please visit our Web site at www.eLearningGuild.com. LEARNING SOLUTIONS | August 14, 2006 3 Management Strategies different dealers to create a dealer channel that meets strategic performance objectives. Composers can achieve their desired quality because they understand music theory, which provides a structure to analyze, understand, compose, and perform music with predictable, consistent results. The theory works because it embodies scientific theories of sound and physics that explain the interdependencies between different waveforms. Those in charge of channel operations do not have a channel optimization theory because they do not know all the interdependencies of all the relevant variables in the life of a channel partner. What the extended enterprise needs is a good theory that provides a structure to analyze, understand, control, and optimize partner channels. A field organization does not provide this structure. Just as some dealers operating independently may perform better than others, some branches of the field organization may achieve better performance improvement than others. A theory of the channel would identify the critical variables in all areas of interest, and how those variables affect business goals. The extended enterprise must coordinate efforts throughout a field organization or directly with the partner channel. Often, effort is uncoordinated. Without a channel theory, the extended enterprise is playing random notes instead of a song. Performance at some dealers may sound OK, but without a theory there is still a lot of noise in the channel, and strategic objectives are not being met. The channel optimization framework Latitude Consulting Group developed a strategic framework based on the key findings of the study. Knowledge transfer — both formal (if certified) and informal (peer-to-peer learning) can play a strategic role in channel performance, and with statistical methods it might be possible to develop the beginnings of a theory of dealership. The framework integrates five key areas of dealer channel optimization with knowledge transfer as the foundation: • Channel performance objectives focus on clearly defined, consistent results. • Causal network provides a basis for understanding what factors have the greatest impact on performance. • Balanced scorecard, where metrics correlate to performance, tracks progress against objectives and provides a single point-of-truth for the enterprise and all its partners. • Channel portal with single sign-on and common processes and data increases operational efficiency and visibility. • Knowledge transfer through an extended, enterprisewide learning and certification system ensures that channel partners can easily acquire the understanding and information they need to meet objectives. The framework (see Figure 1, below) provides a modular approach that helps identify where making selective information technology investments will yield the greatest benefit to the extended enterprise and its channel operations. Latitude developed the framework to address the challenges of the extended enterprise A channel theory would provide a structure to analyze performance and course completion data and understand how they affect each other. While a single organization is unlikely to develop a comprehensive channel theory any time soon, it can develop a model to understand its own channel. Figure 1 The channel optimization framework Results and insights from a dealership study One automotive dealership study contained a detailed analysis of an evaluation system used by an automotive manufacturer to measure dealer compliance to the manufacturer’s standards. Independent of the compliance scores, the study obtained eight dealer performance measures, including unit sales, part sales, market share for two different vehicles, and customer satisfaction with the sales, parts, and service departments. Out of more than 107 items used in the manufacturer’s dealer evaluation system, only 17 showed consistent relationships with business results. The relevant items fell into three categories: • Certified training (Non-certified training did not appear to affect dealership performance.) • Social capital (Participation in professional organizations) • Anticipatory behavior (For example, prior to arranging a service appointment for a customer, a service manager verifies that a required part is in stock, and orders it if it is not.) LEARNING SOLUTIONS | August 14, 2006 4 Management Strategies and to provide a roadmap to improve the performance of large, knowledge-intensive, partner channels. Local needs, standard platform In addition to core LMS functionality, an extended enterprise learning and certification system should provide a wide range of tools. The field organization and dealer managers must be able to use these tools successfully to manage learning in a way that meets the training needs of different audiences operating in all the markets of the extended enterprise’s channel. At the same time, they must meet those needs in alignment with the performance objectives of the entire channel. In a diverse channel, learning requirements vary according to the channel partner’s size or location (e.g., rural vs. urban). These types of variation are particularly true for a global channel. Increasingly distinct country variations require market-specific learning strategies and magnify the differences among channel partners, their customers, and the knowledge they must master. One sales training curriculum is appropriate for a more price-sensitive market, but another curriculum better fits brand-loyal markets. Financial, environmental, or health and safety compliance requirements may require different training in one country than another. When certification requirements are too generic, training content will also be too generic, or the content covers the specifics of all potential audiences. If the content is too generic, learners are inadequately trained to perform their job function to meet the specific needs of their customers. If the content contains ancillary information unrelated to their duties, learners must puzzle out what applies to their case and what does not. As a result, they will tune out or miss what is relevant, and even learn incorrect information in- In addition to core LMS functionality, an extended enterprise learning and certification system should provide a wide range of tools. The field organization and dealer managers must be able to use these tools and successfully manage learning in a way that meets the training needs of different audiences operating in all the markets of the extended enterprise’s channel. Figure 2 Certification, a strategic objective, improves channel performance Certification becomes a strategic objective To achieve consistent and predictable business results from a partner channel of geographically dispersed, independent entities with dissimilar business practices, certification must become a strategic objective. Top-down training, certification, and incentive programs support performance objectives. The performance objectives for the channel should be measurable (e.g., unit sales, revenue, profit margins, customer satisfaction index, or any other relevant measurement). (See Figure 2, below.) For example, if the enterprise believes that customer satisfaction must increase, the certification and incentives should support this objective. Certification might include a “Listening to the Customer” component for sales staff. Incentives for sales staff might support repeat customers, rather than unit sales. Administering such programs, however, can be time-consuming for both the enterprise and the channel partner. The enterprise must establish and maintain the certification requirements, communicate them to channel partners, measure program performance, and provide training content. The channel partners, in turn, must be able to identify and schedule training appropriately to meet the program requirements while not hindering day-to-day operations. Extended enterprise processes and knowledge transfer While the products in use today to manage performance programs vary widely, the technology that supports various types of programs is the same. From a technology perspective, regardless of whether you are implementing a certification track, a compliance program, a career development path, or a job skill or competency curriculum, the basic structure and algorithm to support these programs is identical. In a large geographic area consisting of many markets, a larger number of learning experiences (knowledge-intensive products and complex processes) and a larger number of dispersed learners and certification requirements dramatically increases the coordinating effort required to successfully sustain the channel certification program. To mitigate the administrative burden, the learning and certification processes and management system used for the extended enterprise should decentralize training responsibility within a topdown channel certification program. (See Figure 3 on page 5.) In addition, you can create seamless business processes to integrate the LMS and knowledge/ learning management with other channel partner operations. LEARNING SOLUTIONS | August 14, 2006 5 Management Strategies tended for another audience. Training that applies to individualized learning requirements will engage the learner. An extended enterprise learning and certification system can handle this challenge by providing flexibility in defining the structure of the channel, the roles of people within it and the training they must complete to meet certification requirements that have been tailored to their function in the channel, and how that function affects the strategic performance objectives. Driving performance from the bottom with a top-down approach Decentralizing training authority distributes the administrative burden throughout the extended enterprise, from high-level management to the field organization to channel partner owners and managers and even to channel partner staff. Under this model, the enterprise determines what training will support performance objectives for the channel and makes the training available. Channel partners are then responsible for taking the training. What happens when the channel partner staff does not work in an environment where it is easy to take training? Inflexible training delivery becomes challenging for workforces geographically dispersed throughout a channel. In general, training increases downtime and requires additional resources to cover their duties while in training. Even e-Learning can cause this disruption for lower level staff. Service technicians at an automotive dealership, for example, may not have access to their own PC throughout the workday. To make this decentralized model work, the extended enterprise must provide incentives that encourage channel partners to manage active work time with training time. Layering certifications in the extended enterprise hierarchy can encourage more training at lower levels. By making certification for managers require certain levels of certification of their direct reports, layered certification can encourage training at all channel levels. For example, a common performance measure in the automotive sector’s retail channel captures vehicle repairs by a dealership’s service department. This metric usually measures the efficiency in repairing customer vehicles by tracking the number of vehicles correctly repaired the first time. (Vehicle does not require multiple visits to dealership to correct the same problem.) If the metric is low across the entire dealer channel, an automotive OEM might take a corrective action by layering certification as follows: • To achieve a “Fixed-the-First-Time” certification, service technicians must complete coursework related to diagnosing and servicing vehicles and other best practices that affect the metric (e.g., anticipatory behavior). • To achieve a “Premier Service Department” certification, the service manager must have a certain number of service technicians who hold the ‘Fixed-theFirst-Time’ certification. This certification becomes an incentive by providing a marketing tool to the manager that can help generate more business. • To become a “Five Star” dealership, the dealership owner must have a “Premier Service Department” and meet other requirements, some certificationbased, others based on business results. • As an additional incentive, the automotive manufacturer can give bonuses to the field organization based on how many dealerships have attained “Five Star” status. In order for this layering to work effectively, the various levels of the extended enterprise must have access to a tool with real-time gap analysis capabilities for both managers and employees to track their progress towards various individual and organizational performance objectives. The managers and employees must be able to close the identified gaps as quickly as possible. In addition to providing an interface that would make it easier to identify the learning (service disciplines) needs of dealerships and the markets they belong to, an extended enterprise LMS also reduces the burden on both managers and dealership staff to schedule training. Needs or interest-list features, combined with auto-enrollment, provide a mechanism to automatically schedule individuals according to training needs, preferred training locations, or delivery methods. A manager who determines training needs can match whoever needs training with a list of the courses they need. Courses added to an interest list In addition to providing an interface that would make it easier to identify the learning (service disciplines) needs of dealerships and the markets they belong to, an extended enterprise LMS also reduces the burden on both managers and dealership staff to schedule training. Figure 3 The Learning Management System must support and coordinate the learning and certification processes in the extended enterprise — the framework foundation. LEARNING SOLUTIONS | August 14, 2006 6 Management Strategies can follow the requirements set forth in a predefined certification, or they can form unique learning objectives for each employee according to their needs. Interest-based registration saves time for both the training program administrators and the employees. If desired, managers can add their employees to interest lists once, on a quarterly, annual, or other routine basis (“set-and-forget”). Managers set training requirements, and then let the system manage schedules and enrollment. This type of arrangement not only provides set-and-forget planning to channel partner managers, but to district managers and field managers as well. For managers in the field organization, resource allocation and planning and budgeting can be made easier by reviewing submitted needs, forecasting demand for training content, and making arrangements to meet demand. Interest-based auto-enrollment capabilities also reduce the burden to the employee and manager by automatically alerting students by email upon their enrollment in a class. The employee no longer needs to determine their learning needs, locate the appropriate courses offerings, and then enroll in the class. Another level of automation would use job function, location, data feeds from other systems, and other factors to determine the timing and types of training needed, and automatically enroll the employee in relevant courses. An extended enterprise learning and certification system pushes a wide range of courses, aligned with performance objectives through certification requirements, and embedded in automated processes through a LMS, to all staff in relation to their job roles and learning needs. This push streamlines the coordinating effort of knowledge transfer and resource allocation across the channel and the field organization. Reducing this administrative effort ensures increased consistency of training outcomes. From a resource allocation perspective, staff can be transferable from one channel partner’s facility to another with the ability to locate the individuals who are qualified to perform various jobs in the channel. An extended enterprise LMS can provide this information by measuring individuals against predefined job descriptions, even if those requirements are not part of the candidates’ current jobs. Understanding and measuring success Delivering training is only half the battle. To maximize the success of a channel certification program, and to continuously improve the program, the supporting processes and systems must identify success measures. In a blended learning approach, online assessments are completed both prior to and after a course LEARNING SOLUTIONS | August 14, 2006 7 Management Strategies to determine whether the individual’s knowledge of that particular topic has improved. Online assessments can also occur on a routine basis to determine if an individual requires a refresher course to reinforce knowledge. You can evaluate competencies by including scenarios in which staff must respond to targeted questions. If employees are monitored through direct observation, an LMS could even be used to flag whether individuals are able or unable to demonstrate a competency and, regardless of their assessment scoring, enroll them in the corresponding training course if required. This use of behavioral and training data can serve to assess training efficacy, and determine if the competencies employees develop actually relate to completion of training courses. (Competencies may develop primarily from peer-to-peer knowledge transfer, for example.) The causal network However, these individual measures do not identify success from a channel optimization perspective. To measure success of a channel optimization, it is necessary to determine how certification impacted performance metrics. What technician skill levels increase customer satisfaction? Did sales training increase unit sales? Did soft-skills training increase anticipatory behavior? Returning to the musical composition metaphor, music theory provided the structure to understand what sound will result from a playing a particular single note, combination of notes, or sequence of notes. A channel theory would provide a structure to analyze performance and course completion data and understand how they affect each other. While a single organization is unlikely to develop a comprehensive channel theory any time soon, it can develop a model to understand its own channel. Structural equation models (SEMs) provide one method to develop such a model. (See Figure 4, at right.) Building a structural equation model involves measuring all the factors that might affect a performance metric and then bringing their joint effect together using advanced statistical methods. In Latitude’s channel optimization framework, this process corresponds to the definition of a causal network, essentially a statistical model that provides a structure to understand cause-and-effect relationships in a specific channel. The resulting model provides coefficients for each measured factor that describe how much the factor impacts the relevant performance metric. For example, in the previous layered certification example with the automotive service department, the channel’s causal network might show that a dealership attaining “Premier Service Department” status will increase its customer satisfaction index (CSI) by 150 percent. It might show that attaining “Five Star Dealership” increases unit sales by 120 percent. Conversely, it might show that “Premier Service Department” status had no effect, but a closer analysis revealed that having technicians trained in a “Listening to the Customer” sales course did increase the CSI. The “Premier Service Department” requirements would then change to include the sales course. By integrating data feeds from corporate and channel partner systems with an LMS’s course completion data, you can correlate certifications with performance metrics to evaluate success, and to continuously refine the causal network and certification programs. The channel scorecard A Web-based channel scorecard provides a single point-of-truth where both the channel partner and the enterprise obtain a valid picture of where the partner or a segment of partners stands regarding the key metrics. The scorecard becomes a tracking and reporting mechanism that guides all levels of the extended enterprise — individual, channel partner, field organization, and corporate. The interface design should group metrics into distinct categories and provide an easy-to-use “drill-down” capability that allows channel partners to identify areas requiring improvement or attention, and restricts access to sensitive data depending on the user’s access. A channel partner only has access to its data, but a field manager has access to multiple partners’ data, and corporate decision-makers can access reports for all partners, as well as aggregate reports. Ideally, the drill-down capability should provide a ...[C]ertification drives performance in a knowledge-intensive, difficult-to-manage channel, allowing the extended enterprise to achieve improved, consistent business results. Figure 4 The causal network and scorecard link the strategic certification objectives to the supporting processes in the extended enterprise. LEARNING SOLUTIONS | August 14, 2006 8 Management Strategies link between the channel’s certification structure and the performance the structure intends to optimize. A scorecard can create this link by referring channel partners and the field organization to actionable items that can improve performance. These actionable items include best practices and training to incorporate into certification requirements. From the service department example, the channel partner should be able to see that CSI is low, and drill down to see what metrics, such as Fixed-First-Time, contribute to CSI, and then drill down further to see what certifications will impact the metrics that influence CSI. DO YOU HAVE AN INTERESTING STRATEGY OR TECHNIQUE TO SHARE? Get It Published in... Conclusion Appearing in the scorecard where performance is tracked, defined in the causal network where performance is understood, and managed by a learning and certification system, certifications become containers for best practices and technical or business knowledge that drives performance. As a result, certification drives performance in a knowledge-intensive, difficultto-manage channel, allowing the extended enterprise to achieve improved, consistent business results. This publication is by the people, for the people. That means it’s written by YOU the readers and members of The eLearning Guild! We encourage you to submit articles for publication in Learning Solutions e-Magazine. Even if you have not been published before, we encourage you to submit a query if you have a great idea, technique, case study or practice to share with your peers in the e-Learning community. If your topic idea for an article is selected by the editors, you will be asked to submit a complete article on that topic. Don’t worry if you have limited experience writing for publication. Our team of editors will work with you to polish your article and get it ready for publication in Learning Solutions. By sharing your expertise with the readers of Learning Solutions, you not only add to the collective knowledge of the e-Learning community, you also gain the recognition of your peers in the industry and your organization. Author Contact John Zonneveld is a senior technical consultant with Latitude Consulting Group, Inc., an e-Business consultancy based in Saline, Michigan. John has over ten years of experience in corporate training and development and related functions. He has delivered comprehensive online solutions for clients in the automotive industry, financial services, and many other sectors. He applies his expertise in e-Learning strategies, learning management systems, certification, compliance, and automotive retail business processes to Latitude’s applications and services. Contact John at john.zonneveld@latitudecg.com. Additional information on the topics covered in this article is also listed in the Guild Resource Directory. How to Submit a Query If you have an idea for an article, send a plain-text email to our editor, Bill Brandon, at bbrandon@eLearningGuild.com, with the following information in the body of the email: • A draft of the first paragraph, written to grab the reader’s attention and identify the problem or issue that will be addressed. • A short outline of your main points addressing the problem or resolving the issue. 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