Setting a Baseline


Setting a Baseline

Rockwell Collins used the services of The Performance Engineering Group (PEG) to gain that valuable outside perspective on its culture. We collected data that gave us a vast vision of the history and impact of training over the past seven years . We looked at the five-year strategic business plans for the company and each business unit; we collected the last two biannual "best place to work" surveys, which Rockwell Collins conducts every other year to monitor employee satisfaction; and we compiled a seven-year history of training at the company.

We were loaded with data. From it we discovered several important ”if not entirely surprising ”facts about the history of learning and the value that was placed on it at Rockwell Collins. For example:

  • Of the more than 1,400 individually titled courses delivered in the previous seven years, 76 percent were delivered one time to an audience of no more than eight people.

  • Sixty percent of the cost of training is employees ' time away from their jobs, which is in keeping with the national average of 65 percent.

  • Forty percent of employees received fifteen or fewer hours of training per year.

  • Fifty-three percent of employees said that they'd had to cancel their attendance at a scheduled training event because of work demands.

  • Up to 50 percent of registered trainees were no-shows because of scheduling conflicts.

  • Forty-eight percent of employees left a training event because of work demands.

On its own, this data didn't give us a complete picture of the attitude and culture surrounding training at Rockwell Collins, but it did lead us toward certain conclusions, and it gave us our baseline of the state of training at Rockwell Collins when we began this process.

A baseline is an invaluable collection of data that you will use repeatedly during the transformation process to monitor and prove your progress. It's a snapshot of all the training that transpired during a given time period, defined by every measure you have available.

Creating a baseline is important because it is the only proof you'll have that things have changed. You will refer to this baseline a hundred times in the coming years to justify what you are doing and prove what you've done, so make it as detailed as possible. Also, because the baseline data is usually so bad ”a condemnation of what's been going on ”it becomes a very useful tool when selling your new strategy to the organization.

Baseline data should be compiled from all of the details given previously, including number of classes delivered, hours of seat time, number of times each course was delivered, dollars spent overall and per course, personnel involved, travel costs, number of classrooms used, hardware and software costs, who received what training, documented results of training (if any), cancellations , no-show rates, and survey responses. The more information you collect, the more valid your argument for change will be. Once you have all of that data, boil it down to material and labor costs. If you or someone in your training department doesn't have the expertise to "massage" this data adequately, get outside support. Don't be afraid to ask your finance people to help you too.

Those dollar figures will be used as comparisons in your strategic plan. With them you will be able to contrast where your training budget was going with what you could be getting if management followed your advice.

Corporate memory is extremely short, and without this baseline you'll be hard pressed to convince executives that their company was not always the well-oiled learning organization you are about to transform it into.

Our baseline covered all of the training delivered in 1998, the year we began the process. That was the starting point with which all costs and measurements were compared. In the baseline, we projected the total cost of training materials and labor over four years if nothing were changed, factoring in a 3 percent increase per year, and then we compared that number with the cost expectations of our strategic plan. We used that baseline information in our plan and our sales pitch to show the dramatic cost differences we could realize over four years. See Figure 2-1.

start figure

Project Oasis Forecasted Savings

Category

Year 1 Total

Year 2 Total

Year 3 Total

Year 4 Total

Four-Year Total

Baseline (1998 + 3%)

$17,429,750

$17,952,643

$18,491,222

$19,045,958

$72,919,573

Oasis implementation

$10,663,149

$9,494,405

$10,318,833

$10,815,489

$41,291,876

Overall savings

$6,766,601

$8,458,238

$8,172,389

$8,230,469

$31,627,697

The baseline in this chart compares the cost of training over four years if Rockwell Collins had continued its old system with the cost savings of our learning-organization transformation, forecasted out over four years. To date, we've saved the company $24 million over three years, and we expect to hit our four-year target of more than $31 million saved.

end figure

Figure 2-1: Baseline Chart.

In the plan we ultimately crafted, we estimated that Rockwell Collins would save $31 million, or nearly 40 percent of its training budget, over four years. This was a conservative estimate based strictly on hard numbers , such as labor, travel, and off-site expenses ”airfare, hotel costs, and the like ”and reduction of on-the-job hours lost to training. The savings did not reflect return on investment attributable to improved job performance or an expected increase in employee-retention rates that would be due to the increased quantity and quality of training. If these less quantifiable paybacks had been factored in, Rockwell Collins would have realized a savings of twice that much.

Those baseline numbers were used liberally throughout the plan, and we backed them up with more than forty algorithms to show payback that was validated by our finance group. Even though cost savings was not a primary goal of our plan, the cost comparison had a profound impact on our supporters.

To this day, Rockwell Collins's executives refer to the baseline when any changes are made in the learning and development department. The organization still asks about seat time and average hours of training per employee per year, among other items, but those queries are becoming fewer and fewer. Without that baseline, it would be impossible for us to show the profound changes and savings that have occurred.