\n\tBy Margery Weinstein<\/p>\n
\n\tPreparing your employees for the immediate work in front of them is a challenge. You already have a big task on your hands making sure they understand how the new products they will have to sell work and how to use your new customer relationship management software, for example. Not to mention all the soft skills you\u2019re charged with teaching them\u2014communication, business acumen, and, eventually, how to function as managers. Training a workforce in those skills is a lot of work, and, unfortunately, also costly. In unstable economic times, more Learning and Development functions may try to start covering their expenses\u2014and maybe even turn a profit for their organization\u2014by offering training services to individuals outside their company\u2019s payroll. While most companies are still mastering effectively training their own workforce, some, such as Training magazine Top 10 Hall of Famer The Ritz-Carlton Hotel Company, have set up for-profit academies open to the public.<\/p>\n
\n\tRecognition=Opportunity to Teach Others<\/strong><\/p>\n \n\tWhen Ritz-Carlton won the national Malcolm Baldrige Award not once but twice in the 1990s, the company knew it had an opportunity. The hotel, renowned for its customer service, had become a master at creating engaged and loyal guests. The way it did that was through a workforce that fully understood what it meant to keep those guests happy. The company\u2019s Learning and Development professionals wondered if they could benefit other organizations by sharing the lessons they taught their own employees. In addition to being a good corporate citizen, the company knew that sharing its customer service training wisdom also could generate a new profit stream. It wasn\u2019t long before The Ritz-Carlton Leadership Center was born.<\/p>\n \n\t\u201cThe Ritz-Carlton Leadership Center, a corporate university open to the public, was fortunate because we had a built-in platform,\u201d says The Ritz-Carlton Leadership Center Vice President Diana Oreck. \u201cWe launched The Leadership Center in December 1999 as a result of winning the national Malcolm Baldrige Award for the second time. We won the award for the first time in 1992 and then again in 1999. Only five companies have ever won the award twice. There was and continues to be a strong demand to benchmark our culture transformation, legendary service, and leadership practices.\u201d<\/p>\n \n\tLet the Market Drive Curriculum<\/strong><\/p>\n \n\tTrainers often have their own learning ideals that may or may not be tied to the needs of their business. They may think, for example, that it would be useful for all employees to learn a second language over the next five years with in-house help or for each worker to master a new technology that only a fraction may end up using. Those ideals that are not tied to business goals usually aren\u2019t the best approach when you are just serving internal clients. But there definitely is no place for them when you are operating a public, for-profit academy. Oreck says she and her colleagues at The Ritz-Carlton Leadership Center developed a curriculum designed to cater to the specific needs their customers expressed to them. \u201cA key to our success is we listen carefully to our customers,\u201d says Oreck. \u201cBy doing so, we are able to design at least one new relevant offering per year to suit their needs.\u201d<\/p>\n \n\tThe most notable example of that is The Ritz-Carlton Leadership Center\u2019s Radar On-Antenna Up\u2014The Ritz Carlton\u2019s Fulfillment of Unexpressed Wishes & Needs program. \u201cIn 2008, during the time of the financial crisis, we received a call from a financial advisor who had several high-net-worth clients,\u201d says Oreck. \u201cHe told us it was not business as usual. Some of the clients he had had for years said they were scrutinizing everything and they were upset they had to call him to find out what was happening during the economic crisis. They asked him, \u2018Where is your anticipatory service?\u2019 That is how we came up with the idea for the class.\u201d<\/p>\n \n\tStart Small<\/strong><\/p>\n \n\tIf your Learning and Development function is at the point where you have fully mastered serving your internal clients and are ready to branch out to serving the public, make plans to do so in increments. \u201cDo not try to be all things to all people,\u201d Oreck advises. \u201cStart small and only offer one or two programs that you know your company excels at. Once those are in demand and have been refined, move to offering a more expanded curricula.\u201d<\/p>\n \n\tThe evolution of The Ritz-Carlton Leadership Center illustrates Oreck\u2019s principle of taking it one step at a time. \u201cWhen we launched The Ritz-Carlton Leadership Center in December 1999, we had only one offering, Legendary Service, which we knew we really excelled at,\u201d says Oreck. \u201cToday, we have eight offerings on a variety of topics. We have introduced one new offering approximately every 18 months and keep refining it. We do not recommend offering a big suite of new offerings all at once.\u201d<\/p>\n \n\tStrategically Price Offerings<\/strong><\/p>\n \n\tGiving your wisdom away to the public for free won\u2019t work, but neither will charging so much money that other organizations would be hard-pressed to afford it. You need to take a moderate approach that more than covers the expenses of operating the public curriculum and each year turns more and more of a profit. \u201cIt is important to understand demand and also to price your offerings correctly,\u201d Oreck recommends. \u201cDo not deeply discount your offerings. However, it is critical that the content can be easily applied and is relevant. When that happens, people are willing to pay a reasonable price.\u201d Oreck says it\u2019s helpful to take a look at what other public, corporate university-run academies are charging for their offerings. \u201cStart by knowing what your competitors charge. Then decide what the market can bear,\u201d she says. \u201cYou will know if there is price resistance because people will say they cannot afford it.\u201d<\/p>\n \n\tLet Legal In<\/strong><\/p>\n \n\tIt may be tempting to charge ahead with plans to get your public curriculum off the ground as fast as possible, but you also need to consider the legal aspects of what you are doing. \u201cThe main mistake companies make is not consulting with their legal department early in the process when they are opening their corporate university doors to the public,\u201d says Oreck. \u201cIt is key that your intellectual capital is protected. It is important to know what material can be copyrighted. How much, if any, of your material are you willing to share electronically?\u201d Including your legal department in the planning process protects the Learning and Development function from charges that it shared materials it was not authorized to share. \u201cIt is important that people protect their proprietary information,\u201d says Oreck. \u201cWith today\u2019s technology, many students want to photograph slides that are proprietary, so with legal\u2019s assistance, companies need to determine if that is a practice that is allowed. If not, there must be the appropriate language in the enrollment documentation that video, photography, and taping are not permitted.\u201d<\/p>\n \n\tThe Right Governance Structure<\/strong><\/p>\n \n\tYour internal Learning and Development function should be structured to ensure smooth processes and efficient operation, and so should your public curriculum offering. You can\u2019t just put the classes together and then haphazardly roll them out. The classes need to be part of a larger structure that can be branded to the public as a unified offering. \u201cThink through governance issues carefully. Having the right governance structure with a strong charter right from the beginning avoids headaches later on,\u201d Oreck stresses. \u201cWe have an Internal Leadership Center Advisory Board that meets twice per year and is made up of senior leaders in our organization. It discusses The Ritz-Carlton Leadership Center\u2019s marketing plan, trends in corporate universities, budgeting issues, and curricula, etc.\u201d<\/p>\n \n\tA well-organized program that offers proven benchmarks for success is a value-add to other organizations\u2014and to your own in the potential profit you will turn.<\/p>\n \n\tThe For-Profit Rollout\u2014Five Steps to Success<\/strong><\/p>\n \n\t\u201cBecoming a profit center requires a shift in culture at the leadership level. Training is no longer a department. Effectively, it\u2019s a small business,\u201d says Dan Cooper, partner and CEO of e-learning and development provider ej4. \u201cTraining leadership must go from a corporate mindset to an entrepreneurial self-view.\u201d Cooper and his colleagues at ej4 offer the following advice for companies that seek to develop for-profit training offerings:<\/p>\n \n\t\u201cIt doesn\u2019t start with the product. It\u2019s not about training programs or curricula. One of our mottoes is, \u2018Without a need, don\u2019t proceed.\u2019 Here\u2019s the process:<\/p>\n \n\tSTEP 1:<\/strong> Identify a potential constituency with money.<\/p>\n \n\tSTEP 2:<\/strong> Find their unmet needs. What targets are they missing? What problems are they dealing with? What is so important to them that they\u2019d take money out of their own pockets to resolve?<\/p>\n \n\tSTEP 3:<\/strong> Value the need. How much are those issues costing them? How much can you save them? That\u2019s your justification. If it\u2019s not more than your cost, then you can\u2019t proceed. We know lots of situations where there is tremendous need, but there\u2019s just no money in it.<\/p>\n \n\tSTEP 4:<\/strong> Create the solutions for it. This can\u2019t be the traditional expensive classroom and boring click-and-read e-learning stuff. Your for-profit constituencies don\u2019t have that kind of money, and they won\u2019t put up with it. It needs to look like TV. It needs to be short. It needs to be tactical. It needs to be delivered to all six screens (TV, PC, smartphone, tablet, iPod, route handheld).<\/p>\n \n\tSTEP 5:<\/strong> Sell it. This isn\u2019t communicating it. This is a complete marketing and sales effort in the traditional sense.<\/p>\n \n\tIt\u2019s the classic business cycle. You\u2019re an outside training provider now. You\u2019re only as good as your value above and beyond your cost.\u201d<\/p>\n \n\tProfit Center Quick Tips<\/strong><\/p>\n By Margery Weinstein<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"cybocfi_hide_featured_image":"","footnotes":""},"categories":[12],"tags":[16],"class_list":{"0":"post-9520","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-magazine","7":"tag-feature","8":"magazine_issues-march-2012"},"acf":[],"yoast_head":"\n\n
\n\t\tcustomers\u2014to design a public-offering curriculum. It is better to base curriculum on the expressed needs of your customers than on your own training ideals and abstract goals.<\/li>\n