The 2008 global economic meltdown was a watershed event that has transformed the corporate landscape and from which no country, company or corporate function (and few individuals) emerged unscathed. This includes training and professional development.
Governments encountered crisis, entire industries (such as corporate finance, banking, real estate, insurance and automotive) have been rattled and pillars of the corporate community have failed. In fact, even with the generous exclusion of Freddie Mac and Fannie Mae, almost half of the largest twenty bankruptcies in history occurred in the three years following 2008 .
We don’t remember the corporate world as ever being easy prior to the meltdown, but the challenge for corporate survival quickly rose to the greatest level since the Great Depression of 1929-1933. While things have substantially improved in recent years, it is a certainty that the foreseeable future will be more challenging than the recent past.
What the Meltdown Means for Corporate Leadership Training
For all corporate functions, including leadership and management training, there will be intense pressure in the current and future environment to prove our worth or be quickly sidelined. The unique challenge for learning development training programs is that, in general, we have not been seen as directly supporting the corporate strategy or contributing to the bottom line. A recent McKinsey study reports that:
Even worse, data to disprove these perceptions is mostly non-existent, as only eight percent of corporations even track training’s return on investment.
Although these numbers will not surprise professionals in the training field, they would be stunning to those in other functions. It is hard to find any other corporate function that is less measured and relies less on business performance analytics to measure results or drive performance.
Finance professionals monitor receivables, turnover and sales (often daily or even real-time); manufacturing monitors production levels, costs and quality; research and development monitors pipeline time, costs and impact. Training and professional development stands alone as a function that is operated largely separate from impact measurement and even more separate from bottom-line results.
As leadership development consultants, the global meltdown gave us a unique choice. We can hunker down until the winds of adversity lessen (and training budgets come back up) or we can step to the plate and transform what we do and the value we add. The choice is ours.