Focus on Core Business in Turbulent Times

www.AscendisLearning.com
©2010 Drake Resource Group, Inc. All rights reserved.

“During such times…it is the choice and depth of focus – and not the
breadth and speed of expansion – that lead to sustained, profitable
growth.

…The key to unlocking hidden sources of growth and profits is usually not
to abandon the core business but to focus on it with renewed vigor and a
new level of creativity.”

Chris Zook , James Allen, Profit from the Core: A Return to Growth in Turbulent Times.
Harvard Business Press; Feb 2010. 1
www.AscendisLearning.com Emphasis added.

What might this mean for core business objectives in
today’s business climate change?

Focus on Strengths

Retain Customers

Eliminate / retool poor investments

Capitalize on opportunities

Retain / recruit / grow talent

2

More than one-fifth
Do you have plans to look for (22%) of surveyed
new employment? Generation X
employees (ages 30-44)
have been actively job
6% Seeking/plan to
hunting over the past
seek new
employment year, citing “lack of
career progress” as the
Expect to stay leading reason (40%).
45% 49%
with current
employer
Academic research
indicates nearly 40% of
employees are likely to
Don't know
act on their turnover
intentions.

Survey respondents include: salaried employees (40%), managers (28%), hourly employees (6%) and part-time
employees (4%). Representative samples were surveyed across 4 generations present in today’s workforce.

Source: Managing Talent in a Turbulent Economy: Keeping Your Team in Tact, 3
Deloitte; Sept 2009.

Labor shortages mean that firms may need to compete for
skilled workers, and small businesses are sometimes at a
competitive disadvantage in outbidding larger firms.

When these positions go unfilled, small businesses are forced
to seek other alternatives, such as having employees work
more hours, leaving positions vacant, or turning down work.

The Small Business Economy: A Report to the President 4
Small Business Administration; 2009.

Upcoming demographic trends will compound
the challenges in employee recruitment and retention.

The Baby Boom generation comprises 78.2 million Americans.

The first wave of this group has already begun to retire, a process
that will accelerate over the next decade.

Firms will see a mass exodus of institutional knowledge that will be
hard to replace.

Many entice retirees to delay their departure in order to capture their
knowledge and to train others to step into these roles.

This shift could lead to labor shortages, particularly in technological
and health occupations.

The Small Business Economy: A Report to the President 5
Small Business Administration; 2009.

The growing non-profit sector is also reeling
from economic changes.

60% reported cutting operating budgets for 2009; 80% are
taking actions to control budgets

61% reduced travel budgets; 68% limited staff attendance at
conferences (often a primary source for professional
development)

45% of foundations eliminated salary increases

27% instituted hiring freezes

6% eliminated positions; 6% laid off staff

Foundations Respond to the Needs of Families Even as Their Assets Have Declined 6
Council on Foundations; 2009.

In a recent corporate learning strategy survey,
40% of respondents reported that the economy
had forced their organizations to reduce learning resources
to a high or very high degree.

67.2% of those surveyed said they were looking for ways to
be more efficient and effective with tightened budgets.

37.9% said their organizations were emphasizing learning
to a greater extent during the recession.

Source: Learning in Tough Economic Times, 7
ASTD/i4cp.; Aug 2009.

Major findings:
52.8% restricted travel to a high or very high degree
52.3% cut expenditure on conferences, seminars, and
workshops to a high or very high degree
Newer/cheaper methods of delivering learning, including
e-learning and other online options, gaining popularity

Best learning practices point to three emerging themes:
Involve subject matter experts in the learning process
Leverage technology better
Raise awareness of cost issues

Source: Learning in Tough Economic Times, 8
ASTD/i4cp.; Aug 2009.

“…Business leaders now understand that an ongoing financial and
operational commitment is required to leverage human capital to the
fullest, especially in difficult times. As economic uncertainty persists,
there is an opportunity for the learning function to play an even
more important role in preparing for the recovery. Contemporary
professionals are demanding as much learning content as they can get,
and there are a host of new technologies available to deliver it to them
formally and informally.”

Source: State of the Industry Report, 9
ASTD; Dec 2009.

Despite the worst economic conditions in several decades,
business leaders continue to allocate substantial resources
to learning functions.

In 2008, U.S. organizations spent $134.07 billion on employee learning
and development. This amount reflects direct learning expenditures such
as the learning function’s staff salaries, administrative learning costs, and
non-salary delivery costs.

Nearly two-thirds of the U.S. total ($88.59 billion) was spent on the internal
learning function, the rest ($45.48 billion) was used on external services.

Many organizations were forced to cut expenses in all areas of
the business, including training and development, but most maintained a
strong financial commitment to employee learning.

ASTD; Dec 2009.

Direct Learning Direct Direct Direct % of
Expenditure per Hours used Expenditure as Expenditure Expenditure Expenditure
FTE per FTE % of Payroll as % of as % of Profit for External
(Without Benefits and Revenue Services
Taxes)

Average Corporate Investments Trends
2008 $1,067.74 36.25 2.24% 0.59% 8.75% 21.99%
2007 $1,110.23 37.41 2.15% 0.56% 7.54% 25.18%
2006 $1,040.40 35.06 2.33% 0.52% 6.88% 28.07%
2004 $1.022.43 36.36 2.32% 0.63% 7.48% 28.87%
2003 $1,054.98 26.16 2.31% 1.01% 12.48% 23.23%
2002 $857.07 28.78 2.22% --- --- 22.63%
2001 $799.64 25.50 1.98% --- --- 22.56%

2008 Investment by Organization Size (# of employees)
1-499 $1,159.07 33.29 2.15% 0.69% 7.54% 21.16%
500-9,999 $1,013.02 31.90 2.37% 0.58% 12.39% 21.34%
10,000+ $1,073.29 40.35 2.19% 0.56% 7.35% 22.82%

ASTD; Dec 2009.

Areas of increased focus on training and
development over the next 12 months

High-potential employee development 47%

Leadership/management development 43%

Onboarding, orientation 30%

Regulatory, security and risk taking 29%

Job-specific - sales, customer service 28%

Job-specific - IT, finance, HR 23%

Job-specific - operations 23%

Source: Managing Talent in a Turbulent Economy: Where Are You on the Recovery Curve?, 12
Deloitte; Jan 2010.

Learning executives (LXs) revealed outsourcing
is anticipated to increase.

25.1% of LXs report that their utilization of external providers
would increase, compared to 24.2% in Q3 and 17.0% in Q2

The effects of the economy continue to be evident among LXs,
as a significant majority indicates the current economic
conditions will impact the learning function.

Only a small proportion (9.9%) of LXs indicates it will have no
impact on the learning function in the next six months.

Source: Learning Executives Confidence Index (LCXI) 4Q 2009, 13
ASTD; Dec 2009

Evidence shows that workers have incorporated e-learning
for their own self-directed activities on a massive scale.

Social networks, collaborating in online communities, and
cloud computing are transforming the way people
communicate.

The immense potential of social media portals as learning
and collaboration tools has not yet been realized, because
many professionals are just becoming familiar with them.

Learning experts understand the power of these new technologies
and have predicted a much more prominent role for them in the near
future, for both formal and informal learning.

ASTD; Dec 2009.

Intended use of Web 2.0 in next three years
1.7
Become more likely to
use Web 2.0 in learning
11.8 function

Use Web 2.0 in learning at
about the same level as
current use

Become less likely to use
Web 2.0 in learning than
86.5
current use

Based on responses from 743 high-level business, WLP, and HR professionals.

ASTD; Dec 2009.

Associations, non-profits and small businesses run
on interpersonal relationships.

Small business leaders assigned high significance to their employees
when defining their personal success as a leader (based on 6 point scale):

“quality of my staff ” (5.2)

“creating a positive working environment for all” (4.6)

“helping others to have income and opportunities” (3.9)

America’s small business owners are clearly more focused
on people rather than process.

Source: The Guardian Life Index: What Matters Most to America’s Small Business Owners, 16
The Guardian Life Small Business Research Institute; Nov 2009.

Drake believes Ascendis Learning Connection is a crucial tool for
today’s business environment, helping employees build skills and
talents needed for small & mid-sized organizations to compete
and grow in the new economy.

We agree that small businesses are the key to restarting our
nation’s economic engine.

We know from experience that easy, anytime access to affordable,
relevant learning experiences is vital for employees to remain
successful in their jobs.

We recognize that organizations need to be innovative and find
solutions to enable business growth.

For all of these reasons,
the time for Ascendis Learning Connection is now. 17


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18

Focus on Core Business in Turbulent Times

Focus on Core Business in Turbulent Times

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