Academic journal article Human Resource Planning

Designing Management Training and Development for Competitive Advantage: Lessons from the Best

Academic journal article Human Resource Planning

Designing Management Training and Development for Competitive Advantage: Lessons from the Best

Article excerpt

"In the 21st century the education and skills of the work force will end up being the dominant competitive weapon."

[Lester Thurow, Head to Head, 1992].

Organizations can buy skills through hiring, or they can develop skills through training and development (T&D) activities. This paper focuses on strategically aligned training and development systems that advance and sustain the organization's competitive position in its market. Traditionally, T&D systems were relegated to narrowly defined support roles, where individuals were trained around current job-based deficiencies or predicted knowledge and skill needs. A few exemplary organizations, however, view a workforce with superior skills as a primary source of sustainable competitive advantage. In these organizations, T&D becomes the critical means for creating readiness and flexibility for change across all organizational levels, and there are strong linkages between all facets of the T&D system and the strategic leadership and planning processes of the business. Readiness and flexibility are achieved largely through supervisory, management, and executive training, as these individuals set the boundaries for modification and continuous improvement of existing organizational practices.

Investment in T&D is highly variable across U.S. employers. In 1995, U.S. organizations allocated approximately $52.2 billion for formal employee T&D (Industry Report, 1995). It has been estimated that over half the money invested in training annually (approximately $27 billion) is spent by just 15,000 organizations, or merely 0.5% of all U.S. employers. Among those, only about 100 to 200 spend more than 1.5% of their payroll on T&D (Stone, 1991). These disproportionate expenditures are made because of the presumed market returns on the investment in employee development and learning.

Despite these presumed benefits, few prescriptions are available to executives on how best to create systems that are aligned with, and actually advance, the organization's strategic agenda. Although much has been written about the design of T&D systems from an instructional perspective, little has been offered on how to include the T&D function in the leadership agenda or the strategy implementation process. Yet, organizations that have "best-in-class" T&D systems offer certain insights. This study was designed to understand and describe how these best-in-class organizations design and utilize supervisory and management T&D to achieve and sustain competitive advantage.

Method

Benchmarking is frequently used to identify the practices of organizations recognized as leaders and innovators in a particular area (Xerox, 1992; Weatherly, 1992). Once these best-in-class practices have been identified, other organizations can use them as a comparison point for assessing their own progress. Thus the goal of this paper is to collect benchmark information and derive an integrated model of how the best T& D organizations structure, implement, and conduct management-level T&D.

The benchmark organizations in T&D were selected if included in at least one of the following five sources: Malcolm Baldrige National Quality Award winners (1988-1992), FORTUNE Magazine "Top 20 Managed Companies" (1990-1993), American Society for Training and Development "Corporate Award" winners (1985-1992), Training Magazine "Readers' Survey Award" winners (1992), or identified by subject matter experts. A total of 62 organizations were thus identified and contacted.

Forty-two percent of the organizations (26 of the 62) served as the final benchmark sample by submitting written information describing their organization-wide T&D practices and by participating in a structured 45 to 90 minute telephone interview. Responses to the structured interview questions were summarized and tabulated into means and frequencies, where appropriate. …

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