In a world of accelerating change, continuous learning is the most important long term investment a company can make. Growth Tribe explores what continuous learning is, why continuous learning is the highest ROI activity your organisation can implement, and four steps to becoming a continuous learning organisation.
In a world of accelerating change, continuous learning is the single most important long term investment a company can make. With the highest return on investment of any business activity. In fact, continuous learning is so fundamental, it is driving companies who embed a continuous learning culture into their organisation to significantly outperform the S&P 500 index. As highlighted by Stefan H. Thomke, in his book Experimentation Works 2020. Here, Thomke neatly highlights the disparity between those with continuous learning, through rapid experimentation, at the heart of what they do, and those that do not:
The experimenter’s index, as he coined it, includes companies such as Google, Walmart Amazon, Nike, Facebook, FedEx, Microsoft, the BBC and Netflix. As is evident, these companies significantly outperform the rest of the market. And the fundamental reason for this is that they embed a culture of continuous learning into everything that they do. Allocating a significant amount of budget and investment into experimenting and learning.
“The only thing that is constant is change.“Heraclitus
A rapid experimentation culture can only be implemented if there is a culture of continuous learning behind it. As a Bersin report pointed out: “The single biggest driver of business impact is the strength of an organisation’s learning culture.”
What is continuous learning?
A culture of continuous learning, as defined by CEB (now Gartner), has three major characteristics:
- Independent pursuit of knowledge
- An organisation that shares learnings
All three of these combine to meet the organisation’s missions and goals and form the foundation of a continuous learning culture.
Continuous learning is the process, mindset and culture of learning new skills and knowledge on a continuous basis. Fundamental to this is a growth mindset that positions the individual as a constant work in progress. Who enjoys challenges, strives to learn, and consistently sees potential to develop new skills. Learning can either be formal or informal, practical or theoretical. And individual learning can progress organisational learnings and vice versa.
Why is continuous learning important?
Continuous learning is the single greatest return on investment a company can make. While the ROI can be difficult to measure in quantitative terms, it comes down to the fundamental fact that people and their day to day decisions are the foundation of any organisation.
And if every person can make decisions that are one or two per cent better every day, similar to finance’s concept of “compound interest”, the compound returns of learning might seem slim at first but grow exponentially over the long run. That is what continuous learning is all about.
Especially given that we live in a knowledge economy, with 1 billion knowledge workers worldwide, or about 1 in 3 workers worldwide. There is a greater dependence on knowledge, information and high skill levels than ever before. Therefore any investment in human knowledge will always yield higher returns over the long run.
A study by Pluralsight showed a return on investment of 295% on continuous learning. With payback seen in less than 6 months. The return was primarily delivered in faster, better product development due to faster talent development through upskilling and closing the digital skills gap.
Upskilling and the digital skills gap, in turn, are the single biggest reasons why continuous learning is so important. However, as can be seen below there were numerous other benefits that delivered ROI:
And as shown by the figure below, the returns were compounded over time. As skills beget skills and knowledge begets knowledge, and people make better decisions to deliver better products and experiences.
This is why continuous learning is the biggest single long term return on investment.
“The most important thing to learn will be how to continuously learn”De’Onn Griffin, Gartner
The macro trend driving the urgency for continuous learning is the digital skills gap. Fuelled by a digital transformation which has been accelerated even further due to COVID-19.
In Deloitte’s Human Capital Trends 2020 report, they highlighted that 53% of respondents said between half and all their workforce will need to change some or all of their skills and capabilities over the next three years alone. While research highlights that 86% of leaders view learning and development as their top challenge, while only 10% feel ready to respond to it.
“Bersin examined the issue of continuous learning and found that companies that effectively nurture their employee’s desire to learn, are at least 30% more likely to be market leaders in their field.“
And, yet only 10% of companies have managed to create a culture of continuous learning.
The gulf between the leaders and the laggards, the learned and the left-behind, is evident. Even though the vast majority of business leaders know that the digital skills gap is a problem that needs to be addressed. So why do they fail so consistently?
Why companies fail at continuous learning:
“Historically companies have gotten away with, and in fact, have preferred to buy talent than build talent.“
This is still evident today. When HR leaders are asked about how they plan to build new skills for the future, almost two-thirds say they will go out and recruit for the new skills they need.
Yet, this only exacerbates the problem of the digital skills gap even further. In a world where new skills are in high demand and most professionals are fully employed, it is no
longer cost-effective to simply buy skills, nor is it feasible. Companies must also build skills internally. They need to take the long term view.
Recruitment is a zero-sum game. If one company hires talent with in-demand skills in say, Artificial Intelligence, then another company cannot hire that same talent. What this creates is a paradox. Where there is both a huge demand for skills and also a huge demand for work, which are both left unfulfilled.
An Atlantic article captures the paradox. “Employers across industries and regions have complained for years about a lack of skilled workers, and their complaints are borne out in U.S. employment data. In July 2015, the number of job postings reached its highest level ever, at 5.8 million, and the unemployment rate was comfortably below the post-World War II average. But, at the same time, over 17 million Americans were either unemployed and interested in finding work, or doing part-time work but aspiring to full-time work.”
Then, take General Motors Co. who last year said they would cut 8,000 salaried employees. Many of them engineers and designers, while at the same time hiring aggressively to expand their electric and autonomous vehicle divisions.
Against this backdrop, even when managers understand the importance of learning, they are often more interested in boosting short-term results and performance, which is, mistakenly, seen as an enemy of learning.
“Performance is perceived to be highest when not learning and it is hard for employees to find the necessary time and space to learn when they are pushed to maximize results, efficiency, and productivity daily. A report by Bersin found that among more than 700 organizations studied, the average employee had only 24 minutes a week for formal learning.”
The best employees in the digital era will be those that are the fastest learners. Who in turn will become the fastest and most productive workers.
The current half-life of a skill set is five years. Therefore, if companies are not building talent but only buying talent, they will quickly find that their investment becomes redundant, and they will need to go back out into the market to buy more talent. Think of building talent as renewable talent, and buying talent as non-renewable (if they are not then built up). The future is renewable, and long term, after all.
“The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.”Alvin Toffler
In a WSJ article, entitled ‘Why Companies Are Failing at Reskilling’ – the author identifies these key reasons why companies fail to create continuous learning cultures:
- Data: most often it is the case that companies simply don’t have the data, or a view on their employee’s talents, skills, learning capacity, or ambitions. So simply cannot act on it.
- Speed: if a culture of continuous learning is not embedded, then it can take an unreasonable amount of time to upskill current employees, and for that reason, employers tend to go for the quick, and expensive fix: hiring.
- Worker engagement: due to a lack of employee engagement, employers do not realise that their employees already have the knowledge required and can be trained. The potential of the workforce is instead left untapped and latent.
- Money: companies have shown consistent reluctance to invest in training, even when the economy is strong. And when the economy does decline, training budgets are typically slashed. One paper found a 28% decline in employer-funded training between 2001 and 2009.
Successful continuous learning at a large organisation:
One of the worlds largest publishing companies recently analysed its workforce of 75,000 employees and found that there were significant skills gaps in digital marketing, SEO, digital publishing, Analytics and AI. All vital digital skills necessary for a modern publisher in the digital age. The cohort that needed replacing or upskilling stood at an astonishing 15,000 people or twenty per cent of their workforce.
Hiring on the scale and in the timeframe needed was near impossible. So they built their own in-house training programme to close the skills gap, and embedded a culture of continuous learning. This was a resounding success, and also indirectly helped engage employees as they realised they could reinvent themselves while remaining employed.
4 ways to create a continuous learning culture:
Continuous learning requires a growth mindset
Carol Dweck, a psychology professor at Stanford, first started studying what would become known as a ‘growth mindset’ in the ’70s. With the term now rightfully part of mainstream rhetoric.
Essentially, someone with a growth mindset enjoys challenges, strives to learn, and consistently sees potential to develop new skills. This is opposed to a fixed mindset. Where an individual sees skills and talent as something they either possess or lack.
What are the signs of a company that has more of a fixed mindset?
- A small handful of “star” players are highly valued. Big focus on status.
- More rigid planning, more waterfall approaches and less innovative thinking
- More likely to hire from outside (‘Buy’ talent) and emphasize applicants’ credentials and past accomplishments
What are the signs of a company that has adopted the growth mindset?
- Supervisors express significantly more positive views about their employees. Greater focus on potential.
- More innovative, risk-taking culture. More experimentation and less fear of uncertainty
- Likely to hire from within their ranks and value potential, capacity, and a passion for learning
In this time of constant change, it is much more prescient to nurture and hire people with a growth mindset. In order to future proof against the increasing redundancy of today’s skills. This will enable them to continuously develop skills to stay relevant, and for your organisation to stay competitive. Foster a growth mindset by:
- Allocate a significantly higher percentage of annual budgets for learning programs. How much are you really investing in continuous learning?
- Leadership to shift focus to the potential of each employee. Update company values to reflect a culture of innovation, collaboration, learning and growth. How are you ensuring human potential is taken as seriously as experience and credentials?
- Look to hire and promote within ranks instead of externally where possible. What percentage of all promotions take place internally?
- Shift recruitment policy to value potential and capacity for learning, as opposed to credentials and past accomplishments. How are you assessing a candidate’s suitability currently?
- Empower employees to experiment, fail and learn. For example through personal targets or team targets. Or through recognising failure and success as two sides of the same coin. How many experiments do your teams run per week, per month and per year?
- Move away from having a few star players calling the shots, and truly democratise experiments and organisational learning. What barriers do you currently face in testing ideas? Are they related to stakeholders?
Know your people’s capabilities – help foster their learning
Research shows that workers are motivated to learn and grow. With a lack of interest in learning the least important factor for workforce development.
What this tells us is that continuous learning is a partnership between the employer and employee. Where employees are powerful drivers of learning that require their employer to provide opportunities, frameworks and culture to enable this.
For the employee, often, knowing what they should learn is a hurdle. There is a paradox of choice that comes with endless courses available online, and knowing which skills are most important. Collaborating with the employer, benchmarking current skill sets, and strategising toward the most in-demand digital skills is key.
- Complete a capability scan to test for the skill sets that employees possess now, and uncover the skills that they need. The skills gap. This enables learning to be specific and relevant to each individual learner. When was the last time you carried out an audit of capabilities within your company to identify gaps and potential?
- Strategise based on the skills gap – create a personalised learning journey based on the individual’s needs. What percentage of your employees has a learning journey mapped out?
- Invest in learning and development programmes for employees to enrol onto based on their skills gap. What does your current learning and development programme look like? Does it inspire?
- Learning should be engaging and fun. Enjoyable learning leads to higher motivation and better outcomes. Compare your learning experience to the most engaging experiences out there. Why can’t your learning programme be as engaging as Netflix is to your employees?
Embed continuous learning into the flow of work
While organisations realise that learning is a top priority, with 92% prioritising this issue over the next 3-5 years, only 61% feel prepared to do anything about it. What this tells us is that employers feel unsure how to embed learning into the flow of work, without compromising short term goals and productivity. As highlighted above, continuous learning compounds returns over time, and short term thinking is counterproductive to long term viability.
Learning through experience yields better results than simplistic classroom learning. There is no reason why learning cannot be part of the flow of work, in a continuous, practical and experiential nature that builds on the employer’s mission, whilst also meeting the employee’s needs.
- Create inspiration for learning at work, with resources available to workers. For example with team channels for relevant topics, where colleagues can share articles or learning. Create an outside-in mindset. Invite speakers in-house, go to events out of house, or partner with cutting edge education companies who have frequent webinars and roundtables to share relevant learnings. How many events, channels or speakers have you invited to inspire learning?
- Develop a learning and development programme that doesn’t focus too much on theory, but instead on practical skills. Apply learnings quickly into practical output at work. How many internal learning programs that combine L&D with business units do you currently have up and running? How are you measuring their success and impact, both behavioural and organisational?
- Use the 70:20:10 learning model. 70% of learning should be through on the job learning/challenging assessments. 20% of learning through developmental relationships, and 10% through coursework and training. 10% of 220 working days is 22 days… are your colleagues spending 22 days per year on learning?
- Continuous learning requires habit-forming. This requires a step by step process, at regular time intervals to create a habit. As the habit is retained, gradually increase the size of the step. Make sure small, digestible format is used for learning. For low effort and investment so it becomes easier to repeat and build a habit. How are you encouraging workers to build a habit of learning? Are you allowing them time to do so?
- Learning should be social. Peer to peer learning utilises “success partners” or “accountability partners”. With which learnings are shared, as well as progress and feedback. Relationships and projects that are built on collaboration are more powerful. Humans are sensitive to social proof and invest more time, money and effort when it’s a social activity. How are you socialising learning?
Reward continuous learning
According to Deloitte, only 45% of organisations actively reward employees for developing skills and capabilities. And only 39% of teams are rewarded by their leaders for developing skills and capabilities.
Given the importance of continuous learning to organisations, employees should be motivated to learn by incentives. Build a reward scheme, and embed learning outcomes and metrics in performance reviews.
- Create a reward structure that incorporates learning as a key objective. How are your performance reviews incentivizing learning?
- What intrinsic rewards motivate your workers? Intrinsic motivation and human trigger are more likely to successfully form habits. For example titles, badges, awards, and the autonomy to work where they like are just some examples. Find out what drives your workers. How are you making sure your rewards are relevant on a personal level?
- Measure learning through metrics such as the number of experiments run, hours spent on learning, L&D programmes signed up to, an improvement on their key skills competency, or digital learning metrics. How are you currently measuring the impact of learning on behaviour and on the organisation?
- Use these metrics as a basis for reward or promotion. Do you measure and use data to drive learning currently?
Continuous learning is the future of work:
In a rapidly changing world where technology is reshaping work, those organisations that actively adopt continuous learning into their culture will grow faster, be more competitive, be more resilient and ultimately, future proof.
Adopting a continuous learning culture is the single highest return on investment a company can make. Not only that, but it reinforces the bond between employer and employee, fostering a growth mindset that will benefit the individual, the organisation and society as a whole.