Time Is Money

Chief Learning Officer, April 2010

Time Matters

The sooner workers are productive, the larger their contribution to the organization. This makes time-to-performance, the amount of time required to begin performing at target levels, a vital metric. Here’s an example.

At the end of the last century, Sun Microsystems was a high-flier in the workstation business. Sun was bringing 120 new salespeople a month to a one-week immersion course in Santa Clara. The new hires went through briefings on equipment, applications, competition, Sun, and more. Undoubtedly, most of this gusher of information pouring in one ear and out the other. Fifteen months later, the graduates were selling at quota: $5 million/year.

Sun’s most vigorous competitors in the workstation market, IBM and Hewlett Packard, were training new sales reps for eight and six weeks respectively. Couldn’t Sun provide at least one more week of sales training? asked a maverick in Sun’s sales training apparatus. No, replied the managers of the sales force. They said they needed the new people in the field. Otherwise, revenue would drop.

The maverick, let’s call him Jerry, promised not to take the new recruits out of the field but asked if he could have the budget it would have taken to keep them in Santa Clara an additional week? The sales managers okayed the request, and Jerry set to work assembling a supplemental, non-residential sales training experience.

Instead of coming to Santa Clara cold, new hires would henceforth take eLearning to get up to speed on hardware and specs. Passing a pre-test was the ticket of admission to the on-site program at corporate headquarters.

Since they had already mastered the explicit aspects of the job, the week in Santa Clara was refocused on a case study that got the recruits working together with the same people they would need to coordinate with when in the field. More time was set aside for motivational meetings with such enthusiasts as CEO and founder Scott McNealy and hard-charging President Ed Zander.

The recruits also learned the ins and outs of Sun’s brand new sales information system and were certified as trainers on the new system. The newbies became the go-to people for experienced salespeople in their branch offices who needed to use the system. Veteran sales people had little choice but to interact with the new hires.

The program was a success. Nine months were shaved off the time-to-performance. New hires were selling at quota level in six months instead of fifteen!

The financial impact was astounding. Consider: 120 new hires/month = 1,440 new hires a year who on average were selling at $5 million/year nine months (3/4 of a year) earlier than before.

1440 sales people x 3/4 year x $5 million = $3.5 billion in incremental revenue.

Jerry ran up to Ed Zander in the parking lot to excitedly report that the new program was bringing in more that $3 billion in new sales.

Zander looked Jerry in the eye and said “No.” He explained that Sun’s equipment was the best on the market, Sun was hiring better people than IBM and HP, and besides, Zander himself was getting people charged up.

“Would you credit me with 1% of the increase?” asked Jerry. Zander said he’d attribute perhaps 3% of the revenue increase to the new program.

Not bad, said Jerry. That’s $100 million in new sales (3% x $3.5 billion).

A few lessons from this parable:

  • The returns on decreasing time-to-performance can be so huge that even the crudest measure of ROI is often enough to demonstrate merit.
  • Time-to-performance is a metric a business executive can understand and believe in.
  • Time-to-performance provides a better goal for instructional designers than merely attaining competence.
  • Performance takes motivation, comfort, and sometimes courage as well as knowledge. The time-to-performance metric takes this into account.

Executives want execution, not learning. They want action, not knowledge. It’s unacceptable for a worker to know something but do nothing. Action is what counts.

The sooner workers are productive, the more profitable their enterprise. This makes time-to-performance, the amount of time required to begin performing at target levels, a vital metric.

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