To: Manufacturing and Service Firm owners and their Chief Financial Officers
Re: Firm-specific Human Capital and Budgeted OJT
How much did the your firm budget for OJT last year? Probably nothing. If you didn't budget for it, but you did a lot of it (2% of payroll isn't a bad estimate), it's no wonder that it was pretty haphazard. (OJT in Japan isn't budgeted either, but it's anything but haphazard.)
You have a hidden investment in firm-specific human capital that is ignored by accounting rules and never appears on your balance sheet; it's probably as big as your investment in physical plant. You're wasting it.
You hire people; six months later they're trained employees who have acquired firm-specific skills and now know how to do things the more-or-less right way. But you didn't budget anything for their on-the-job training. Think about it.
As you are aware (you're the boss), a firm doesn't ever get something for nothing. You paid for that firm-specific human capital with productivity adjustments, mostly managers' time + coworkers' foregone production + worker's learning curve (in units of production over time.) But the acquisition of skill was unbudgeted, so you didn't have a handle on it as financial officer; and it was unstructured and haphazard out on the floor, because you didn't produce, purchase, or employ dedicated serviceable proprietary training materials.
Try some structured OJT for a change. We have developed an approach to skill acquisition using Quicktime® digitized videos that allows you to do some budgeted OJT. You spend a small amount of money to recapture your own company's firm-specific human capital and reinvest it.
I am bringing it to your attention, so you can call me on the phone and discuss it further; you can see a quick demo (footnote 1); you can make a rough calculation of your return on investment (it's astronomical); and then you can tell your HR department to implement our approach. HR departments generally (and I've called enough of them to feel statistically significant here (footnote 2) ) haven't the faintest idea what I'm talking about, when I draw the connection between planned, budgeted, structured skills acquisition and lowered overall costs. The discussion is over when the Director of Training and Development tells me there's no budget for OJT (but we'll call you when we decide to go in that direction.) There's also the poaching problem; the implementation of training by any means other than the techniques currently in use raises the HR people's hackles (footnote 3).
Or you can go ahead and rightsize your training department, by outsourcing the most critical component of it. We'll make cheap, serviceable digitized videos of competent workers' moves. Get a few cheap laptops to play them back on, and you're in business. No more Hollywood.
You'll save a ton of money; you'll have an elegant set of useful how-to's; and you'll be investing your company's firm-specific human capital instead of wasting it. Call me.
Let me add one more thing: Wal-Mart has been using a Quicktime® approach for five years (Quicktime® was invented in 1992.) They told me that they use it for everything from POS training to forklift operator certification; that they're not concerned about anybody else imitating them because, "We're too far ahead,"; that "It's the secret of our success,"; and that their stock price reflects its effectiveness (personal communication from Wal-Mart's Manager of Information Strategies, July 98.) Your firm probably also has a forklift or two.
One last note: If your firm is already using short Quicktime® digitized videos for skills acquistion, we would like to hear your success stories. We are collaborating with some researchers in the academically interesting field of cognitive neuroscience, and would like to index what sorts of skills can best be input into the brain by this technique (and just as interestingly, if there were any skills that just didn't seem to work that way.) A short email is all we ask. katz@frogojt.com
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Footnote 1: I'll show you "How to Punch Oblongs in Sheetmetal" 2 reps, running time 9 sec; "Dismount" 11.25x22 truck tire changing, 8 reps, rt 115 sec; and "WristShot" 3 reps, rt 15 sec. That will require about 3 min of your time; you will then know more about how this impacts a manufacturer's or service organization's bottom line than I do.
Footnote 2: If your HR department is already employing Quicktime® videos for skills acquisition, God bless them and give them a bonus.
Footnote 3: In fact, there would be just as much over-the-shoulder work as there is now; our technique only increases [by an order of magnitude] the number of repetitions of skill demonstration the trainee experiences. And the HR people would still be the repository of soft skills, of course. (If you still need that.)
FrogOJT Systems for Structured OJT.
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