Training Need Not Fall Off a Cliff As It Did In 1986!

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It has often been said that a CEO can quickly increase margins and the bottom line by slashing two divisions of a company: Product Development and Training & Development.  This essentially sacrifices the future for the present, but the demands of investors today often outweigh the long-term growth of the company (especially when that will inevitably be the next CEO’s problem).

While this sounds incredibly short-sighted, it is common practice.  With oil prices half of what they were last year, and natural gas in the U.S. less than $4 dollars/ MMBTU, cash has quickly become tight for most companies across the Oil and Gas sector.

The price collapse of 1986 eerily mimics the decline of 2014, with similar drivers and comparative decline in prices.  Back then, the decision was made by large corporations to freeze hiring and cease training, all in the name of surviving the maelstrom.  Thirty years later, we are feeling that freeze in what we call the “Great Crew Change” – a knowledge gap in those ready to retire and those who aren’t.

So, are we facing the same challenge?   Will there be a “Next Great Crew Change” of the 2030’s?  I don’t think so.  There is one important difference between then and now with regards to T&D: online learning technology.  Since 1986, e-Learning has become a tried and true mainstay of training, and has proven to be as effective as Instructor-led training on most introductory and intermediate courses.  Rather than cutting the T&D units completely, the focus should shift to maximizing ROIs, and there is no better way to do so than by doubling-down on e-Learning.

While there is no direct way to calculate ROI for T&D – it has been the Flying Dutchman for many of us – we can make qualitative assessments of ROI for various learning modalities.  Every course can be evaluated qualitatively on cost per-person versus net-benefit-per-person.  These metrics are shown in the following matrix:e-learning, oil and gas, oil and gas workforce, talent management, training

The lower-right corner is the optimal place to focus development efforts – lots of bang for your buck, which makes C-level executives happy, and ensures the survival of the T&D team.  The upper-left corner is the least efficient, and the remaining quadrants are of intermediate ROI: better than the upper-left, but not quite as good as the bottom-right.

Adding the various modalities, we can see where different ones lie:

e-learning, oil and gas, oil and gas workforce, talent management, training

Introductory in-class training is clearly the loser in this battle: the effectiveness of teaching basic information is high, with only a slight increase in benefits.  It can easily be replaced by simple e-learning with far more efficiency for the cost.  Increasing the complexity of instructor-led training gives an incremental rise in cost, but a significantly greater result.  Indeed, certain topics, even in times of woe, need to be taught in traditional learning environments.

The intriguing part, however, is the bottom of the graph – those in orange.  Simple e-Learning can cover a significant part of low-cost and intermediate benefit for learners.  Increasing the cost and the benefit is Adaptive Learning, which is e-Learning with an assessment to check for pre-existing knowledge.  Blended learning is a great methodology; the benefits of combining in-class and e-Learning elements increase learning retention, while reducing the cost.

The big winner in the chart, however, is Just-In-Time Learning.  This is based around the concept that you can learn how to do a task immediately before doing it; it is focused, targeted, and extremely effective.  Learning at the time of task, rather than weeks or months before, is far more efficient.  How can you achieve Just-In-Time learning?  Corporations need a library of short, precise, and accurate content that can be quickly retrieved as needed.  This can be achieved by building a Self-service Knowledge System that contains thousands of elements at learners’ fingertips.

The drop in prices heralds the “Golden Age of E-Learning”: the time has come for T&D managers and executives to embrace its apotheosis.  Whether the learning is blended, Just-In-Time, or straightforward e-Learning, the increased ROI is a compelling argument for any T&D department manager to make for their executives.  It is the perfect compromise:  increase training efficiency today, while ensuring a robust competency development pipeline for the future.

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Pete Photos

Dr. Peter J. Photos is IHRDC’s e-Learning and Content Manager. After receiving his undergraduate degree in Chemical Engineering from Princeton University and a Ph.D. from the University of Pennsylvania in Chemical and Biomolecular Engineering (and returning to Princeton as a postdoctoral advisor), he began in the oil and gas industry in 2004 as a trainee at the Schlumberger base in Macae, Brazil. Since then, he served as an engineer at Schlumberger in Well Completions and Productivity, Sand Control Tools, and Sand Control Pumping, including a one-year tenure on the frac vessel DeepSTIM III in the Gulf of Mexico. He then worked as a Senior Product Development Engineer, and completed his tenure with Schlumberger as Field Manager for Sand Control in Malabo, Equatorial Guinea. He continued his work as a technical and strategic advisor for several startup companies in the industry. He holds numerous U.S. and international patents related to the use of micro- and nano-particles in the oil and gas space. His technical expertise includes nanoparticle self-assembly, bio-nano interfaces, and particle packing dynamics, as well as upstream oil and gas exploration technologies. He is the author of more than 10 peer-reviewed papers.

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