Building Strategic Weaponry for Competitive Competence

Introduction

The current speed of change requires employees to be trained continuously to out-think and out-manoeuvre competitors.

Customisation is key - this article explains how to tailor programmes to maximise synergies between company strategic objectives, individual needs and lifelong learning.

Identify areas to be addressed

A previous article, “Targeting Training for Strategic Success” identified tools for determining the skills gaps of each individual within the organisation, both in terms of the company’s current needs and future strategy.

Having applied these tools, the company will have a strategic overview of what must be trained, at what level and to how many people at each level.

Structure content and strategies for training programmes

Diversity of approach and company structures mean  that there is no “one size fits all”: every company must align training to its own bottom-line objectives.

To achieve this, the company will need to create a matrix in which the identified skills gaps are grouped into areas of similarity at different levels.

Such a matrix will look something like this:

	Technical	Company Systems	Strategy / Management / Supervisory	Soft Skills
General Management
Supervisory
Operator
General Worker

Identify the specific objectives of each training unit 
By populating this matrix we have a strategic overview of the competency requirements of our organisation. It also represents a lifelong learning path for each employee.

The skills gaps which have been identified in each of the matrix cells need to be fleshed out so that each defines what the person who has been trained in that area will be able to do. 

For example, if we have identified “manage inventory” as a skills gap at operator level, we might, after consultation with those involved in the function, decide that a person who has been trained in this function will be able to:

• Explain the principles of freight logistics 
• Receive, dispatch and return freight
• Control and locate stock
• Locate freight in a warehouse
• Pack, handle and secure freight 

Million dollar question- insource or outsource?

Now the burning question: which of these competencies should be trained on an in house basis and which should we outsource to external providers?

According to the supplychainforesight 2014 report “With the education system of South Africa under increasing scrutiny, there is a clear gap between relevant qualifications and skills that are marketable in the workplace.” This is a clear indication that, at least in the field of supply chain management, the bias should be towards insourcing. This, by the way, is not a uniquely South African phenomenon.

Other considerations are:

• What do we have the ability to execute in-house, and what can’t we perform internally with quality and consistency?
• Which of the competencies we have identified give us our competitive edge, which of them give us our unique character in the marketplace?
• Consider outsourcing those generic “soft skills”  (communications, time management, leadership development, decision-making, and problem-solving), as well as environmental and health-safety issues. Keep in mind that if we were to keep training entirely in-house, the only resources we’d have are the skill sets that exist in our current staff.
• To what extent can we insource training without compromising the operational requirements of those Subject Matter Experts who will be required to do facilitate training? Put another way, how do we manage the risk of loss of focus on our core business, if we implement in house training programmes?

Moving target

Nothing stays the same. Both the competency matrix of the company should be subject to annual review as an absolute minimum.

Targeting Training for Strategic Success

Introduction

Training is a key weapon to manage change in the battle for increased competiveness in a rapidly evolving environment.

This article offers important tools to optimise training investment by accurately determining the organisation’s competency needs. 

Competency as key to competitiveness

The business of implementing efficient and effective supply chains is transforming at light speed. This presents new opportunities for greater cost reductions and market growth.

Training is an essential but expensive tool in building and maintaining competitiveness.

To make this investment effective we must be able to target training for maximum impact.

The first step is to accurately determine the organisation’s competency needs, where competency is defined as a combination of knowledge, skills and attitude.

How to do this without the need for sophisticated software or specialised knowledge?

This particular elephant is best tackled in meal sized chunks:

Business strategy

Consider these trends:

Consumers

More than ever before, consumer is king and the pace of change in consumer demands is accelerating. The agility to adapt to these radical and rapid changes is what makes a winning organisation.

Technology

The ability to identify and embrace new technologies which will strengthen the organisation’s ability to determine changing market needs and adapt to them is a vital competitive weapon.

One world  

Whilst “multinational” denoted a corporation with turnover in the billions and workforce in the hundreds of thousands, this is no longer so: the tools are there for even the smallest to diversify into global markets and this versatility is crucial to all.

Today’s business strategies focus on how to meet rapidly changing consumer needs by harnessing best in class technology for enhanced competiveness over an expanding global footprint.

It is essential that such a strategy also defines the competencies required to achieve the objectives. It should answer the question “Which are the competencies which, if we don’t have them, will prevent us from achieving our strategic objectives?”

Skills profiles

The strategy describes the future state of the company- by analysing the current skills profile of each function within the company we determine:

• How the current functions need to be adapted to achieve the strategic objectives
• To what extent the identified competencies are applied in the current functions, and at what level. For example, the competencies, Distribution, Warehousing and Logistics are practiced at many different levels
• Which of the identified competencies will need to be acquired/ enhanced in the adapted structure.

Whilst there is no rocket technology in carrying out this exploration, it will take time and the commitment of Line Managers. Best to see that they are compensated/ recognised.

Individual Assessment

A critical step in the process is to determine the extent to which each individual within the organisation possesses the required competencies to:

• Carry out their current function
• Function successfully in the future organisation.

To determine these gaps requires that those within the organisation (and possibly outsiders) who already have these competencies to write assessments which determine the knowledge and skills areas required by each function.

This may be unfamiliar territory but it has been done in many organisations.

The results of these assessments will identify the company’s unique skills gaps and give clear direction as to where training resources need to be allocated.

The bottom line benefits

• Ensures learning is directly aligned to organisational strategy
• Directs resources to areas of greatest demand effectively and efficiently
• Identifies the "gap" between required and current performance
• Enables the organisation to tailor training to meet current and future requirements
• Provides a platform to enable an organisation’s sustainable competitive advantage based on employees’ ability to learn and adapt to change.

Would this strategy work in your company?

How could you adapt it to better serve your needs?

Is this an area which receives enough attention?

Are there better ways of determining the competency needs of an organisation?

Please share your thoughts.

Puhleeeeze – cut the jargon and do some training!!

This article is intended to give the line manager or small business owner a user friendly, jargon free guide to the identification of training needs and the steps necessary to implement training which focuses on solving specific business problems.  

Let’s cut the jargon – give us some training!!

At a recent industry business convention the guys responsible for the education and training slot were given a prize for having the most jargon in their presentations. Over the years this is an area in which a unique language has developed which is largely incomprehensible to those outside of it.

Be that as it may, as normal business people we need to ensure that our people are in possession of the skills, knowledge and, hopefully, attitudes necessary to function productively. As normal business people we are also concerned about the rapid pace of development which seems to characterise most businesses, meaning that we need to be training all the time if we are to remain competitive. 

Whilst this may be all well and good at a strategic corporate level, how can I, as either a line manager or small business owner, cut through all this jargon and address the skills needs of my unit or my business?

To be focused and effective, training needs to change behavior. Training must be targeted at areas of the individual’s function so as to remove constraints to performance, to improve productivity and/ or to give the individual additional/ different skills to accommodate change. 
Training is all about changing behavior: many of the problems we encounter in the functions we manage revolve around a lack of skills. 

The process which we need to adopt in solving these problems looks like this:

Analyse

A performance problem needs to be objectively analysed to find its real cause or causes. This phase is essential in gaining an understanding of the problem and determining the scope of the project before attempting to solve it.

Skipping this step by simply implementing an off the shelf training programme which seems to fit the requirement generally results in junk-training, which is just like junk-food - it provides no nutritional value and too much of it is harmful 

This phase is best accomplished by a team comprised of those who are effected by the problem and those who will need to develop the necessary training programme. It may well involve observation of the actual function(s) being carried out.  

At the end of the analysis phase the behavior changes required should have been defined as measurable performance goals, e.g. “Individuals will be able to produce error free invoices within defined timelines”, “Individuals will be able to produce defect free XYZ model  components at a rate of NN per hour”. 

Well thought out, measurable goals ensure that the training will have a positive impact upon the problem.

Design

Designing training is like building a sandwich: the top slice of bread is the defined training objectives, the bottom is the tools which are used to assess whether those who have been trained can carry out the defined training objectives.

In between is what will be used to bring about the required changes in behavior – can be contact training, group case studies, demonstrations, video clips, interviews or maybe even reference material to be studied. Given the richness of resources out there, it is strongly suggested that reference material should be but one of them. 

Depending on the number of objectives and the complexity of the subject, this content needs to be interspersed with exercises which are used to determine individual progress and to give encouragement and feedback.  

Who should be involved in this phase? Three types of people: those who established the objectives (and who are feeling the pain of the problem), those who will be doing the training and those who will develop the course. The first two types should come from within so that the training can be relevant to the situation. The third type may come from outside but this need not necessarily be the case. 

At this stage we need to identify our sandwich components: putting it all together comes next.

Develop

By the end of this phase we will have the following:
• The training objectives: what problems is the training intended to solve? What must individuals who undergo this training be able to do on successful completion?
• The training plan: who is going to do what, where are they going to do it and how long will each step in the process take so that training objectives are achieved?
• The information resources which will be used to convey the knowledge required.
• The assessment tools which will be used to determine progress and finally whether each individual has achieved the training objectives. 
The development of these products requires input from subject matter experts as well as those who are qualified to develop training interventions. 

Implement

Now is the time to get the bang from the buck. 
All the preparation carried out so far leads up to this stage: provided the previous steps have been followed meticulously then we have a training product fit for purpose.
Successful implementation of a training course revolves around the following factors:  
• The professionalism of the arrangements – scheduling, venues internet access and other facilities as required. This is all to do with making participants not only comfortable but also eager
• The enthusiasm and preparedness of course facilitators – self-evident, really
• The way in which the course is administered and any problems dealt with

Evaluate

Conventional wisdom says that a smiley face form at the end is course evaluation. Not so if we are going realize a full return on our investment.

Consider this 1:

Level 1: Reaction
How individuals reacted to the training. 
How well the training was received: helps improvement of future training, including important elements to be added to the training.

Level 2: Learning
What individuals have learned. To what extent have the learning objectives been achieved as a result of the training? 

Level 3: Behaviour (application)
Extent to which individuals apply the concepts, processes and procedures which were taught. Are the newly acquired competencies being used in the occupational environment of the learner?

Level 4: Results
The results of the training in terms of business metrics, for example -increased production, improved quality, decreased costs, reduced accidents, increased sales, higher profits or enhanced return on investment.

1. Source: http://www.kirkpatrickpartners.com/OurPhilosophy/tabid/66
If this is how training should be carried out, then two major questions arise (hopefully readers will have some of their own):

Q 1: What about all those courses to which we have been subjecting our people over all these years? 

So why wouldn’t we want to slash our tax liability and increase business?

In an uncertain environment then are some certainties on which South African businesses can base their strategies 

ANC Government and its transformation agenda will be around for a considerable  time;
Constant pressure to reduced permanent employees;
 Limitless pool of potential young talent.

How to use this to substantially reduce our tax liability and open the doors to more business?

Government aims to achieve industry transformation through the Broad- Based Black Economic Empowerment (B- BBEE) scorecard. Businesses relying on Government or State Owned Enterprises (SOE) are required to maintain their B-BBEE scorecard Contributor status Level: companies whose goods or services are purchased from companies engaged in Government or SOE work also need to have favourable B- BBEE scorecards.

The easiest area on the B- BBEE scorecard in which to achieve maximum points is that of training:  this is also where the potential to minimise both tax liability and permanent headcount lies.

A scheme known as Learnerships was introduced to address the gap between unemployed youth (who lack the skills and experience needed for employment) and business (whose growth is severely hampered by a lack of skilled and experienced people). A Learnership is a fixed term employment contract in which an employer agrees to give an individual training and experience over a defined period (usually a year, could be more).

Let’s consider a case study:

Our company employs 155 people whom we paid a total of R 9 300 000 last year. In that same period we achieved a pre-tax profit of R15 million. 

How can we use Learnerships to achieve maximum B-BBEE scorecard points AND minimise tax liability?

For the maximum B-BBEE scorecard points available in the training pillar we need to engage learners in accordance with the following profile:

Number of learners: 5% of the permanent headcount of 155 =  8 Learners

These must all be Black, 50% of them need to be women and 50% of those women need to be disabled.

So:

8 learners, 4 of whom need to be women, 2 of whom need to be disabled.

Provided that the Learnership expenditure on the above  group meets or exceeds 3% of our payroll, we achieve the maximum 20 B-BBEE scorecard points available in the training pillar.

3% of R 9 300 000 = R 279 000

In my experience this will be more if there are 8 learners.
Learnership expenditure will be made up of training fees and learner subsistence allowance. The annual figures below represent industry averages, could be slightly higher or lower:

Course fees per learner                                         R 30 000
Learner subsistence allowance                            R 24 000
                                                                                   R 54 000

R 54 000 X 8 learners =  R 432 000

Don’t panic! most of this money comes from external sources:

1.     For each learner, there is a R60 000 tax allowance, that is, we are allowed to reduce our pre-tax profit by R 60 000 per learner.
At a 28% corporate rate, this equates to cash       R   16 800
2.     Average SETA funding (cash)                        R     5 000
3.     Recruitment fee saved                                     R   10 000
                                                                                     R   31 800

R31 800 X 8 learners                                R  254 400

Net effective expenditure (R 432 000 – R254 000)  R 177 600

So, by effectively spending R 14 800 per month, we achieve maximum B- BBEE points and gain an extra 8 pairs of hands for 50% of the day. There is no legal commitment to employ anyone at the end of a Learnership but, since we’ve had a year or so to train and assess them, we may well do so.

So, why wouldn’t we want to use this opportunity?