The power of incentives, combined with modern learning approaches, can create a cost effective way to develop our talent pools in an ever changing landscape.
I’ve been blessed to work with large organizations with extremely talented resources over the past 20 years. These knowledge workers are the cornerstone of the organizational competencies these companies developed, and this has allowed them to scale their business processes at a fraction of the cost. This allowed them to survive or thrive, during the transition to the internet, increased globalization, and during the global financial crisis.
However the rate of change is increasing exponentially. We are already on a period of exponential growth in the technology sector. Multiple factors are coming together to expand the adjacent possible of our IT solutions:
- Sensor based networks are grossly expanding the footprint of the existing devices
- Advances in mobility have shifted the lines in what an end user system is
- Commercialization of hacking industry and collusion with nation state resources have created well funded adversaries
- New protocols and models of connectivity
- IPv6 deployments have become commonplace
This expansion of connectivity will require us to align our systems around greater agility, leveraging software based technologies and increased automation.
This means one thing, We need to develop our people.
The skill sets are changing. As I noted, to sustain a period of exponential growth we need to retool our teams to understand the rapidly evolving landscape. If our people are the cornerstone of our organizational competencies, and the marketplace is changing rapidly, without developing our people our companies key digital assets will become obsolete and we risk our companies futures.
This has been a topic I have heard many leaders discuss. We know we need to develop our people. However, in the rapidly changing landscape that is technology, how do you prudently invest your companies time and money, in a most effective manner?
Traditional educational models for mode 1 operations are tried and true. You create a development plan for your teams, you train them in the technologies, and rinse and repeat annually. The curriculums are developed, and you obtain training budget for your teams. You then send them away for a week or two a year, and sprinkle in some VOD’s to boot. It works, or has in the past.
But this won’t scale in the near term as mode 2, rapidly developing software technologies, become ubiquitous. The following factors are some reasons we will need to change how we educate our resources
- The technologies are evolving faster than the curriculums
- Those technologies are iterating fast, resulting in rapid technological obsolescence
- There are very few vendors whose curricula are encompassing of the full skill sets required
- The benefits of newer technologies are near term, but it will take a few years to figure out which startups will evolve into long term options.
This results in a risk of erratic investment in our teams which can lead to negative ROI. We can’t afford to simply put “Butts in Seats”, we need to ensure our money is spent developing talents.
The power of Incentives
Incentives are a powerful thing. In traditional leadership modeled after Herzberg’s Motivation-Hygiene theory, recognition is considered a strong motivator (even monetary recognition, if it is tied to a result… whereas typically money by itself is considered a hygiene factor). This insight by Herzberg has been reinforced over time, most notably by the authors of the Freakonomics series which applies economist style analysis to everyday activities to seek out causation vs. correlation. What Andrew Levin and team have found is that from an early age humans are incentive driven and that peak performance can be achieved when a visualized end result is tied to a current activity.
“Incentives are the cornerstone of modern life” – Levitt, Dubner
This is also supported by two real world business level incentive challenges which had phenomenal returns on investment. The first being the Ansari X Prize. The Ansari X prize was a competition created to spur investment in space developments. The prize for the competition was $10 million dollars. During the contest over 20 applicants invested over $100 million in pursuit of the prize, with Mojave Aerospace Ventures eventually winning the prize. Following the two flights that Mojave had made, numerous companies who competed announced intentions to carry forward with their progress and pursue space travel. Thus the $10 million dollar investment had helped to kickstart the private space race.
The second fascinating incentive challenge was a challenge set out by Goldcorp. Rob McEwan took over this mining company which had been running unprofitable operations in Canada for years. In a break with all established tradition, they published their confidential geological data online, and promised up to 575k to the the teams that could find the most gold. Out of the challenge over 100 sites were found that could have gold, and over 80% of those sites yielding substantial reserves. Goldcorp has grown from a $100 million dollar company before the challenge, to a 12 billion dollar company today.
But these two incentive challenges are not the exception to the rule, history is littered with examples of achievement being the direct result of years of development and aspiration, in pursuit of an end goal. From Olympic medals to super bowl rings to the much sought after IPO, recognition and achievement are hallmarks of human drivers. What leaders need to do is find how to leverage these to motivate their teams.
New options for Curricula
A challenge with existing training classes, webinars, and online training is the ability to measure and value retention. This is a challenge because in traditional classroom settings we are paying for attendance, rather than retention. It is rare for a classroom based technology class to have an exam associated with it, and even if it does, you are paying for the class whether your team member retains the information or not.
New curriculum programs have emerged which offer advanced training in a number of computer science classes, offered by accredited universities, which are free or low cost to attend, and which you can only pass via completion of projects and examinations. These offer the ability to selectively choose classes and programs aligned to your companies developmental interest, and for which you can develop curriculum for your team members. The topics tend to be vendor neutral, focused more on open source and computer science topics, and are very up to date with from a curricula perspective.
Combining the power of incentives with new Curricula options to maximize development and return on investment
So what can this mean for leaders looking for options to cost effectively develop their teams, in an ever changing landscape? This is where we should evaluate directly incenting our teams, who complete free curricula, rather than paying the curators of the curricula itself. Or rather, as a management team, determine where you want your teams to go, line up online curricula options that offer completion validation that support this, and create challenges for your teams to take these classes, rewarding those who successfully complete them. This creates incentive for your teams to engage in taking the free curricula. And you reward those who complete the classes. And you shouldn’t just use financial incentives. The new organizational competency you need to foster isn’t around protocols and languages, it’s the competency of change and continual development.
The process is simple
- Determine technologies which impact your strategic direction
- Find free courseware which validates successful completion (Coursera, EDX)
- Create “challenges” within your organization
- Incent your teams to complete this curricula, on their OWN time
- Reward them.
A specific example is the industry I am in, which is radically transitioning to SDN, SD-Wan, and cloud. There is a plethora of free development options out there, of which Python is a good example. A use case in my industry, would be a leader who creates the “Python challenge”, finding a few Coursera or EDX classes in Python, and challenging their teams to complete them. For each person who completes the Python challenge, they could be recognized on quarterly staff meetings and with a financial incentive. This directly rewards your teams for development, while being cost effective vis-à-vis traditional learning methods. A cost analysis is below,
The costs of training 100 team members using traditional class based approaches. Note, this is the cost to offer them training, not the cost for them to retain it.
| Employees | 100 |
| Cost of 1 week of training using Traditional Means | $ 2,000 |
| Travel Costs | $ 2,000 |
| Per Employee Opportunity Cost of sending Employees to Training assuming 80k average Total Cost and 48 “working weeks”/year | $ 1,667 |
| Total Cost Per Employee to Train when Travel is required | $ 5,667 |
| Total Cost per Employee to Train when using Local Travel | $ 3,667 |
| Average cost to train 100 Employees assuming 50% Travel | $ 466,667 |
The costs of offering training to 100 team members using Incentive based approach. Note, this is the cost for completion, not for attendance.
| Employees | 100 |
| Cost of 1 week of MOOC based training | $ – |
| Travel Costs | $ – |
| Per Employee Opportunity Cost of sending Employees to Training assuming 80k average Total Cost and 48 “working weeks”/year | $ – |
| Pass Rate | 50% |
| Cost per employee if $1000 incentive is used for passing a prescribed MOOC | $ 1,000 |
| Total Cost to Offer Training to 100 Employees (when using 50% pass rate) | $ 50,000 |
| Total Cost to Train 100 Employees | $ 100,000 |
As can be seen, the ROI of a well thought out approach to our team members development, using incentives and recognition for achievement of open source curricula, rather than paying a training company for attendance, can create an ongoing culture of learning for our team members.
Conclusion
The times they are a changing. An idea that our existing modes of operations will scale to handle exponential technology growth is lacking in foresight. The companies that begin to successfully make the transition to higher development trajectories of their knowledge based workers will have competitive advantage in agility, cost, or both. Leveraging developmental funds appropriately can both spur innovation within your company, and create a culture of development, all while increasing your employees earning potential.
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