Changing Channels

Why Learning Management Systems Won't Work in the Channel

Learning management systems are often applied in the channel to manage a channel development strategy.  This can be a mistake, and this posting will tell you why.

First, let's get on the same page as to what most of us are trying to achieve in the channel: We're trying to increase sales, drive down costs and improve customer satisfaction.  To succeed we need to optimize the performance of the sales, service and management teams in our channel.  This is a key point: our goal is to optimize performance.  Our goal isn't to provide training.  Although training is a component of our drive to optimize performance, it is by no means our end goal.

Now what are Learning Management Systems good at?  They're good at delivering training and not too much else.  As a result, to effectively drive performance improvement in the channel you will need a Performance Management System.  A Performance Management System is a system that not only manages the delivery of training but also manages the Four Pillars of Performance Improvement, including communications, education (of which training is a component), motivation and measurement.  Why? Because you cannot effectively optimize performance without delivering to all four pillars.  To learn more about Channel Performance Management Systems please see my posting entitled "The Enabling Technologies of Channel Performance Improvement."

At this point you may be wondering why learning management systems can often be effective on the employee side if they won't work effectively on the channel side of the business.  To answer this it's important to make a critical distinction between "reaching" captive employees and non-captive channel partners:

Employees can be reached effectively through a wide range of media, and therefore, a company is not dependent upon a single vehicle to drive the performance of their employees.  The components of the Four Pillars are often delivered through multiple media solutions such as company newsletters, email correspondence, meetings, multiple websites and much more.  Because employees are effectively a "captive" audience it is not unreasonable to expect them to deal with the myriad media solutions that, together, deliver the Four Pillars of Performance Improvement.  In fact, employees really have no choice but to accept that situation and find ways to make it work for them.  This is not to say, however, that they too wouldn't be better served by a Performance Management System vs. a Learning Management System.

On the channel side the front line customer-facing people, such as those in sales, service, parts and finance are often hard to reach.  And, more importantly, they are not inclined to invest a lot of effort into accessing your training and knowledge-based systems.  If it's not easy to access everything they need, when they need it, and from a single point of access, you will quickly loose them.  You basically have one shot at reaching them and that shot better deliver against all of the Four Pillars.  To deliver less will result in an under performing channel.

To read how a Performance Management System delivers on the Four Pillars of Performance Improvement please see my posting entitled "Contextual Performance Improvement--The Next Revolution."

Make it Easier to be Smarter!

Recently I sat in a dealer advisory meeting, surrounded by a group of about 15 dealer development managers.  The fact that they were from dealerships, verses franchises, stores or distributors is irrelevant to this message.

The conversation at the table had been around frustrations at the dealerships with sales being lost to competitors.  It seems that when a customer purchased a core product from the dealer, they often went to other specialty stores for the components that supported the core product.  Why?  Because the counter sales people did not have the component-level knowledge to present the supporting component options to the buyer.  Consequently, there was little to no chance of capturing the entire sale by that dealership.

It was at this point that a dealer development manager at the end of the table slammed his fist down hard on the table (which startled more than just a few people) and vehemently exclaimed, "Damn it!  What we need is a way to make it easier to be smarter!"

There you have it--a pearl of priceless value!  We need to make it easier for our channel to be smarter.  How do we do that?  By delivering knowledge and information in a contextual format, i.e. within the context of their work.  And by moving training away from an "event" to a "just-in-time format" whenever possible.  The information and knowledge our channels need to do more, sell more and service better should never by more than a click away from their work.  For a complete treatise on Contextual Performance Improvement please see my posting in this blog entitled "Contextual Performance Improvement, the Next Revolution".

When you examine how you can further impact the performance of people in your channel remember the edict from the frustrated dealer development manager: "We need to make it easier to be smarter!"

The Methodology Behind Channel Performance Improvement

In my previous post entitled: "The Enabling Technologies of Performance Improvement" I presented the technology behind channel optimization.  Although I touched on methodology in that posting I would like to take a moment in this post to focus on that methodology.  Why? Because great technology must be mated to a great methodology in order to be powerful.

Fortunately, you don't need to experiment or engage in an expensive analysis to find the right methodology.  In fact, that methodology has been designed, tested and proven over the last several years by some of the most respected performance improvement companies in the world.  That methodology is based upon the Four Pillars of Performance Improvement and is featured in the image below (note: please click on the image to enlarge).

Let's take a look at the Four Pillars in action.  For this example let's assume you sell and service heavy equipment through dealers.  You've been experiencing high warranty costs and you have reason to believe that your service techs are not prepping the new products properly before releasing them to new customers.  Recognizing this problem you set out to resolve it by COMMUNICATING to your service teams worldwide that you have a new "Best Practice" for prepping new equipment and you expect all service techs worldwide to follow that practice.  Then you provide a training and support package that EDUCATES your service techs on the new practice and how to successfully prep the new equipment.  Then you MOTIVATE the service techs to follow the new procedures either through a carrot or a stick...or both.  [Note: this motivation often takes the form of a certification program or a recognition program.]  Finally, you MEASURE the results and hold individuals accountable for following the new procedures.  As a result, your warranty costs drop back down to acceptable levels.

To attempt to optimize channel performance through any other methodology, or worse yet without a methodology, is to put your program at great risk. 

The Enabling Technologies of Channel Performance Improvement

In my last posting I spoke of how sales and service performance are optimized when learning and information are delivered in a "contextual" manner--in other words, when learning and knowledge are never more than just on click away from a person's work.  In this posting I will focus on the enabling technologies behind "Contextual Performance Improvement" (CPI).

Since our goal with CPI is to improve the performance of an individual in the channel, then it helps to understand the types of resources (knowledge and information) that we must deliver to the channel in order to optimize performance.  To do so we need look no further than the venerable "Four Pillars of Performance Improvement."  For this example I'm going to add a fifth pillar and that is one I will call "Alignment."  I've added Alignment because aligning the channel with corporate vision and goals is becoming not only critically important, but as you will see in this posting it's also becoming very possible even in an indirect channel.  In the graphic below I've used puzzle pieces to represent this performance-based methodology (note: click image to enlarge):

 

Now, let's flesh these out by adding the resources that make up the deliverables for each of the five pieces in this puzzle:

Communication

• News & Information: new product introductions, sales & service programs, corporate strategy & alignment, etc.
• Automatic Notifications: certification expirations, prescriptive learning, etc.
• Auto Calendaring: webinars, instructor-led training events, meetings reminders, etc.
• Upcoming Events: trade shows, webinars, etc.
• Alerts: shipment delays, recalls, etc.

Education

• Courseware & curricula: WBT/ILT/IDL
• Competencies: role-based competency maps and individual learning plans
• Performance Support: data books, pricing schedules, best practices, presentations, proposals, templates, videos, animations, etc.
• Collaboration: peer-to-peer, ask-the-expert and FAQ's.
• Knowledge Tansfer: expert systems, configurators, etc.

Motivation

• Certifications: sales & Service
• Incentives: sales, service, parts and finance programs
• Recognition: achievement and reward

Measurement

• Analytics: in multiple formats
• Metrics: by region, by role, etc.
• Reporting: user surveys, user transcripts, site usage, etc.
• And more

Alignment

• Corporate goals: sales goals, warranty cost reductions, customer satisfaction goals, etc.
• Strategic initiatives: value-based selling, product packaging, etc.
• Corporate marketing campaigns: sales, parts, finance and service campaigns

Now, let's take a quick look at the file formats that support these puzzle pieces.  Basically, whether you're applying CPI to sales, service, parts, finance, management, or just about any other target audience, virtually all of the common file formats most of us use just about everyday will need to be supported:

• HTML documents: such as websites, web-based training courses, hyperlinks, Webinars, etc.
• Animation formats: such as Flash files.
• PowerPoint documents: such as sales presentation, product slide decks, company presentations, training slide decks, etc.
• Word, Excel, Access and Acrobat files: such as product catalogs, spec sheets, pricing sheets, company information, company databases, etc.
• Graphic formats: such as .gif, .jpg, etc.
• Video formats: such as Windows Media and Apple Quicktime
• Special formats: such as those of certain online tools like product configurators, etc.
• And many more.

As you can now see, this is no simple task.  You may also surmise that none of the popular tools such as learning management systems, content management systems, portal technologies, or other popular off-the-shelf systems and tools will, on their own, support this solution.  In actuality, the system that properly supports CPI is a hybrid of the following:

1. Content Management
2. Learning Management
3. Collaboration & Communities of Practice
4. Incentive & Rewards Management
5. Portal Technologies

Introducing Channel Performance Management: The ideal solution is a system that extracts features from each of these systems, as they apply to the channel, and incorporates them into a single system that's affordable, easy-to-use and easy-to-support.

Fortunately, a new breed of technology is rising to meet this unique need.  This new technology is called a Channel Performance Management System.  A Channel Performance Management System leverages the best of each of these systems as they apply to the unique needs of the channel.  In so doing it deliberately discards the many features of these systems that have no value to channel management and only serve to add costs and complexity.  What you are left with is the perfect combination of features from content management, learning management, portal technologies, collaboration and motivation all rolled into a single, powerful system.

One-to-one Performance Improvement: Finally, one last important feature of a Performance Management System is that the system must be "audience smart".  In other words, it must be capable of delivering CPI in a "one-to-one" performance improvement interface.  For example, a dealer service technician in Beijing, China, should see only service-related content, only for products actually serviced in his/her region, and in Simplified Chinese.  Similarly, a dealer finance administrator in Seattle, Washington, should only see finance-related content, for finance programs sanctioned by that state and available in his/her region, and in English.  Without one-to-one CPI, usability and relevancy suffer and user rejection quickly follows.

Summary: In summary, a new breed of technology called a Channel Performance Management System is capable of delivering on the promise of 4th generation performance improvement, a.k.a. CPI.  These systems integrate the best functionality of existing solutions, are built upon a tried and true performance methodology and are capable of taking your channel to new levels of performance in all facets of a channel including sales, service, parts, finance and management.  To see a Channel Performance Management System in action please contact me and I will arrange a demonstration.

Contextual Performance Improvement--The Next Revolution

Your world is about to change.  Training, developing and optimizing your channel workforce will never be the same.  Whether you're selling through dealers, franchises or distributors you can now significantly improve sales, drive down warranty costs and improve customer satisfaction using the next revolution in channel management--"Contextual Performance Improvement!"

This posting of "Changing Channels" will introduce you to this exciting new phase in channel management.  It is the first of a three-part posting.  The next posting will present the enabling technologies that make it all possible.  The third posting will present the performance methodologies necessary to ensure your success.

Forrester Research www.forrester.com in a recent study tells us we are entering the fourth phase of learning.  Forrester calls this phase "Contextual Learning."  At LogicBay www.logicbay.com we call it Contextual Performance Improvement, or CPI, because we believe that it goes well beyond the commonly used definitions of "learning."  But whatever you call it, it's about to change the way you manage your channel.

CPI is the seamless integration of performance improvement into the context of a person's job.  It's a web-based environment where knowledge and learning are never more than "one click away" from a person's work.

Let's take a fictional scenario, although one closely based on reality, to illustrate the application of CPI.  In this scenario imagine yourself as a sales person for a heavy equipment distribution company carrying the ACME line of products.  It's mid-afternoon...

You confidently place a call to one of your largest customers in an effort to close a big deal that you believe is yours for the taking.  To your surprise, the customer tells you that he really likes the energy efficiency offered by your competitor's product.  A sense of urgency fills the air.  You are about to lose this deal to Apex if you don't move quickly.  You tell him that you think he's basing his decision on inaccurate information.  You ask him to hold while you do a quick lookup.  He agrees.  You quickly turn to your computer screen which is already open to the ACME Sales Performance Center, a fully-functional CPI website.  As you move your cursor to the "Marketing Tools" menu the drop down menu displays a list of marketing support tools.  You follow it down with you cursor to "Competitive Info" and hold your cursor there for a second while the menu cascades out to reveal all competitors, including APEX Equipment.  With a single click, and within a few short seconds, you are scanning the data for APEX efficiency ratings vs. ACME.  You see that you really do have the advantage here.  It's a very slim one, but it should be enough to win the deal.  Your confidence returns.  You go back on the phone and set the record straight with your customer.

Accessing this support for your call has taken you 60 seconds.

Unfortunately, your customer says that the efficiency ratings are so close that he may still favor APEX because he's getting a lower price.  You ask him to hold on a decision until you get back to him.  He agrees to wait 24 hours before pulling the trigger on APEX.

You don't want to lower your price.  ACME has been stressing value-based selling vs. price-based selling.  They want to increase their margins, not reduce them!  So, you turn back to the ACME Sales Performance Center and drop down on the menu "Sales Best Practices."  A series of courses, job aids, FAQs, and collaboration links is displayed.  You open the FAQs and find a few items related to similar challenges experienced by others in the field.  A couple of these point to a specific "value-based" selling module that is part of your sales certification program.  You launch the course and are pleased to see that it's a short module packed with information on how to position the value of ACME products in the minds of your customers...without lowering your price.  You close the program after completing it in 20 minutes confident you are closing in on a strategy that can win the deal without lowering your price.  To complete your preparation you now click on the collaboration link.  After quickly browsing current postings, you post a question to the product expert at ACME explaining your specific situation with this customer and asking for any tips or further differentiators that may close the gap considering the narrow lead you have with those efficiency ratings.

Now you return to your home page and are stung by some bad news: There's an alert in your "News & Alerts" section informing you that shipments are being pushed back a month on ACME products!  Temporarily stunned by yet another obstacle, you recall, as your value-based selling course has taught you, that this can be a winning strategy and not a loosing one.  After all, ACME's products would not be back ordered if they weren't in such demand.  And they wouldn't be in such demand if they weren't the best products on the market.

That night you decide to continue your progress on your ACME certification program from home to further prepare for meeting your customer's objections in the morning.  You log onto your ACME Sales Performance Center and take a short product knowledge module and two additional sales modules: one on opportunity management and another on how to effectively close a sale.

First thing the next morning you log into your ACME Sales Performance Center and see that the product expert from ACME has provided some roadmap details that can help you gain some further advantages here.

You then prepare your strategy by combining the best of what your peers and company experts can offer (harvested into valuable FAQs and in current forums), the techniques you've learned from the value-based selling course, a bit more competitive research and a quick search through your marketing resource database where you access the right PowerPoint slides, data sheets and the most compelling closing letters.

By mid-morning you visit your customer with a winning proposal and you close the deal without lowering your price.

In this scenario, everything you needed to prepare for and close this deal was available with a single mouse click...from a single location.  Some of it was event-based, such as the value-based selling course, some was collaborative such as "ask the expert" and the peer-to-peer email threads, some was in the form of communication such as the alert on shipment delays, and some was in the form of performance support and knowledge transfer such as the PowerPoint slides, data sheets and the winning cover letters.  And, most importantly, all of it was available within the context of your job.

Congratulations on your successful deal!

At this point it's important that I mention that CPI also applies in similar ways to Service Training, Customer Training, and many more performance improvement applications throughout a dealer, franchise or distributor.

Now, let's take a step back and examine Contextual Performance Improvement in the context of Forrester's Four Phases of Learning (see diagram below).

1. In Phase I: the "Separate" phase learning was primarily instructor-led, classroom based, technical and tactical.
2. In Phase II; the "Online" phase learning moved to the Internet for access anywhere at anytime.  It consisted primarily of moving classroom materials to the web.
3. In Phase III: the "Blended" phase learning became a blend of ILT, WBT and Virtual Classroom.
4. In Phase IV: the "Contextual" phase, learning is integrated into the way people work and never more than a single click away from their job.  This phase, according to Forrester, is the next phase of learning.

Curiously, if you look at the four phases as presented by Forrester, you'll notice that the first three phases consist almost entirely of what I call "event-based learning," i.e. learning was an "event" that occurred outside of the daily experience of work.  Learners had to either physically leave their work to attend a classroom event or mentally leave their work to attend an online training event.  It is important to understand and embrace this difference.  Event-based learning, whether it's web-based or classroom, has limited long-term impact on performance.  Studies have shown that retention deteriorates rapidly soon after the learner returns to the workplace.  But, if the information is available within the context of a person's work, and accessed on-demand when the learner really has the "need to know," it is applied immediately and retained indefinitely.

Forrester goes on to say that this "Fourth Phase" of learning features the following five characteristics:

• Integrated into the work environment
• Informal
• Learner in charge
• Real-time need
• Collaborative

We agree with Forrester Research entirely.  We do want to stress, however, that CPI is not just about learning; it's about communicating more effectively, aligning the channel behind corporate goals, delivering motivation, providing collaboration, and presenting relevant information on demand, all in a singe place and all just once mouse click away from work.  After all, would you have succeeded with your ACME sale without this full spectrum of CPI materials?

For the past six years LogicBay has been working with DaimlerChrysler's Commercial Vehicle Division to perfect CPI (before it actually had a name)!  Working with three business units: Freightliner Trucks, Sterling and Western Star Trucks and the corporation's used truck division called FMDC, we've been building a solution that truly delivers on the concept of CPI.  Today, we're implementing CPI globally for several Fortune 100 companies.  This gives us a unique perspective on the concept of integrating all facets of performance improvement into a single, web-based environment where all performance resources are never more than one click away from a user's work.

In my next posting of "Changing Channels" I will present the enabling technologies that make CPI possible including the one-to-one performance methodologies that improve usability by filtering the available information by audience type, so a user only sees the information and resources specific to his or her job role.  The third and final posting on this subject will cover the performance improvement methodologies that must be incorporated into these web-based solutions to ensure success.

Until then, I wish you the best of success managing your channels and winning against your competition.