By John Nicholson

"Skills don't last a lifetime. They depreciate. Any company has to recognize that not only is the human capital of their employees a major asset, it is also a depreciating asset that needs continuing investment."
— Gary Becker, Nobel Laureate in Economics¹

"The only sustainable competitive advantage is the ability to learn faster than the competition."
— Arie de Geus, former Royal Dutch/Shell executive and author of The Living Company²

Introduction

One of the biggest threats of a downturn in the economy is that companies will revert back to the machine-age mindset that, after 200 years of dominance, was finally starting to disappear. For a glimpse of this metaphor, one need look no further than the June 18 issue of Business Week, a special issue on information technology. "Efficiency Rules!" screams the cover. "Oiling the Corporate Machine" reads a related headline.³ Cost-cutting and optimization make economic sense in a downturn. Yet they should never become the sole focus of a company.

The essence of market economies is constant change - this was true long before the Internet boom and remains true after. This churn consists of booms and busts, industries emerging and disappearing, job creation and layoffs. Understood this way, the current downturn is simply part of a broader process of evolutionary change in the economy. And as in nature, in any time of rapid, unpredictable change, the advantage lies not with the "well oiled," but with those best able to adapt. Business success "flows directly from innovation, not optimization," argues Wired executive editor Kevin Kelly. "That is, wealth is not gained by perfecting the known, but by imperfectly seizing the unknown."⁴

How do companies best "seize the unknown"? In short, by constantly learning. This means learning as an organizational whole, through trial-and-error. It also means having a workforce that continually renews itself by acquiring and updating skills. "If you want to be adaptive, innovative, and flexible," advise Stan Davis and Chris Meyer of Ernst & Young, "ensure that new knowledge comes into your organization every day."⁵ Companies that have failed to acquire new knowledge and skills are often easier to spot than those that have succeeded. IBM's inability to reinvent its core competencies in the early 1980s caused its quick fall from atop of the computer industry. The blue suits had by far the strongest set of skills for a world dominated by the mainframe computer. But when the marketplace changed to welcome the PC, IBM and its skills were left behind.

As the pace of economic change has increased in recent decades, so too have the IBMs of the early 80s. As a result more and more companies have recognized the need for a workforce that constantly learns new skills. The vast majority has turned to corporate training, through the classroom or more recently e-learning. Yet there exists a general frustration with training efforts, or at least agreement that they have yet to achieve large-scale change. There are numerous explanations for this, yet in the end they all come back to two main problems: current approaches to learning do not excite employees and they do not excite management. This paper explores why current approaches fail to excite these two groups and what exactly would be needed to reverse the situation. With this framework, it then sketches a far more powerful approach for creating learning organizations: employee skills testing.

Challenge #1: Getting Employees Excited about Learning

"We keep bringing in mechanics - when what we need are gardeners."
— Peter Senge, lecturer at MIT and author of The Fifth Discipline⁶

HR Scare Tactics

There are plenty of numbers that demonstrate the lack of employee support for current corporate learning efforts. A recent ASTD study found that only 1 in 3 people start e-learning courses that are not required to take them. Yet, one doesn't need numbers to understand the dread surrounding company-led learning. Just ask the typical employee what she thinks. As Fast Company founding editor Alan Webber puts it, "if you say to somebody, 'Hi, I'm from Human Resources. I'm here to help you learn,' they're going to make the sign of the cross in front of you, hold up garlic and attempt to make you go away."⁷

This should not be inevitable, but it often is. The problem lies largely with the machine-age mindset mentioned at the start. "A lot of companies are corrupting the idea of 'knowledge work' to fit the same command-and-control structures once used on the shop floors and in the secretarial pools," reports former Wall Street Journal columnist Tom Petzinger. "They squeeze workers into a few hours of training and pass themselves off as 'learning organizations'."⁸ Indeed, corporate training has traditionally followed a company-as-machine model, treating employees as homogoneous cogs that all learn in the same way and can be forced into classrooms.

"Pull, Don't Push"

In order to have fewer employees holding up garlic at learning and more embracing it, we must recognize that employees today are not cogs in a machine; rather they are thinking beings who are already learning quite a bit, without any external pressure. Next we must take a closer look at employees to understand both why and how they learn. If we can better grasp what currently motivates employees to learn, we can explore ways to increase corporate learning.

If there is one key difference between workers of today and those of 40 years ago, it is this: workers today take control of their careers. Realizing that skills are the centerpiece of their careers, and that skills rapidly depreciate, they are also taking control of their learning. Most attempt to learn new skills through the day-to-day tasks of their current jobs, often by taking on new responsibilities. Others enroll in training or continuing ed, either on their own or through their company. Some take on side work.

Overall we can say that learning is increasingly self-directed and that it comes from a wide variety of sources, often ones that are informal and on-the-job. Brook Manville, Saba Software's chief learning officer and the former director of knowledge management at McKinsey & Co., calls this the "pull-not-push" principle. Learning, he argues, is driven primarily by the "demand" (or pull) of employees to solve day-to-day problems, not the "supply" (or push) of training classes.⁹

How to Stimulate More Demand for Learning

How can this "learning pull" from employees be enhanced? We can identify three strong motivations for learning in knowledge workers today. While each of these is functioning today, all can be significantly enhanced.

1. The most obvious motivation, based on our discussion above, are tangible benefits to employees' careers. Individuals not only want to be able to attain new skills, they want to be able to prove those skills to potential employers and clients in the future. So any system of learning must allow workers to "show what they know."
2. Not only do individuals want to be able to prove their skills to potential employers, they want to be able to prove it to themselves and their immediate peers. Open source software guru Eric Raymond argues that knowledge workers today are not motivated primarily by money - "money is just a way to keep score."¹⁰ The key is to have some sort of "scoreboard" that shows who the smartest, most skilled individuals are. For open source volunteers, Raymond points, the scoreboard is the credit list on pieces of code. But there are plenty of other possible scoreboards that will motivate individuals, especially in the area of learning.
3. In addition to these largely external motivations, there exists an internal one. Research shows that learning occurs best through "play" - a game-like situation with clear goals, appropriate challenges, and clear feedback. When these criteria are met, people are most likely to enter what psychologist Mihaly Csikszentmihalyi calls "flow," the state when "a person's body or mind is stretched to its limits in a voluntary effort to accomplish something difficult and worthwhile."¹¹ It is in these situations, when learning is fun, that the best learning takes place.

Thus our approach to learning must respect that people are learning on their own, often on-the-job and often in communities. Rather than pushing learning on employees from the top-down (like a mechanic), it should encourage them to pull more learning on their own (like a gardener). Three promising ways to stimulate the pull of learning are (1) give employees a tangible way to "show what they know" to future employers; (2) establish a "scoreboard" that allows employees to measure their skills against those of their peers; and (3) encourage "playful learning" by providing clear goals, appropriate challenges, and immediate feedback.

Challenge #2: Getting Visionary Leaders Excited About Learning

"Sophisticated leaders recognize that measurement systems focus organizational attention. It is no accident that great companies develop unique standards of performance-and that these often involve people."
— Jeffrey Pfeffer, professor of organizational behavior, Stanford Graduate School of Business¹²

Systems, Not Events

In their best-selling book Built to Last, Jim Collins and Jerry Porras discuss how "time tellers" are much less likely to lead successful companies than "clock builders." Whereas "time tellers" focus narrowly on creating a single great idea or product, "clock builders" develop long-term systems and organizational architecture that allow great products to be created again and again. This approach becomes more important in a dynamic economy where products-cycles are increasingly short.¹³

The same holds true for learning. In a fast-paced economy, where "skills-cycles" are increasingly short, what is needed are clock builders who create systems that encourage decentralized, continuous learning. Unfortunately, as former Coca-Cola VP Judy Rosenblum observes, for many companies "learning is just a human-resources thing [and] learning is event-driven. They teach their people new skills when and only when they want their people to learn those skills." In other words, learning is run by time tellers. In place of this "events" approach, Rosenblum argues that learning "needs to be embedded in an organization, and it needs to be viewed as a system."¹⁴ In other words, learning needs clock builders. If HR tends to be made up of "time tellers," we need to look to management if we are going to create systems that encourage continuous learning.

Research by Stanford professor Jeffrey Pfeffer supports this idea. His work identifies a number of companies, like Southwest Airlines, that achieve "profits through people." Leaders of these companies, notes Pfeffer, "don't necessarily make a lot of business decisions." Rather, like clock-builders, they "see their roles as systems architects [who focus on] recruiting, motivating, and developing people."¹⁵ Unfortunately, such leaders remain the exception, not the rule.¹⁶

"What Gets Measured Is What Gets Done"

In order to begin to have more leaders acting as "systems architects" for learning, we must get them excited about learning. This has not happened until now largely because few learning initiatives can be connected with measurable results. "What gets measured is what gets done" is not just a saying - it is an empirically proven point that visionary leaders recognize. According to a recent roundup of studies, companies that introduce measurable goal-setting programs witness an average 39% increase in productivity.¹⁷

Traditional training programs have either left out measurements completely, or they have used measurements that few leaders could get excited about - such as hours spent in the classroom or percentage of people in the classroom. Even with recent improvements in technology that promise to make learning more flexible, companies have found few meaningful ways to measure learning. Tom Kelly, vice president of worldwide training at Cisco, desribes how a Cisco department used to receive instructional CD-ROMS every quarter. "This system worked if your only metric of success was how well you could create and distribute CDs. But no one could tell you how many people looked at those CDs, or if people learned anything from them."¹⁸

Outcomes, Not Inputs

As Kelly's comment suggests, the types of measurements that are important - the types that will get management excited - are outcome-based, not input-based. Focusing on inputs, broadly speaking, derives from a machine-age mindset. It typically assumes that knowledge resides at the top and advocates one-best-way, command-and-control approaches. In the case of learning, distributing CD-ROMS is an input. Classroom attendance is an input. Completing an e-learning course is an input. In training programs where classroom attendance is the only measurable objective, it is easy to see how top-down, one-size-fits-all measures follow ("You must attend this course").

An outcome or performance-based approach, by contrast, recognizes that there is no one best way, that allowing a thousand flowers to bloom encourages experimentation and progress. Broadly speaking, it identifies the outcomes that are truly important, tells individuals how these are going to be measured, and then leaves it up to each individual to figure out how best to achieve them. In the case of learning, allowing a diversity of approaches is crucial. As we discussed earlier, employees increasingly learn on their own and in numerous ways. What is important to measure is not how they learn (the input) but what, and how much, they learn (the outcome).

A recently formed commission of governors and industry leaders, the Commission on Technology and Adult Learning, studied the corporate learning landscape and reached this very conclusion. The group argues that "the traditional, institution-based approach to credentialing individuals for completion of classes and programs of study is not a viable standard of measurement in an ? environment where learning is increasingly self-directed and comes from a wide variety of sources." Given that "what an individuals knows and is able to do" is most important, we need to move towards "developing and promoting outcome-based assessments of learning results."¹⁹

Questions to Ask

From the above discussion, we can identify a series of tests through which we should put any system of learning - two main tests and three "sub-tests" for each. Passing each of these tests is a good indication that our system of learning will excite both employees and management.

For Employees: Does it pass Manville's "pull-not-push" test? Does it encourage employees to pull more learning on their own, rather than pushing it on them from the top down?

1. Does it pass Raymond's "scoreboard" test? Does it provide an objective way for employees to measure their skills against their peers? Does it play to individuals' egos?
2. Does it pass the "show what you know" test? Does it give employees a tangible career benefit by allowing them to display what they have learned to potential employers?
3. Does it pass Csikszentmaihlyi's playful learning, or "flow," test? Does it provide clear goals, appropriate challenges, and immediate feedback?

For Leaders: Does it pass Collins and Porras's "clock builder vs. time teller" test? Is it "an HR thing" concerned only with the short term, or is it a directive of leadership that promotes ongoing learning?

1. Does it pass Rosenblum's "system-not-events" test? Does it consist of occassional, narrow activities, or is it embedded in the everyday workings of the organization?
2. Does it pass the "what gets measured is what gets done" test? Does it provide an objective system to measure individuals, and company-wide, learning?
3. Does it pass the "outcomes vs. inputs" test? Does it focus measurements on whether and what people are learning, leaving the "how" up to the individual?

From "Résumé-ing" to Employee Skills Certifications

"If we all thought of ourselves as travelling through life accumulating storyboards that we can brag about, then I suspect that we, our firms, and the whole nation would be a lot better off."
— Tom Peters²⁰

What type of learning system meets these criteria? What type of system excites both employees and leaders? The work of business guru Tom Peters suggests the ingredients of one promising approach. In discussing how bosses can get employees to grow more on the job, Peters proposes a system of "résumé-ing." In place of performance reviews, bosses should sit down with an employee once a quarter and review that employee's résumé with him or her.

The basis for the review would be the list of "résumé-ables" accomplished by that employee over the previous three months: completed projects, new contacts, client testimonials, and new skills. The beauty of this outcome-based approach is that it is a win-win situation. Employees win because they are improving their résumés and thus their long-term career prospects. Employers win because it encourages employees to start and complete "résumé-ables," which by definition bring value to the company.²¹

If we apply this "résumé review" concept solely to employment skills, we can begin to see the outline of a promising system for corporate learning. Once a quarter, bosses could meet with their employees to go over which new skills have been acquired and which skills have been renewed. The win-win is obvious: the more skills an employee gains, the more marketable she becomes and the smarter, more resilient her company becomes. If bosses felt that employees needed more motivation, they could tie skills renewal to promotions and other internal rewards. "How about a quarterly resume improvement contest?" suggests Peters.

In order for this concept to work, bosses need to be able to objectively measure skills renewal and employees need to be able to tangibly demonstrate it. Both of these needs can be met by a system of skill certification tests, like that offered by Brainbench. The Brainbench Skills Certification System (SCS) gives companies and their employees access to over 350 skill certification tests in areas ranging from database administration to financial accounting to human resources management. In a company that uses Brainbench, we can imagine an IT manager and one of her employees sitting down for a "skills résumé review" that sounds like the following:

Barbara (the Boss): So which new skills certs do you have this time? And which ones did you renew?

Stan (the Employee): I renewed certs in C++, Project Management, and Java 2. As for new ones, I'm now certified in EJB and Oracle PL/SQL.

Barbara: What about Oracle Developer 2000? I have that down as one of the ones you were shooting for.

Stan: Yup, I didn't learn as much in that as I had hoped. Let's keep it on the list for next time.

Barbara: What else should be on the list for next time?

Stan: Well, the team seems to have a need for someone with more desktop publishing skills, and I'm interested in that area. So I'd like to get certs in Adobe Photoshop 6.0 and CorelDRAW 9.0.

Barbara: Hmmm ? we do need somebody who knows those things better. But we're really about to get deep into using AutoCAD and nobody's skilled in it yet. I think we need that capability more than publishing. I'm also wondering if we shouldn't have someone that knows IMS. Are these things you're interested in picking up?

Stan: Definitely AutoCAD. But from what I hear IMS is on its way out. I think I'd be better off focusing on AutoCAD.

Putting Employee Skill Certifications to the Test

A closer examination of Brainbench's Skills Certification System shows that it successfully passes each of the tests we discussed earlier. Therefore, in addition to the win-win described above, this system promises to excite both employees and visionary leaders in numerous other, more subtle, ways.

Exciting Employees: By focusing on what a person actually has learned, SCS is consistent with a world in which learning is often self-directed and comes from a variety of sources. It does not "push" learning on employees, but rather, through the motivations inherent in certifications, encourages them to "pull" more learning on their own - in whatever format works best for them.

(1) The most obvious motivation is that this system allows employees to "show what they know" to potential employers and clients in the future. An SCS gives all employees an electronic transcript in which they can easily display their certifications. (2) An SCS also gives employees a "scoreboard" to measure against, and display their skills front of, their peers. This can be done within a specific skill - "who has the best C++ score in the company?" - and it can be done more generally. To enhance the power of this scoreboard, bosses can use it for promotions and other internal rewards.

(3) Finally, when done as part of a resume review, an SCS also meets Csikszentmaihlyi's checklist for encouraging playful learning. They give the employee a clear goal that is challenging (to get certified, or perhaps to achieve a certain score or percentile) and they give the employee immediate feedback on his/her learning (in the form of a detailed score and percentile information). It should come as no surprise that one of the most common reactions of people who have just completed a test is "that was fun." As Csikszentmahilyi notes, people are happiest when they're minds are stretched, and tests are designed to stretch minds.

Exciting Management: An SCS should appeal to "clock builders" who are drawn to outcome-based systems that continually encourage employees to develop their skills. (1) It is possible to have skills testing that is merely an "event" with a short-term focus. But a skill certifications that are part of ongoing "resume reviews" constitute a system that is embedded in the organization and that encourages continuous learning.

(2) Since tests are by nature a form of measurement, an SCS should also appeal leaders who recognize that "what gets measured is what gets done." (3) And since tests focus solely on quantifying what an individual actually knows or has learned, this system meets the "inputs vs. outputs" test as well.

Conclusion

A system of employee skill certifications promises to meet the two main challenges facing corporate learning today. It has enormous potential to excite both employees as well as visionary business leaders. It has this potential because it succeeds where traditional learning efforts have failed. Rather than pushing learning in command-and-control fashion, it encourages decentralized pulling - through "play," "scoreboards," and "rewards." Rather than focusing on HR-style, input-based events, it offers a learning system centered around outcome-based measurements.

Most importantly, a skill certification system guarantees a win-win approach to learning in an economy where it is increasingly costly for either side to "lose" the renewal game. As the pace of economic change quickens, employees must act more like free agents and companies must act more like living organisms. Both must be able to adapt rapidly by constantly learning and reinventing their skill sets. A skill certification system makes this possible. The more employees benefit by adding to their skills portfolio, the smarter and more adaptable their company becomes.

¹Brook Manville, "Talking Human Capital with Professor Gary S. Becker," LiNE Zine (Spring 2001).

²Randall Rothenberg, "Arie de Geus: The Thought Leader Interview," Strategy and Business (February 11, 2001).

³Peter Burrows, "The Era of Efficiency," Business Week (June 18, 2001).

⁴Kevin Kelly, "New Rules for the New Economy," Wired (September, 1997); see also Kevin Kelly, New Rules for the New Economy: 10 Radical Strategies for Connected World (New York: Viking Press, 1998).

⁵Stan Davis and Christopher Meyer, Blur: The Speed of Change in the Connected Economy (New York: Warner Books, 1998).

⁶Alan M. Webber, "Learning for a Change (Interview with Peter Senge)," Fast Company (May 1999).

⁷Brook Manville, "Fast Forward to eLearning with Fast Company's Alan Webber," LiNE Zine (Fall 2000).

⁸Thomas Petzinger, Jr., The New Pioneers: The Men and Women Who Are Transforming the Workplace and Marketplace, (New York: Simon & Schuster, 1999).

⁹Brook Manville and Nathaniel Foote, "Strategy as if Knowledge Mattered," Fast Company (April 1996).

¹⁰William C. Taylor, "Inspired by Work (Interview with Eric Raymond," Fast Company (?, 2000).

¹¹Mihaly Csikszentmihalyi, Flow: The Psychology of Optimal Experience (New York: HarperCollins, 1991).

¹²Jeffrey Pfeffer, "The Real Keys to High Performance," Leader to Leader (Spring 1998).

¹³James C. Collins and Jerry I. Porras, Built to Last: Successful Habits of Visionary Companies (New York: HarperCollins, 1994).

¹⁴Alan M. Webber, "Will Companies Ever Learn? (Interview with Judy Rosenblum)," Fast Company (October 2000).

¹⁵Jeffrey Pfeffer, "The Real Keys to High Performance."

¹⁶Those that do get involved tend to adopt a 'War for Talent' mentality. In a tight labor market, such a mindset certainly makes sense to a point; Bill Gates is famous for saying that, minus its 20 best employees, Microsoft would be an ordinary company. But thinking that your only 'people' role as an executive is to find the next great employee slips into the "time telling" trap of short-term thinking. It is more important to build systems that will keep developing people again and again.

¹⁷R. Rodgers and J.E. Hunter, "Impact of Management By Obectives on Organizational Productivity," Journal of Applied Psychology (Vol. 76, 1991). This concept is supported by Collins and Porras in Built to Last. In their study of 18 highly successful companies and 18 comparison companies, the authors found that in 14 of 18 cases the more successful company made greater use of BHAGS ("big hairy audacious goals"). A true BHAG, according to Collins and Porras, is "clear and compelling and serves as a unifying focal point of effort" and "has a clear finish line, so the organization can know when it has achieved the goal."

¹⁸Anna Muoio, "Cisco's Quick Study," Fast Company (October 2000).

¹⁹A Vision of E-Learning for America's Workforce, Report of the Commission on Technology and Adult Learning (ASTD/NGA, June 2001).

²⁰Tom Peters, The Tom Peters Seminar: Crazy Times Call for Crazy Organizations (New York: Vintage Books, 1994).

²¹Tom Peters, The Tom Peters Seminar; Tom Peters, The Circle of Innovation: You Can't Shrink Your Way to Greatness (New York: Knopf, 1997).