Short—term thinking won't keep your company alive next year.
Although we had met or exceeded our numbers every quarter, it was nothing but a hollow victory.
"I need $20 million from you." This was one of the more curious demands I have ever heard in the course of my professional life. It occurred many years ago while I was working for AOL—Time Warner, a company that no longer exists. Indeed, at the time, we were the media entity almost everyone was talking about. We were poised to "dominate everything"—Internet access, content, media, magazines, movies. You name it, we were going to own it; our name was on many of the most recognizable media brands in the market.
Yet, one quarter we were facing trouble when my boss, the senior vice president, relayed to us the message that his boss, the executive vice president, made to his five senior vice presidents: "We're down $100 million to goal. I need $20 million from you, from you, from you …." And he needed it in three weeks. The explanation went something along the lines of: "We have to hit our numbers, or ‘The Street' will punish our stock." (In those days, the big concern was the stock price, because executive compensation was heavily based on that. Hitting the quarterly numbers was seen as key to keeping the price pumped up.)
So, my division did what any rational group would do—we came up with immediate—term ways to generate revenue, primarily through deals and sponsorships. The team developed around 10 ideas, and we ran with it, hell—bent on making the money quickly so we could hit the number for the quarter.
Miraculously, we did—we even exceeded the goal, and other teams did the same. But the stock didn't move. In fact, if anything, it moved down over the next several months. Eventually, it tanked to the point where our media empire had to be broken up and sold off.
Investing in success
So, what happened? I'm not an investment banker, but it turned out that The Street didn't really value us hitting quarterly numbers as much as it seemed to value buying into a long—term growth strategy—one that looked to the future (and one we didn't have). Although we had met or exceeded our numbers every quarter, it was nothing but a hollow victory, which was neither celebrated nor rewarded in any fashion. And it's because our leaders didn't take the actions necessary to put us in a long—term position to succeed as a company.
Look at Amazon or Google and you can see validation for this long—term view. For many years, Amazon didn't even make a profit. Similarly, Google invests billions of dollars in projects that may not pay off in 10, much less 20, years. But those moves may pay off after no other company is left standing in the space.
The core lesson from this is that you can't succeed in business—or in any field or organization's division—if you don't invest in that success. To paraphrase famed management guru Peter Drucker, you can't slaughter tomorrow's opportunity on the altar of yesterday.
At AOL—Time Warner, we were focused on maximizing our existing business model, but we didn't make the moves necessary to position the company for what was ahead. We only really cared and focused on what we did that quarter.
And it's human nature, right? We focus on solving immediate problems, we throw our best people at trying to find solutions for issues we're having now instead of using our talent in more proactive ways—thinking ahead and investing in technologies or core products.
The same issue happens in learning. Companies still order training as a reaction to workplace issues—Starbucks's recent diversity training being perhaps the most newsworthy—or new compliance mandates. And the training shows a reactive approach. It's often thrown together quickly or done with an out—of—the—box supplier solution.
In terms of learning, too often companies and organizations do the equivalent of asking their L&D staff to generate the proverbial $20 million. They don't invest in the tools that can potentially optimize learning for the age we live in; they squeeze as much output as possible without considering the long—term changes in behavior or improvement. They do what they've always done, because the metrics are based on the amount of activity (or simply getting the work done) rather than truly moving toward making work and the employees better at what they do.
Consider this: How many learning organizations are using virtual, mixed, or augmented reality to improve situational recall or empathy? How many are using artificial intelligence for performance support? Or how many are even using something more mainstream like mobile and social learning for knowledge sharing?
The Association for Talent Development's research on the subject is enlightening. According to ATD's Talent Development Executive Confidence Index, these are the percentage of companies using each type of technology today:
- artificial, virtual, or mixed reality: 4 percent
- artificial intelligence or bots: 7 percent
- social learning: 30 percent
- mobile learning: 36 percent.
We know such technologies are being used today and enjoy adoption in numerous other areas, so the issue isn't that employees don't know how to use these technologies. And we can't argue that newer technologies are ineffective. According to a recent University of Maryland study, participants during a training exercise showed an 8.8 percent improvement in situational recall accuracy using VR headsets over more traditional training methods.
Yet, learning organizations lag. For example, according to a recent Harvard Business Review study, 68 percent of companies believe that mixed reality is important to their companies' goals. But of those, only 29 percent are actually piloting or testing the technology in their company right now—and that number drops significantly when it comes to learning or training purposes.
AdvertisementWhy? Part of that, understandably, is cost. Some of the chief talent development officers I've spoken with say they will often wait until the cost of headsets, such as Microsoft's HoloLens, comes down before making a big leap into the space. Others say they don't quite see the adoption yet for their industries.
That's all fair. However, a large part of what's driving the lack of adoption is simply inertia. Teams keep going with what they currently do. Everyone is busy enough with so much work and the ability to change or move in a different direction becomes hard, so it simply stays the same.
What accountability really means
In my own division, I talk frequently about a leader's role, and among the many things my division prioritizes, the most important quality a leader can instill is accountability for results—and that means not just now but in the future.
The latter part is where leaders often fall. Like the senior team at AOL—Time Warner, leaders can get so focused on the immediate—term accountability that they don't set up their teams well to move organizations toward the future.
What does accountability for results look like for learning leaders? It means fighting for budgets to increase technological capacity and capability. It means developing business cases where the payoff isn't this year but in the coming years. It means taking on risk to do something new today so you can survive tomorrow. Finally, it means creating an environment where you and your employees can develop an adaptable mindset to pick and choose those technologies that are right for you.
As with AOL—Time Warner, the risk isn't about keeping the current operations running—the risk is wholly not being around tomorrow because you didn't care to look beyond today.
Read more from CTDO magazine: Essential talent development content for C-suite leaders.