Innovation Training as Profit Center?

Yes! A 750% Return On Investment*

“There is no escaping it: increasingly, trainers are having to account for training dollars spent.”
—S. Shelton and G. Alliger, Training and Development Journal

What’s the greatest investment vehicle for a manager? Not a tax deferred 401(k), the latest hot stock tip, nor even real estate. Nope, the best investment you can make is to spend on your most important resource — your people. When you invest in building the skills and capabilities of your people, your organization will receive dividends — almost immediately and for years to come.

Here’s Proof!

Remarketing Services of America, Inc., (RSA), then a subsidiary of DaimlerChrysler, offered a training program in innovation skills to employees. The course was designed to help them become 1) better problem-solvers, 2) more effective in their work and 3) more deliberate about using their creativity to produce bottom-line results. By offering Creativity Unleashed: The tools and techniques of Creative Problem Solving, in which employees learn applicable tools by solving actual organizational challenges, RSA measured significant tangible savings and intangible benefits in the three months following each program and well beyond. Monetarily, it amounted to greater than a 750% return on investment, even taking into account the cost of “unproductive” employees away from their jobs while participating in the training.

Applying the skills across the organization

So how did RSA get such a great ROI on the training? A better question might be where didn’t they get results? A few months after the training courses, Cathy Doebler, training manager for RSA, reported that there were substantial savings across the entire organization directly attributed to the breakthrough thinking training.

According to Cathy, “What is great about this training is that people actually applied what they learned. The process, tools and techniques really helped our people unleash their creative abilities to solve problems. The results have been great.” Savings have been seen across the organization in a number of departments. Just take a look.

Generate ideas — A $112,000 savings

“One of our managers returned from the training and decided to use Creative Problem Solving to conduct some on-going process improvement,” Cathy says. “In the span of twenty hours, his team came up with ideas to improve the way the organization worked.” The result: the elimination of an unneeded process and $112,0000 in annual saving in Sales Support alone. One person trained, one person applying newly acquired skills, and one relatively huge result!

Phrase problems as questions

Another participant left the training eager to apply the tools and techniques to a problem she was facing in the hiring process. The HR department was receiving so many resumes that it was taking up too much time to review all of them. Instead of getting frustrated, this trained employee turned the problem into an opportunity and used the technique of framing problems as questions that she learned in the training to ask, “How might I enhance our process for reviewing resumes?” As soon as she phrased the problem as an open-ended question, the answer became obvious: automate it. This simple solution has now been implemented and is saving the company $4,400 a year in productivity annually.

Do it better, faster, AND cheaper

RSA also has a contact management center where employees make phone calls to customers. One of the greatest things about the innovation process is its ability to help people organize their actions and come up with ideas that when put together really improve efficiencies. By applying an innovative approach to organize tasks, people at the call center were able to save 50–60 support calls per week. “Over the course of the year,” Cathy says, “that is a huge volume of calls that we can now use to sell our products to new customers. This has a direct positive impact on our business.”

In addition, two other team members applied the process to create ways to do their jobs more effectively. The ideas they generated and implemented enabled them to each save 4 days a month for half a year which generated over $6,000 in savings right back into RSA’s pocket. Wouldn’t you like to free up 4 days a month at no cost?

The Intangible Benefits

“We saw savings across the board, from process improvements, to enhancements in our recruiting process, customer service and even better use of supplies” says Cathy. The biggest pluses of the training, though, are the intangible benefits that participants experience and carry with them as they apply what they learned. “Use of the process has improved morale,” Cathy says, “It helps people make better decisions and look at problems from many perspectives.” Participants also report that team meetings are more productive and that their clients are benefiting from a deliberate shift in thinking.

The bottom-line

“The classes were a great investment,” Cathy says, “in one of the follow-up studies (conducted 3-months after the training) we reported a 750% return and in the other an 1100% return on the training investment.* We reaped huge benefits from the Creative Problem Solving that we will continue to see over time.”

Don’t just take RSA’s word for it!

And even in organizations that don’t do formal evaluation of their training programs, anecdotal results speak volumes. Of dollars! Kraft discovered ways to save millions of dollars to meet revised budget targets. Pfizer reduced their drug approval process by six weeks (in an industry where each day of delay can cost over a million dollars). On one product, Clorox solved – the very next day! -- a problem that had been the number one consumer complaint for 77 years. They also developed a way to avoid $300,000 on new packaging. A GM plant discovered a way to save $40,000 per week and achieve a statistical “zero-defect” rate. Kodak saved three million dollars per year on one production line alone! Fortunately, there are many more stories like this that demonstrate how a training program can more than pay for itself…very quickly, and frequently immediately!

The Next Step

Creative Problem Solving training creates great value for organizations. In addition to helping to achieve great results measured in dollars, people enhance their productivity, create an environment that is safe for great ideas, and all the while people enjoy their work and their work teams more. So think about creativity training not as an expense, but as an investment in the company. Or you can look at it this way, “what’s the cost of NOT investing in improving the innovation capabilities of your organization?” Now that’s a costly missed opportunity!

*Definition of ROI includes both money made and savings in time, money, resources, etc.

Employees learn by solving actual organizational problems.

Don’t take our word for it!

The companies that spend the most on training their workers would have outperformed the overall stock market from 1997 to 2001. So says a recent survey conducted by four researchers representing the Federal Reserve Bank, Georgetown University, and Knowledge Asset Management, a money management firm.

According to the survey, the companies that ranked in the top 20 percent in spending on training and development would have earned an average of 16.2%, annualized, in the last five years or 6.5 percentage points a year higher than the Wilshire 5000 index.

Better yet, that market-beating performance was produced with about 10 percent less risk, as measured by the volatility of returns.

And in the same time period, companies at the bottom of the training-expense rankings had significantly lower returns.

(Source: New York Times, 3/31/02)

Study Methodology

At the end of the Creative Problem Solving training, all participants were asked to answer two questions: 1) what are five business issues to which you will (or could) apply some part of what you learned here today? 2) For each of these issues, as best as you can please assign a range of potential resource savings or benefit.

Three months later, an RSA staffer called all participants to follow-up on the results of the program to determine the answers to questions 1 and 2, and whether or not they were successful in their implementation. These results were then totaled and compared against the total costs of the program (e.g. fees and expenses) plus the time for participants to be “unproductive” (i.e. away from their jobs) while in the course. From these numbers, the Return on Investment was calculated.