Coaching through the Credit Crunch

Coaching through the Credit Crunch My experience suggests that managers who are able to coach their staff are the ones best able to weather the current economic storm. Managers who are able to coach their staff have greater value to their current organizations and are more attractive to alternative employers. This short paper is in two parts: In part 1 I set out my own views on how coaching provides answers to the questions foremost in the minds of learning and development professionals at this time. In part 2 I have reproduced a series of viewpoints focused on specific ways to protect training budgets at a time when arbitrary and perhaps unwise cost-cutting exercises are likely to become commonplace. Part 1: Questions we must face Learning and Development professionals are being kept awake by these questions: What if I lose my job? What if I lose my staff What if our budgets are cut? What if we lose some orders? How can we carry on training? What happens when things get better?

No doubt there are others too, but the above list represents a summary from my own discussions and debates. Can coaching possibly provide answers to such questions or is coaching just a luxury to be had during times of boom but not bust. I believe that an investment in coaching skills now is the best way to get through any tough times and to emerge from them better placed to do well in the next upturn. Lets look at the questions specifically. What if I lose my job? On the assumption that youll want to find another one or at least find another way of earning income, Id like to suggest that an ability to coach will do your chances no harm at all. Organizations will always need people skilled at achieving results through others. This is even more the case in times of economic difficulty. Staffing levels will be cut

Copyright 2009. Matt Somers Coaching Skills Training. All rights reserved.

leaving managers and leaders needing to achieve the same results with fewer people. Mangers and leaders demonstrably able to do this are likely to be highly attractive and sought after. If youre able to include some specific results in your CV or Resume so much the better. Coached my team and was able to cut wastage by 5% per annum trumps I am an effective manager of people Alternatively, you might be in a position to accept a severance and set up in business or as some kind of solo professional. Once again its likely that youll be engaging with other people at some level and an ability to coach to help them become focused and mobile will dramatically increase your chances of success What if I lose my staff? If our current situation is anything like the last major downturn, so called downsizing will once again be common. You may finish work on a Friday with a team of 12 and return on Monday to a team of 6. Youve still got the same (if not more) amount of work today with half the people you had and theyre probably shocked and frightened to. Put on your coaching hat and get talking to them. Allow them to express their fears openly and tell them that you understand. After all youre probably in a similar position. Remind them that now would be a really good time for the whole team to raise its game. That doesnt have to be positioned as a threat; quite the reverse. The coaching approach will enable you to tap into much of their ability which was always there but which maybe you didnt need so much in the good times. What if our budgets are cut? Demonstrate value! Show a return on investment! If you can demonstrate that for every 5k of budget, that you can return say, 6k of value in 12 months your budget will not be cut. Any organization that is continuing to operate will be spending money, its just that we need to be more cautious about what we spend money on. Its quite right that needless cost should be stripped out but you need to position your work as something that is crucial to long term success. Part 2 has some more thoughts on this.

Copyright 2009. Matt Somers Coaching Skills Training. All rights reserved.

What if we lose some orders? You can use coaching to increase your sales ratios. Unless your sales team are converting every lead, there is unconverted business available to you already. Why arent more leads being converted? What if every lead that wasnt converted into a sale became a learning opportunity and a way to find out why not? It may be that up till now your conversion ratios were enough to hit your targets and you could just resign yourself to the fact that you cant win them all. This will not be enough now, we need every lead to become a sale or learning point and this is only possible from group of people coached to perform, learn and enjoy in equal measure. How can we carry on training? By recognizing that a decline in formal training does not mean there has to be a decline in learning. When line managers can coach they are able to provide learning and development every single working day, irrespective of what the training department may be getting up to. Whats more this type of learning is specific to the needs of the individual, requires no time away from the job, and is delivered at exactly the time it is needed. What happens when things get better? Firstly we all breathe a sigh of relief and then you look around and see a team that youve coached through the worst of times brilliantly placed to take advantage of the better times to come. Whilst Bloggs and Co down the road battened down the hatches, laid off all their staff and prayed, you engaged with your people and took them with you. You coached them and their up to speed with the market and the needs of your customers. Their stronger for knowing that they can cope in the most trying of circumstances and theyve learnt exactly what they needed for doing so. Even if they now move on to something different, youve achieved a moral victory and probably enhanced your reputation as an employer.

Copyright 2009. Matt Somers Coaching Skills Training. All rights reserved.

Part 2: Answers from LinkedIn LinkedIn is an online professional network; a work-related version of Facebook if you like. On the 11th January 2009, I posted the following on the Questions and Answers forum: How do we best protect training budgets when these are often the first to be culled in difficult economic times? What follows are peoples unedited replies. I have removed their organizational details because these are only personal viewpoints. Neither can they be taken as the views of the Linked in organization itself. I have my own view on the quality and usefulness of the responses and I pass them on in the hope they stimulate your own thinking. Please feel free to contact any of the respondents directly which you can do from www.linkedin.com Lillian LeBlanc Hi Matt: Its all about ROI, as you know. Here are a few suggestions: 1) Measure the retention rate among those who have utilized development opportunities and those who have not. Talk with your HR folks to determine your companys cost per hire. You can then distill a hard dollar savings from the increased retention yielded by training programs. 2) Demonstrate savings from in-house training versus conferences or off-site educational opportunities. This one should be relatively simple. Research the kinds of conferences that your employee have attended but that could have been provided in-house, derive the cost of travel and lost time from the workplace to demonstrate savings. 3) Research best companies Ive provided a link to the FORTUNE 100 Best website, and Working Mother magazine's website. You can drill down on many of the companies listed to discover their specific practices, or head directly to the company's website for even more information. Youll find that most are cons idered best practice organizations in terms of training and development. There is a great deal of research to support the notion that Best Companies have lower turnover, higher employee engagement and among those publicly traded, a P/E ratio. I've also provided a link to the the website for the Great Place to Work Institute (sponsors of the FORTUNE survey), where you will find many excellent research articles.

Copyright 2009. Matt Somers Coaching Skills Training. All rights reserved.

4) Conduct a web search on Training and Development Programs ROI to identify other key metrics that might be meaningful to your organization. 5) Lastly and probably most important: Ask your senior leaders what they consider added value. How do they know when training is good? What would they consider to be the most positive outcome or payback from training and development programs? Armed with this information, develop your business case to respond directly to the issue most meaningful to your leaders. Best of luck to you! Trellis Usher-Mays Lillian's answer is spot on. You have to show a clear and credible line of sight between your programs and some positive business impact. Trying to determine ROI or business impact after the programs have already been implemented is difficult but not impossible. You may take a hit on the credibility of your results if there has been a large gap between the program and the results. Also don't be afraid to eliminate programs that aren't adding value...better you than execs who may not have all of the information. Jerry Linnins Matt, I think your premise (while as an ex-training manager I understand the thought) is not sustainable in today's environments. Trying to protect/defend budgets will not be seen as a "valuing adding" activity by anyone. Another approach is to create a better "line of sight" between any training offered and the outcome that training is intended to achieve. Lillian outlines some great tactics. Additionally: Conduct some "brownbags" or "lunch-and-learn" sessions to feature training results or to outline your approach to training, conduct "focus group" sessions to solicit feedback on training and the perceived value, gaps, etc. Search the web (ASTD.ORG, ISPI.ORG and other training, performance organizations) to get some research data on ROI, value, cost of NOT doing training to organizations. Identify safety, compliance, quality, and value to employee retention, morale, etc. Finally, it may mean an adjustment to your business model. I once worked at a place that was an "overhead shop." Then, we were forced to transition to a "pay-as-yougo" shop where we charged back the cost of training design/delivery to the internal customers. They were not required to use us. Therefore, we had to compete for our own company's training business. By changing our own mindsets, training design model, and focusing on the client's perception of value we were able to successfully

Copyright 2009. Matt Somers Coaching Skills Training. All rights reserved.

"defend" our work. Just me... Bill Cushard Matt, Rather than defending your budget, you might consider coming up with a plan to ask for less money and deliver similar results. Find ways to be more efficient in your training development and delivery methods. Show management you understand the business need to be lean. In other words, don't wait to be told, "you need to cut"....do it yourself and deliver the same or better results. Management will respect that. Tough to do, but at least worth a look. Ways to be more efficient....informal learning sessions, podcasting product/policy updates (recorded with $15 microphone at your desk), webinars, articulate/capitvatetype self-paced elearning, getting managers involved in delivery, etc. Be creative. Bill Pam Kennett I would start by being bold - throw everything up in the air and go back to basics. What does the business need to deliver its strategy for the next 6/12 months? At the same time try using Kirkpatrick's model to measure the impact of each intervention. This model was established in the 50's and has been used by countless organisations to measure the effectiveness of learning interventions. See my article referencing this below. Hope this helps. Dwight Long I come at this from an operational point of view and I hope to contribute to the discussion from that perspective. Training is an easy cost reduction target for executives looking for short-term budgetary savings. The program manager must demonstrate a broad based long term return on investment as part of an integrated Total Quality Management (TQM), Human Resources (HR) and Sustainability program to complement capital plant and equipment investments over time. These long-term strategies yield significant returns by curtailing overhead cost and increasing productivity to improve ROA, ROI and ROE. Ultimately the programs should leverage net profitability and create stockholder value.

Copyright 2009. Matt Somers Coaching Skills Training. All rights reserved.

I recommend providing management with TQM / HR data measured against either a industry-wide Productivity Index or an internal productivity baseline calculated over previous years to demonstrate the effectiveness of the current programs. Increased productivity combined with demonstrated lower cost consistent with capital improvements over time are a benchmark measurement in my view. Reduced labor & material cost-per-unit provides the company with a product by product competitive advantage in terms of increased contribution margins, net margins and net profitability. An improved productivity index can be a testimony to the viability and operational / financial contributions of effective TQM / HR / Sustainability programs. I believe this should be the cornerstone of any discussion centered on reducing program cost. I suggest measuring effectiveness of the programs beyond productivity gains or labor and material cost reductions. How does your turnover rate measure up to industry norms? What is the incremental cost and primary effect on the company of an above average turnover rate? How does an increased turnover rate materially affect the ROA on operational facilities? What is the total HR cost per employee vs productivity vs the industry? What is the cost of the TQM / Sustainability initiatives and how are they impacting the company's cost reduction / social responsibility goals? How are the programs directly affecting labor and material cost, product contribution margins, net margin, net profitability, etc.? It is important to demonstrate that these programs are drivers by every business profitability measurement. Bottom line? Integrated Total Quality Management, HR Training and Sustainability programs can be powerful contributors to both top line revenue and bottom line results as part of a balanced program of continuous process improvement and a capital investment plan designed to achieve a long-term competitive advantage. It is important to understand these programs are the cumulative result of multi-year long term continuous commitments to training and employee improvement initiatives designed to reduce administrative costs, gain productivity efficiencies, reduce labor and material cost, increasing product demand, reduce R&D time-to-market life cycle cost, etc. Fair warning: Diminishing returns may occur over time, all things being equal. Turning off training programs for short term budgetary gain can be counterproductive. ....My $.02.... Anders Hemre Organizations that do not generally recognize or account for the value of intellectual capital or the tangible benefits of intangibles will always have somewhat of a tough time with this. One either makes an investment in learning because one believes in it or because one has calculated the benefits as a return on investment or return on effort. The problem with using business results as a measure of outcome is of course that, while there may be a positive impact from learning, there could also be positive and

Copyright 2009. Matt Somers Coaching Skills Training. All rights reserved.

negative impacts for a number of other internal and external reasons - a customer failed to obtain credit or deferred an investment, competition made inroads, a key expert left the company etc. I would recommend that a clear value logic (of a particular learning effort) be established before any ROI type calculations are attempted. It will both result in more credible numbers and provide a better way to determine and track what is actually happening. It may also be possible (at least in some cases) to apply a valuation method similar to what can be done for innovation investments using real options. This would involve accounting for the possible decline in performance if learning is not undertaken and for the value of creating future options as a result of learning. Bryan Lund Matt, I'm not trying to cast generalizations or stereotypes here, but it is time for training folks to get beyond "presenting value" and actually start "creating value," through cost reductions and savings. The program I use, creates value by "solving production problems that involve people." Anything that involves people doing work means that something of perceived value is being produced. How is it made, compiled, reported, painted or used? Often, by focusing on the training element of the job, that is, how the job is done and why it is done that way - we can tap into peoples' intrinsic desire to see improvement opportunities in front of them that they are normally blind to. Check out the materials and let me know what you think. I've used this OJT training & problem solving approach in finance, IT, HR, assembly, maintenance and engineering. It works because it has nothing to do with those departments, but more to do with what makes people tick. In short, you can produce an ROI using an updated version of this program that involves each an every person in your organization and you can do it with your existing people. Sam Makhoul Matt, take a page out from your Project Management experience and respond to the budget with your negotiation skills. Manage and negotiate the Triple Constraints! Also, make sure the stakeholder(s) (those who have skin-in-the-game) know exactly what will happen, as a result of giving priority to the one, more than the others and vise-versa (play around with this). Use the following questions to help you through the process: What will happen if this? In other words, what will we gain and what will we sacrifice? And, so what? Sam Makhoul Michael V Littlejohn

Copyright 2009. Matt Somers Coaching Skills Training. All rights reserved.

Matt I agree with all of the above comments. Having said that... I think that the realities are such that training leaders need to be proactive in defining "alternate" means of developing employees - alternate to the traditional approach of formal, structured, training programs (either in-place or e-learning). We have been espousing the next generation of the "blended learning model" to deal with the realities of reduced budgets. Using readily-available - and often less expensive - Web 2.0/Social Networking tools, we're introducing more virtual and justin-time learning to integrate with our more formal,traditional, learning programs. We're making much more use of FAQs, knowledge databases, intelligent directories to deliver the knowledge when and where it's needed. The pushback, from training leaders, is that just-in-time is different from true "learning". We agree... but the greater workforce turnover, decreased training budgets, proliferation of connection tools, and reduced employee time away from "work" all point to needing a different approach to how we develop employees. Good luck! Emily Coltman Hi Matt, How about turning your classroom-based courses into video-based courses? You can then sell the courses to your customers for a lower price (so that it won't have as much impact on your training budget). And also, your customers would be able to buy courses through your website at any time. You can sell your material without needing to be there to deliver the course. If you're interested in this, please drop me an e-mail through LinkedIn or at emily@askm.co.uk

Copyright 2009. Matt Somers Coaching Skills Training. All rights reserved.

Lastly.. We hope youve found this report an interesting and a useful iinsight to the art of Coaching You can build on this knowledge and skill by attending our training programme Coaching at Work. Details on our website at www.mattsomers.com or call us on +44 (0) 1429 839 266.

Alternatively, if you would like to do some further reading, my books Instant Manager: Coaching and Coaching at Work are available by visiting www.mattsomers.com

Thank you Matt Matt Somers has been training managers as coaches for many years. He is a Fellow of the CIPD and the author of Coaching at Work (John Wiley and Sons, 2006) and Instant Manager: Coaching (Hodder and Stoughton/Chartered Management Institute, 2008) Matt understands that people are working with their true potential locked away. He illustrates how coaching provides a simple yet elegant key to this lock and how releasing potential in this way transforms the performance of all organizations. Contact him at: matt@mattsomers.com +44 (0) 1429 839 266 www.mattsomers.com www.coachingbloke.blogspot.com

Copyright 2009. Matt Somers Coaching Skills Training. All rights reserved.