Training organisations: Is your business model out of date?
Those of us still providing training as an event are really feeling the squeeze. Delivering courses for day fees simply doesn’t make business sense anymore. Incomes are falling and clients are exploring alternative training solutions driven by performance results or free alternatives to formal training.
Could now be the time to review your business model and explore new, more profitable ways of working with your clients?
How do you make money?
For most learners, the training experience involves - traveling to a venue for a set period of time to take part in a standardised set of activities delivered by a subject matter expert. They share their experience, best practice and creates some slightly simplistic case studies and role play. After the training or learning experience, the learner then goes back to their workplace and at best have a meeting with their manager to discuss what they have learnt. Learners often have great intentions about putting their new skills into practice but frequently revert to old habits, particularly when under pressure. Put simply; with no time or processes dedicated to implementation there is no internalisation of the learning process and it becomes impossible to demonstrate a business impact.
In the current climate it is becoming more and more unlikely for training purchasers in the corporate world to get a training budget for an intervention with no measurable impact. This means that any training organisations working on the model described above is not offering clients what they want.
How can training organisations change their business model to more effectively serve their clients AND generate more income for themselves?
In the course of my research I came across Alex Osterwalder’s - business model canvas which really took my attention.
It is a great little template that how one single change can be a catalyst for a cascade of transformations throughout the business, from value to pricing structures and fee collection.
Osterwalder’s canva divides businesses into nine blocks with YOUR value proposition (service, type of training, coaching, ….) located at the centre. In this article, I use the canva to present some alternatives to the “standard” training business model but there are millions of possible combinations based on your market, your clients, the type of training you are developing and the specific learners you are working with.
It is time to challenge the status quo, encourage training suppliers to take back control of the relationship with their clients and ensure delivering value to the clients.
Whilst working with the canva, I realised that most of us in the training world we sell “information” in a variety of formats namely:
- Best practice
- Know how
- Case studies
- Subject Matter Expert’s experience
But at the end of the day, it is information! It is not about the specific learners’ challenges and their organisation’s context.
So much of the vital stuff is left to the learner to figure out on their own, such as:
- How the information is applied by the learners to become more performant at work
- Planning and anticipating challenges in specific environment
- How they use the content to transform their behaviour and shape processes in their organisations
- The operational challenges of trying something new
- The hard process of implementing change including fall back, mistakes and unplanned outcome
Information is definitely part of the learning experience BUT it’s a seriously crowded market place from Google to MOOC t and YouTube, E-learning, Linkedin, to name a few. Many players in this market are offering quality information for free, whilst they generate income through other revenue streams. Playing in the mass learning information market can therefor lead to price wars and reduced margins.
Being associated with the information market is likely to lead to a downward spiral; in order to maintain income it becomes essential to deliver more training, resulting in the courses become less and less bespoke. With the focus on quantity, it is harder for training organisations to maintain that special bond with clients and learners - making the case for automated learning even easier.
The value propositions: what is real value for your clients?
How then can you increase your margin, allowing you to deliver higher value training to a select group of fewer clients? Something needs to change right, but what?
A little pre-work followed by a webinar just won’t cut it. Cosmetics changes do not transform the substance of the training you are delivering.
Going back to Osterwalder’s model, it is clear we need to focus on added value for the clients. It varies for each individual training business but as a general rule it includes:
- Increasing performance ( financial, customer satisfaction, product and service quality)
- Retaining and growing talents
- Changing behaviour: better time management, creative thinking, communication
This is the type of impact that clients are looking for and willing to invest in. Sadly it is also the type of impact many training organisation are reluctant to commit to, because they are still relying on the training as an event model, where it would simply be unethical to promise a business impact after a day or two’s learning out of the workplace.
Adding value in a digital and complex environment is not about giving answers, it is about a creating a thinking space where learners are empowered to find their own solutions.
Shifting Your Key Activities
When asked, most training organisations will say their key activity is to create and deliver courses. As income is derived mainly on delivering, it stands to reason that as little time as possible is spent customising each course.
As previously mentioned, the market for standardised content is highly competitive and driven by mass learning. Even if you lose out on sleep, you can’t beat YouTube or Coursera’s MOOC!
what can you do that youtube can’t? Engaging in conversations with your clients and their learners over longer periods of time is key. Take the time to develop a relationship that enables learners to explore even their most personal challenges and feel supported through their journey of change and development. Digital tools can efficiently support trainers to maintain their relationships without necessarily even sharing a room: skype call, closed learning communities, a simple email or a phone call. It is about being available for conversation outside the classroom, coaching, reassuring, questioning, challenging the learners and helping them reflect, grown and develop through personalised interaction in a group or individually. All this helps make them feel accountable to you and allows you to support them through the challenges of implementing the training and changing their behaviour.
Key conversations to have from the start
Most of the activities above involve conversations:
- First with the training purchaser; taking time to ask the right questions, framing the learning experience and ensuring the need analysis has been conducted scientifically.
- Then learning as a series facilitated conversations with the learners: to support them through their own changes and finding their own solutions: individual coaching, group coaching, peer collaboration, self-reflection,
- Finally a series of conversations spread over time to validate and monitor results including both training purchaser and learners.
So a training businesses main activity is shifting from delivery of information to conversations
Training buyers shop around to get the best price, from e-learning to LMS and other self-study packages. Their organisations require them to rein in expenses or to demonstrate a clear business impact … (feel like you have heard all this before?). That means when they buy training, they pay as they go! Sometimes it is a big trolley and sometimes it is a little basket.
When a training organisation works on shifting the value for the client, they also transform their relationship with the client. Suddenly, rather than the quick sale, it becomes a partnership developed through different stages. Building and developing trust can only happen in a truly collaborative process.
It will take time to build trust as many organisations over promise and under deliver. The piloting step is at the heart of showcasing training supplier know how, as well as your ability to listen, consult and transform.
Conclusion: Revenue stream
It is customary in the L&D industry for training organisations and trainers to send their invoices after the course has been delivered and get paid somewhere between 40 and 60 days after delivery. However with longer programmes which focus on behaviour change, the preparatory work may have to start some 3 to 6 months before the delivery.
To manage cash flow, training providers may have to significantly increase their prices, and in doing so of course have to demonstrate added value. One alternative is to learn from other industries and explore different charging mechanism:
- Payment plan with first payment prior to the start of the course
- Subscription, packages, contracts
- Learners support: weekly/monthly packages
Most training organisations are comfortable discussing programme content at length but are far less so when it comes to the payment side. There is still a taboo to talking about money. However, most would be surprised how easy this conversation becomes when a client trusts the value of the training deliverend and is confident in demonstrating the impact to the rest of the organisation.
A client’s value centred business model example
Previous blog posts below
RIP: It is time to bury your classroom training?
“The King is dead, long live the King” was how the death of a French King was announced in 1422. It meant the end of an era and the beginning of new one, preventing an interregnum and an empty throne.
Is the traditional classroom, combining the delivery of information and short rounds of practice, dying. In truth, yes but it has been dying for years and only kept on life-support by those who see training as a single event or a sticking plaster.
At a time where information is readily available to anyone at any time, it is seriously short sighted to imagine that professionals of all types will take time out of the office and pay large amount of money to attend a course like it was in the 70s or 80s. Professionals are time-pressured and expect some form of work/life balance so many will choose an online solution simply because it is likely to be their only chance to have access to the professional development they need or want.
Does it now mean that all learning will take place in front of a computer? Hell no! Actually it has been demonstrated that 70% of all adult learning is made at the workplace through self-discovery, research and via colleagues (and managers) interacting and collaborating*.
In order to preserve its life, training needs to be more innovative to avoid not just an empty throne but, worse, an empty delegate list, but what does innovation look like? It is, on the one hand, taking learners through a journey of self-discovery and helping them to uncover the skills and competences needed through activities and challenges. Some innovative trainers create leadership courses using cooking or art environments, whilst others will enable better communications through role play, or coach a group in a real life environment.
What’s innovation look like to you? Let us know @SyncSkills #GoTheDistance Visit http://syncskills.net/prg/ today and start thinking about your online strategy
*@CharlesJennings, Author of 70:20:10 Towards 100% Performance. Charles-jennings.blogspot.co.uk
Think outside the box
In our previous blog we debated the need to inject life into training so we’re not mourning its passing – click here to read this post – and then discussed how innovation can be the life-blood in training.
In this second blog, we question what do all of those innovative, and often award winning training programmes, have in common?
They are driven to achieve specific and measurable results for specific learners in a specific environment. An award winning training is not about information which is readily available for the masses in free or affordable format: from social media, webinars, e-learning, MOOC or anything else produced for mass learning (even a good old book delivered to your door by Amazon!). And it works! So where are training organisations going to add value to their learners? What can they do to still be relevant in 21st learning century adult education?
Many training professionals believe that only a classroom course can achieve learning outcomes. They are wrong! It has been demonstrated many times that the format of delivery will have no relevant impact on the learning (See Ruth Colvin Clark presentation here https://www.youtube.com/watch?v=TuVakbMSPp4&gl=BE
So what is happening to trainers and training organisations who bury their heads in the sand and refuse change? It is likely that, eventually, large HR contracts for innovative-driven training will pass them by. They will be unable to satisfy clients’ curiosity to experiment and will be focusing on a forever shrinking market. Their offering will become less and less competitive and be forced to lower prices which could drive them out of business.
The Early Bird catches the worm…
It is not too late to start thinking outside the box. Many are talking about innovative learning but little are actually truly living it. Starting with online learning now gives you a head-start over many of your competitors. It is still time to experiment and make little mistakes which go unnoticed. Chances are 70% of your clients are likely to admire your innovative mind but stick to what they know. However you are going to retain the 30% who were about to switch to a more innovative competitors and you may even get some more clients. You are stepping into a virtuous circle - setting you up as a trainer able to manage a variety of delivery formats and today, in Europe, there are only very few of you …for now…...
So be up with the lark and get going!
Set yourself up on LinkedIn and Twitter or on any professional social media platform. Why? Because your learners want to be part of a learning communities. Your role as a 21st trainer is to facilitate learning over a long period of coach, to answer questions and coach your learners into identifying the best solutions for their organisation and their role. This can be done in a classroom, in a virtual classroom AND in a discussion group . Learn how to interact, introduce yourself and ask questions in this environment and you will be surprise how much energy you will inject in the discussion with your trainees.
To help you get started we have selected a few conversations likely to interest you and here are some of the #hashtag to follow on twitter: #Onlinetraining, #training, #management #learning
Linked in groups: HR.com, Learning, Education and Training Professionals Group, Human Resources (HR) & Talent Management Executive
So you may believe that none of your course will never be half as good online but what if there were a little chance that you were wrong and we were right? Join the conversation at #GoTheDistance
Visit http://syncskills.net/prg/ today and start thinking about your online strategy