Friday, September 19, 2008

Banks, junkies and methodone training

Debt drug junkies
Easy to blame the banks for all of our ills, but if they're the drug dealers peddling the debt drug, we're the junkies, who lapped this stuff up - credit cards, loans, mortgages. We're as addicted to debt as the dealers are to quick cash. The problem is that the dealers became massive junkies themselves, borrowing on a massive scale to feed the beast. What has always concerned me, and I've mentioned this often enough in this blog, is the attitude of financial institutions towards compliance and regulatory training, which was meant to cub this overzealous enthusiasm.

Methadone training
You don't stop drug dealers and junkies by talking at them in classrooms or making them do read text interspersed with multiple choice questions. That's why almost all regulatory and compliance training makes the situation worse, not better. HR departments plays the following corrupt game:

1. Hire lawyers to deliver the training (they're boring, can't teach and simply reiterate the law)
2. Deliver dull classroom courses that fail to put people into real jeopardy situations
3. Deliver even duller e-learning courses that push the issues out of people's minds
4. Treat compliance e-learning as a commoditised, low price, rapid e-learning task, ensuring it's lack of punch and effectiveness
5. Refuse to admit to, and use, real, internal failures and disaster stories to make the point
6. Play the 'tick-box' game - just do it, don't worry if you've learnt anything

We have Professor Frank Dobson from Harvard showing us that at least one species of compliance training is completely ineffective, if not counter-productive. Has anyone really read or taken action on the back of this overwhelming evidence (702 companies)? No.

The FSA have been one of the real culprits here. They just can't hack it in delivering training but so are the training departments who commission this stuff. The solution is now clear. Behaviour will be curbed by further restrictions and laws. Deal drugs, go to jail. By failing to make it clear that corrupt practices and behaviour will be punished, we've all paid the price.

For employees to toe the line on regulation and compliance, you need attitudinal and behavioural change. This meas serious performance simulations that put people in realistic situations. We have the tools, design and capability to do this, but hardly anyone has the balls to commit the, albeit meagre. budgets to get the job done.

Capitalism could be reshaped by rehsaping minds towards reasonable, fair and rational management and selling. A mass training programme, using powerful, immersive, scenario-drive performance simulations is required on the back of all this chaos, or we'll be in the same position further down the line.


Andy Tedd said...

Hi Donald,

Got a link to the Dobson research? I agree elearning (and learning in general) lack a sense of jeopardy.

A bit more of a 'live fire' approach will mean people learn more and have more fun.

Not cheap to do well though, and difficult to senior management interested in it (which they need to be, because its not cheap), unless there is a burning platform...

Mark Berthelemy said...

Hi Donald,

Do you have a link to the Frank Dobson report. I'd love to have that sort of evidence-based ammunition available.



Anonymous said...

This is the reason why I don't use a credit card. It is always tempting to overspend but one thing really good about Indian culture is that debt is looked down upon. There is an extreme habit of cutting corners and saving for kids' education, daughter's dowry. old age and on and on. Don't know if this is a better approach or the culture of enjoying borrowed money from future earnings.

Good Post as usual!

Donald Clark said...

Harvard’s Frank Dobbin (sorry poor recall) has conducted the first major, systematic study of diversity programmes across 708 private sector companies, using employment data and surveys on employment practices. His research concluded that, “Practices that target managerial bias through…diversity training, show virtually no effect.” In fact, “Research to date suggests that… training often generates a backlash.”

Many other studies show that diversity training has activated, rather than reduced diversity (Kidder et al 2004, Rynes and Rosen 1995, Sidanias et al 2001, Naff and Kellough 2003, Bnedict et al 1998, Nelson et al 1996). These are all referenced in the report.

The research is a very thorough piece of work, and well worth reading, which is why it will most likely be comprehensively ignored.