Thursday, August 18, 2011

Maximizing Your Training and Professional Development Return on Investment

How do you value training when your core business is, in essence, built on and around new products and services that involve ongoing training? For example, what do you do if you provide hosting services, cloud hosting, webinars, or learning management systems?

It requires an entirely new way of looking at education in the organization. Training and education used to be the first budget items to be cut in an organization’s budget, particularly among companies that tended to look at education and training as a reward, perk, or worse, a junket. However, the old notions are moving aside as the pace of technological advancement accelerates and training / education become an integral component of the products and services that an enterprise or an individual offers.

For example, if your company has expanded its exploration and development operations and has decided to enter the wild and woolly world of resource plays, it’s imperative that the geology and geophysics staff gain a solid understanding of horizontal drilling, image logs, 3D seismic, pore pressure, and hydraulic fracturing. Without a good working knowledge of those areas, it will be very difficult to make good decisions or to evaluate opportunities.

Your Company’s Ever-Evolving Products and Services: When Training and New Product Development Are More or Less the Same Thing

Training and education on specific topics related to the company’s core business are mission-critical to the general operations of a company. However, the idea that the company offers products and services that it is continually creating and implementing on the fly is rather revolutionary. It’s a characteristic of today’s climate that we are constantly learning / evolving; and clearly the risks are perhaps as high as the rewards.

If your line of products and services is evolving quickly, and you’re counting on innovation to fuel sales and build market share, where and how does the knowledge transfer take place? The flow of information can be trickier than it first appears, especially when the new lines evolve quickly, and may be in the mind of an individual / creator, who may not be particularly adept at communicating his/her vision in a way that is accessible -- either physically or cognitively.

Training and Professional Development Result in Cost Savings

Reducing waste and cutting unnecessary expenditures are time-tested ways to have a positive impact your company’s bottom line. However, cutting costs should not be a “slash and burn” operation. You may be cutting core capabilities or reducing capacity in areas where you need to be building capacity. But, how do you make prudent cost-cutting decisions? Often, it’s a matter of having sufficient knowledge and insight -- insight that can be gained by successfully completing training and education. An investment of $20,000 in providing training to a group of decision-makers in the company could result in $100,000 or more of cost savings in operations.

Training and Education to Avoid Accidents and Mistakes

Further, you could avoid million-dollar mistakes. The challenge is to legitimately measure the cost savings directly attributable to the training. Companies that are concerned with their “education ROI” look at the company’s organization-wide spending / cost reduction decisions, and then they match the areas of training with the areas where the cost decisions have taken place.

Example -- Hydraulic Fracturing: Skimping on Training Could Result In Environmental, Political Nightmares

Many European countries are considering promoting exploration for shale oil and gas, which will necessitate large hydraulic fracs when the time comes to produce. Horizontal drilling will also require large volumes of drilling fluid. What this means is that there is a possibility of accidents, spills, and contamination due to poor decisions and human error. Thus, training / education -- of the service companies, the operators, and the regulatory agents are mission critical.


The area of compliance gets into the issue of what happens if you fail to provide evidence that your crew and your professionals have secured the necessary licenses to demonstrate competence in areas that required specialized skill and knowledge. You put yourself and your company at risk if personnel do not have adequate training. Further, you may not be able to obtain licenses or permits.

For example, in order to obtain drilling permits it is often required to demonstrate that the personnel involved have successfully completed training in certain areas, which could include HAZMAT, safety, environment, confined spaces, and corrosion control training.

Cause and Effect: When There’s a Success, How Much Credit Should Training Get?

When a program is successful, there is no shortage of people eager to take credit. Likewise, when a new product or service is profitable, everyone likes to be the originator of it. However, there are often multiple factors and more than one origin of success, several of which are often overlooked. Training is one of those. For example, a creative problem solving course, combined with training on the use of micro-seis and 3D seismic might lead to new ways to envision a reservoir, with the result of more prolific wells.

Training and education clearly played a role, but that role is often overlooked in favor of the technologies, the new products used, and human capital (the technical team, along with leadership). However, it’s easy to leave it out of the equation. The tricky thing about not acknowledging training’s positive role is that when it is cut out, it’s not always obvious that part of the reason for a company’s lackluster performance has to do with the loss of training.

Making a Case for Innovative Training Approaches

It is tempting to think of training as a place where you fight back the urge to sleep as you passively watch a person behind a podium mumble in a monotone as he/she advances all-text slides in a PowerPoint presentation. The most effective training, however, is situated and it is collaborative.

Using Virtual Libraries

What that means in operational terms is that you’re most likely to remember and apply knowledge you’ve learned on the job, in the real-life situation. Further, you’re more likely to be able to synthesize and problem-solve if you’ve learned the material while interacting with others. Share ideas, listen to theirs, and work on problems together. The team approach works in the training space as well as in the work space.

As you consider training, think of it as mobile and on-demand. Seek out online educational solutions, and see how much you can do with your mobile device(s).

Then, above all, as you or your company approach training, look at it from a revenue center approach (rather than a cost center). How can you leverage training so that it actually translates into a revenue stream? Be creative, and be unafraid of unusual combinations.

This column first appeared in AAPG's Division of Professional Affairs newsletter, The Correlator.

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