Wednesday, December 10, 2008

Credit crunch survival guide

Will e-learning be accelerated or decelerated by the credit crunch? One thing’s for sure – training budgets and training departments will be hit hard. Some organisations will disappear. Others will not train as they’re laying off staff. Some will take the budget and decimate it, as they need to save money they to simply survive. Some, however, will see learning as a survival mechanism. In this market it may be useful to red, amber or green each sector.

Some green shoots and surprises as a tsunami of cost cutting washes out old stand-up methods and looks for things to be faster, cheaper and scalable.

Financial sector may be surprisingly robust. They’re merging and, as traditional training has clearly failed to have much effect on their behaviour, using e-learning to solve compliance and regulatory pressures.

Defence has guaranteed budgets, for the time being, and the world is a scary place, and getting scarier.

Adult learning as massive unemployment will mean massive retraining needs. Look out for Train to gain and other government initiatives that combat this problem.

Oil and gas are running out so these organisations have to get smarter to survive. Until alternatives are found, we still need to heat, eat and get around. They’ve got us over a barrel.

Challenging but these guys are survivors.

Healthcare will carry on like leeches on our backs.

Telcos will continue to charge too much, feed our addiction and pollute public spaces.

Education will drag itself into the 21st century - maybe.

Government departments will be squeezed but benefits and training will not.

Blood all over the classrooms in these sectors.

Automotive’s a multiple pile up. They’ve been looking in their rear view mirrors for far too long. Some big names are crashing out of business, others will lay off staff. All will have to reduce costs.

Retail is in big trouble. We’ve shopped til we drop and the party’s over. Closing down sales.

Construction has ground to a halt with massive layoffs. Bricks don’t mean clicks.

Airlines will consolidate or crash. The combination of credit and climate crunch is causing them serious pain.

Damage limitation
The so called experts didn’t predict the crash, so we can safely assume that they don’t know how long it will last. So, if I were running an e –learning organisation, I’d certainly be rewriting my sales and marketing plan, and readjusting now. I’d also be selling less on learning and more on business benefits. The Next generation Learning campaign has a pretty good list:

1. Achieve more with less - optimise limited budgets and time
2. Gain fast access to learning - available 24x7 at point of need
3. Improve Competitiveness - respond quickly to changing business needs
4. Improve Productivity - skills & knowledge when needed
5. Address statutory learning effectively – faster, better, cheaper compliance
6. Reduce Carbon footprint - reduce travel & meeting costs
7. Harness Informal learning - connect learners with resources and experts

Interestingly, I’ve heard of layoffs by some e-learning suppliers and in-house departments, but increased sales in others. This confirms my view that there’s pain and gain, depending on what you do and for whom.


Anonymous said...

2 things IMO in this recession:
1. The corporate world will turn to 'fine-tuning' its apps and learning. This means both raising the productivity/viability of its existing systems and in some cases outsourcing the entire learning function
2. learning will be on-demand and the result of that will be more blurring between 'on-the-job' apps support (some provided by the training function) with BI/ CRM etc business-unit focused apps. Many of these will be supplied by the app suppliers themselves (SAP or SI companies like EDS etc).

I've been watching this closely for over 10 years and I believe that the learning function and budget will be to some degree ghetto-ised. When I worked with Admiral Computing the learning or training part of the service was almost an add-on and so in difficult times could become the loss-leader to win the deal (as the IT dev function was more profitable).

The learning community has to become smarter and more focused and the days of just being an elearning supplier are numbered. I see that a number of companies are beginning to understand this and are specialising in areas beyond training. This is an interesting area worth further exploration.

If you held a budget and could find areas of commonality you would merge budgets where possible, outsource departments (to take them off-balance sheet) and generally cut-back wherever you could. Convergence is truly arriving and it will have consequences on the learning sector.

On your blog on leaders Donald, the learning industry has always made capital from 'intellectualising' training. As a deep pragmatist I deplore that but both understand the human need for 'answers' in areas that are not black and white (as all human endeavours are) but also I have enjoyed the catalyst for deeper thinking - I like a good discussion and am often the heretic.

I have a simple but strong view: leadership is about having strength of opinion and purpose for the direction of the organisation i.e. as a leader you convey purpose and direction towards meeting your organisation's goals, working with your people to give them purpose and direction and providing support with business contacts and mentoring to achieve the global aims. In my experience, too many 'leaders' are ex-sales (too true) and live in a strange virtual world in their heads where they are kings and others are serfs. In other areas in life they would be classed as Narcissistic and be committed to care but in business too many are seen to be leaders. They are by virtue of the fools that follow but not by the spirit of the meaning.

Anonymous said...

Teachers must show their students how they can cook a (tasteful) credit crunch.

Anonymous said...

Excellent and (unfortunately) timely thoughts Donald.

It’s about identifying the client’s PAIN and addressing that - as you conclude. The same message is true for all service providers, has been so perhaps for ever, and in no small way will greatly impact the events industry that I am in as well.

Companies and training departments are already closing, and the loss of internal training resources will gather pace over the coming months. In theory this should make e-Learning more appealing for our new more austere climate, but I believe that most of those that have avoided it in whole or in part until now (mostly for good reason) will continue to do so.

Just like our clients, those that survive and even GAIN will be those that do indeed focus on supplying what the client actually wants/needs, rather than on getting the client to buy what they want to provide.
This is nothing new of course.

Exciting times?