Over 30 years David Forman Ltd claimed to have trained around 70,000, mainly sales, executives. The company was New Zealand’s undisputed leader in the sales and negotiation training niche and top-three player in delivering management development courses. But as its virtual demise last year clearly illustrates, there is sometimes huge gulf between selling and profitability.
After buying the ailing training icon during the liquidator sell down in February last year, former advertising guru, David Glover and co-owner Steve Scott set about putting accountability back into the David Forman brand. The courses they now offer may not have changed much but, total revamp of the enterprise’s business processes delivered complete brand relaunch, new management team, 60 percent staff change and setting up house in new premises.
Management not content
The issue was management, not content says Glover. “The entire company was process driven. When we bought the business it took three signatures to change course booking. Having implemented new culture, attitude and new way of behaving – the business is now customer focused,” says Glover.
David Forman never actually ceased trading. The single biggest issue for the new boys on the block was, therefore, managing expenses and convincing customers there were indeed no liquidity issues.
Glover knew nothing about the training business before the purchase. There were, however, strong similarities with his former role as chief executive of advertising agency, McCann-Erickson. The business-to-business dynamics, staff management issues and close to the business management approach – make advertising and training complementary bedfellows.
“Management per se is extremely tedious, but my background as change agent complemented the task of restructuring David Forman. Having fallen into rut, the company had no real impetus to change,” says Glover.
Good underlying business
But why did he buy the business? After stints in London, Sydney and Jakarta over the past 16 years, Glover wanted to exit the multinational scene and settle back in New Zealand. He was convinced that with better management David Forman represented good underlying business just waiting to be turned around.
Glover and Scott asked themselves what they were really buying and concluded that the jewels in David Forman’s riverbed, despite mismanagement, were strong brand and an established database of customers. In the previous three years the company had run training courses for around 5000 New Zealand organisations.
On taking over the business they bought significant forward bookings for 2003. Among the other gems they discovered in the business were some valuable intellectual property and some highly talented tutors.
Challenge established thinking
Glover enjoyed the process of leading into business he did not know well. It provides the opportunity to “ask really stupid questions” and challenge the established thinking. Time spent restructuring the business drove training throughput to 1500 people, quarter less than previous years. But Glover expects to double the business this year by refreshing tired courses and adopting more open and collaborative approach to providing new course content.
“As well as implementing new culture, we’re trying to set up model workplace in our own right – much of that means hiring the right people. Changing the former culture meant going from ‘rock up to course next Tuesday’ mentality to renewed emphasis on career development. The 95 percent referral rate we’re now receiving from course participants suggests we’re on the right track,” he adds.
Real learning skills
In adopting process-driven approach the business had lost sight of founder David Forman’s initial thinking. former teacher and psychologist, Forman pioneered (at least in New Zealand) the introduction of psychology into sales and management training. Glover now wants students to exit his courses with real learning skills, as opposed to just feeling good about the programme.
“You can’t just come and attend course and forget about it. Training is not about knowing something, it’s about doing it differently. As well as completing feedback forms immediately post-seminar, all participants complete series of up to four transfer assignments over several months that measure their knowledge retention and skill practice at the workplace. Our data records show substantial increase in successful skills application,” he enthuses.
Raising accountability
According to Glover, David Forman’s new culture has significant role to play in raising the accountability stakes in the national management training debate. He says until more companies actively seek to measure training, two sad realities will continue to drag its effectiveness down.
Without relevant measures, companies will:
• continue to discount the true impact training has on business and,
• perpetuate minimum barriers to entry for would-be training providers.
Results of recent Watson Wyatt study suggest that he’s right. The study concludes that bad training can actually damage shareholder value. Not surprisingly, results from an Otago University study suggest that top-performing business service sector companies believe strong brands and motivated and skilled staff are the keys to gaining competitive advantage.
But many companies still see training as cost. According to Glover, training is one of the first things to be cut from discretionary budget when times turn down. He suspects this explains why an American Society For Training & Development study showed that only 10 percent of US companies bother to assess the true effectiveness of training.
Making difference
There is more to training than ‘touchy-feely’ outcomes, says Glover. And if training doesn’t make difference to business – it’s waste of time. “I don’t think this country has yet got its head around the real value of staff. It’s what people know and do that makes difference. The single biggest waste of training dollars is when management spends money on training but doesn’t understand why.”
So why has it taken so long for organisations to accurately measure the value of training?
With traditional learning environments significantly distanced from business there’s never been need or desire to gauge the level of return. “Training is bit like motherhood, everyone’s in favour of it. Yet few companies want to know more than whether the learning experience was positive,” says Glover.
To improve accountability from training, he suggests companies ask:
• Did staff learn anything?
• What behaviour has changed due to learning?
• What was the return on the investment made in training?
No quick fix
Having only put his feet under David Forman’s management desk last May, Glover still has lots to do.
After completing the company’s total turnaround, he plans to spend time raising the broader training issues at national level. The fact that there are 55,000 management textbooks available on Amazon.com is, he suggests, pretty good indication that the latest ‘bullet’ simply doesn’t work.
“Career training and development directly impacts New Zealand’s international competitiveness. Unless we have world-class businesses, we’ll become third-world country. What we desperately need to see are lot more self-managing initiatives demonstrated by staff,” he says.
Non alignment
Glover thinks New Zealand’s ratio of one human resource person per 100 employees illustrates the lack of HR and business issues alignment in local firms. Too many organisations remain unconvinced that career training and development works. Others view training as perennial dilemma, on the one hand afraid that people will leave if they’re not given training and on the other scared that up-skilling will hasten their pursuit of better job.
Glove
