Corporate Catastrophe: Why Continuous Learning is the Key to Success

Crisis management often kicks in after angry villagers have descended upon the village. Why?  Because most companies chose to address the root of a crisis only after a major fallout has occurred. Generally, the solution is corporate training. Starbucks, for example, experienced two very public incidents before deciding to close 8,000 stores for racial bias training, resulting in approximately $12 million worth of lost sales. CEO Kevin Johnson said in response, “This is a management issue and I am accountable to ensure we address the policy, and the practice and the training that led to this outcome.” This came after the company withstood a barrage of negative press, in-store protests, and social media blasts.

The question that all companies should ask here is not, “How could have Starbucks managed their crisis better?”  but “What could Starbucks have done to prevent it?” Many village uprisings (aka crises) can be prevented by making use of effective learning strategies, but the key is continuity.

Continuous Analysis

Part of preventing crises is proactively understanding your customers and employees. Wells Fargo, for instance both ignored employee complaints of impossible sale goals and customer complaints of accounts opened in their names without their knowledge, resulting in Wells Fargo paying out $3 billion in settlements. Warren Buffet had this to say about the crisis, “They obviously had a very dumb incentive system … and the big thing is they ignored it when they found out about it“.

However, when there isn’t an intentional disregard of organizational challenges, continuous needs analyses can reveal budding problems before they bloom with disastrous consequences.

Metrics & Performance Indicators

Business units, particularly in sales enablement or manufacturing compliance tend to have their own metrics around performance. That data may offer insights that would help predict crises. So, learning and development teams should make use of the information floating between departments for their analysis. While each organization may have different performance data, some common areas that might warn of trouble ahead include:

1. Profit margins (Gross/Net): Are your profit margins low compared to other businesses in your industry?
2. Customer retention/turnover: Do you have low customer retention and high customer turnover?
3. Customer complaints: Is your sales revenue consistently down month after month?
4. Net Promoter Score (NPS): How likely your customers are to refer your company or product.
5. Employee questions: Can employees find answers to questions not covered by training
6. Employee Satisfaction: Do you have high employee turnover?
7. Reviews: Are there specific themes that emerge when looking at customer reviews?

However, metrics don’t always tell you how or why there’s a potential problem.  Sometimes it takes careful analysis of your village to determine underlying problems within product needs or service needs. Unfortunately, those aren’t the kinds of problems that training can solve.

Continuous Learning

That being said, crises often arise when employees don’t have the proper tools, training, or knowledge to help them navigate difficult situations. Taking extra steps to provide these things, however, can make a world of difference. United Airlines, for instance, experienced the village wrath as a result of an oversold flight. Instead of offering higher valued vouchers or transportation to the destination, airline employees chose to remove four passengers from the aircraft, resulting in one passenger being roughly carried off. The manner in which he was removed sparked national outrage, plummeting United  Airlines stock by  $1.4 billion.

As our businesses and operations change, employees will be faced with novel situations. Their ability to navigate new challenges will depend on how well their most recent training can be generalized. Unfortunately, like in the United Airlines example, at some point employees will find themselves without the relevant skills or perspective.

Strategies for Continuous Improvement

That’s why building an employee training and development strategy with a continuous learning model is critical. The most effective way to prevent training-based crises like these is to strive for constant improvement. With the data from your proactive needs analyses, design a custom eLearning activities based on a list of learning priorities — they should be ranked based on their long-term impact on the organization and immediacy.

Moreover, training events should be regularly scheduled. Deploying training in consistent intervals (e.g., once a quarter), will help instill a sense of importance around their performance improvement. You can also use these opportunities to check on the maintenance of skills they’ve acquired in previous learning experiences.

Conclusion

As long as there is a dominant human element to the services an organization provides, effective crisis prevention and crisis management must have a corporate training component. Through continuous analysis and continuous learning strategies, you can equip employees with the relevant skills to navigate novel or common situations. But, most importantly, you can ensure that performance gaps have a minimal impact on the success of your organization.