Training Budgets in Tough Global Economic Scenario

Contrary to the popular thought of decreasing training budgets and productivity caps, I feel the reverse is the answer. Here’s my point of view.

In a week when Lehman Brothers bit the dust, and Merryl Lynch put itself up for sale at a fraction of its market value, it is hard to argue that everything is rosy on the corporate front line.

I would not like to be the learning leader at Merryl's asking the CEO if it is business as usual for learning.Those pleas for mercy may fall on deaf ears! But for most of us it is not quite so dramatic or traumatic. The environment has got tougher, budgets are tight and an expansionist view of the world does not seem quite so appropriate.

Big new ideas do not receive the ready reception they once did and the watch word has become caution. And 'soft costs' are being hacked at. At this time, a learning leader has to move fast into anew kind of role if he or she is not already there. Make that work in tough times, and you will be well positioned for the upturn and beyond.

Here are a few critical behaviors that will make life easier for training functions, and change the relationship between learning and the organization you work for.

The first is: talk the language of business. If you don't already, then now is the time to start.Everything you do should be related to the overall business targets and objectives. If they change so do you. Plunging on regardless will make learning look disconnected and a 'soft' cost that can be safely cut.

Change your approach: get away from how many people will participate and define what quantifiable value you will add. Do not register enjoyment/feed back but register impact. In changing times, change what you say, but also what youdo.

It is always a good idea to offer up some budget sacrifices rather than fight the inevitable by fair means or foul.The faster you do this, the more kudos you get and the more you look like a team player; an insider. If you prioritize your programs by business impact,you can let someone else draw the line for you. The emphasis should be on cash saved against benefits lost and some of those benefits will be vital but intangible ones like continuing staff good will; maintaining optimum performance; creating a sense of resilience about the place.
When CISCO had to lose almost half its staff during the dot.com bust, theCEO, John Chambers, actually increased the learning budget. His logic was thatthe remaining staff had to pull CISCO back to profitability and marketconfidence and therefore he had to invest in them to make sure that theybelieved in CISCO and had the best possible advantage when they went into themarketplace. It was partly about increasing knowledge and skills and partlyabout galvanising his diminished workforce to perform better. A similarstrategy was adopted by RS Pawar the then CEO NIIT Ltd. He called it “ProjectRejuvenation”.

When an organization is realigningits business strategies, no learning operation should be pulling out its oldplan and drawing red lines through parts of it. The realignment requires a newengagement and if that is made a team process it helps everyone see what thefuture might hold, and feel that their contribution is relevant and valued.

When a government department startedto absorb a range of functions that had been handled elsewhere, the chieflearning officer presented the executive board with a totally new approach tolearning, focusing on getting the new organization functioning as a single unitin the fastest possible time. This unprompted activity brought the learningoperation on the inside of change rather than being its victim. Alter what youdo in the light of where you now find yourself.

Ironically this is the very time toget close to the business. Working along side teams under pressure,understanding what it is like at the sharp end of change, and getting a clearunderstanding of what is important, and where the needs and opportunities lie,is at the heart of a successful learning team. When everyone else is buildingthe barricades, the networker stands out.

Really start to motor on evaluatingthe business impact of everything you do. If you can quantify that in bottomline terms so much the better, but the fact that this is complex does not meanyou should be avoiding a wide view. It may be about skills or competence, andyou may be able to work out the cost of non-compliance or failure; but it couldequally be about attitude, encouragement and sharing of insights and knowledge.A report that defines the impact helps define the role of learning, andillustrates that it can add value when times are good, and when times are bad.

Handling Price Objections

You are talking to a customer andafter you present your product, service or solution, s/he asks, "Whatdiscount can I get?" or "What can you do about the price?"

Think before you speak otherwisethis innocent-sounding question will cost you money right off your bottom line.While it's tempting to offer a discount or better price resist the desire to doso. Here's why.

First, just because someone asks youfor a better price, does not mean they expect to get it. Some people ask for a discount because they have been toldto. They are often uncomfortable doing this and will seldom press the issue.However, professional buyers and key decision-makers know that many sellerswill drop their price at the first sign of resistance so they ask everyone fora discount-and they can be aggressive in their approach. Plus, experiencednegotiators lose respect for people who drop their price too quickly. Standingyour ground and refusing to cave in right away is also a show of strength andexecutives respect this type of behaviour.

Second, when you drop your price too quickly, you teach your customer to repeat that behaviour in future transactions. Remember, everything you do now affects your customer's behaviour toward you in the future. When I first started my sales career, I gave a client a discount on a package of services.The next time he contacted, he demanded that same discount which put me in a somewhat precarious position-did I give the same discount or risk losing the sale? A business executive once told me that she knew which of her suppliers. she could browbeat into giving her a better price and she always took advantage of that perceived weakness.