hr jargon

ne of the most important criteria used by employees to decide whether to join or remain with the organization is the line of sight that he has with his career path and learning he will get. But how does this learning take place? Is it through training or on job interaction or feedbacks? Over the years various companies have been putting different weightages to these learning modes and there by financing activities supporting these modes. Some have been successful but many have failed. One of the best examples of failure is the millions of rupees spent on the training of government and PSU employees with very little to none amount of benefit percolating to the organization. Employees start seeing training as opportunity to take time off job and tour with their friends and family. But learning is not only important from employee's point of view but organizations also want employees to learn in order to be innovative and survive in the fierce competition of modern world. Innovation is typically understood as the successful introduction of something new and useful, for example introducing new methods, techniques, or practices or new or altered products and services. The term innovation may refer to both radical and incremental changes in thinking, in things, in processes or in services. Invention that gets out in to the world is innovation. The goal of innovation is positive change, to make someone or something better. Innovation leading to increased productivity is the fundamental source of increasing wealth in an economy.

And how can this be made possible. The best way to improve the probability of innovation is to make sure that employees learn continuously. But employees must also work in order to contribute to the productivity. Thus it is important to learn on the job and thus be capable of innovation. It was one of the main reasons for 3M allowing its employees to spend 15% of their time on working on their own concept project and every body knows 3M to be innovative. 70-20-10 principle is one way to solve this dilemma of the organization regarding the stress to be given on the modes of learning. According to this approach, the majority of learning (70%) takes place on the job. A smaller portion (20 %) are gained through personal development, such as mentoring or appraisals or feedbacks. The smallest portion (10 %) comes from inclass training or through self-study or by attending seminars and conferences. The origin of this principle can be traced back to Eric Schmidt the "Google man", when he revealed this formula to an interview in December 2005. He was little known outside Silicon Valley even with his Ph.D. from the University of California at Berkeley and research stints at Bell Labs and Xerox's famed Palo Alto Research Center. But his advent to the scene of Google made him a hot cake in the market. He claims to have used this formula to stay on track while innovating across organizations. His formula is simple 70-20-10. In practical terms it simply means spend 70 percent of your time on the core business, 20 percent on related projects, and 10 percent on unrelated new businesses.

70-20-10 is more a way of working than a formula. It can be as easily applied to learning and innovation as to business.

By Mukund Madhav

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SEPTEMBER 2008

hr jargon
Investing into each of these modes of learning brings different returns for different people, depending on their education level and work experience. But all said and done the three modes are not mutually exclusive. All three components are necessary for skill development and learning. In fact, the best results are likely to occur when all three of these components are used to support one another. Together with Larry Page and Sergey Brin, Eric lived by this formula at Google. Google's 70-20-10 rule breaks down as follows: Core business (70%): It includes the business that is the back bone of Google's finances and earns most of the revenue: AdSense, AdWords, Google Search. Related projects (20%): These are the products and services which attract the consumer towards Google but do not earn much of revenue by it: Froogle, Google Desktop, Google Local, Google News, Google Print, Google Stocks, Google Toolbar, Google Video. New business (10%): They include the prospective future business earners for Google. Concentrating on these will help it developing future applications and opportunities: Blogger, Google Mini, Google Movies, Google Reader, Google Talk, Google Wi-Fi , Picasa. The break up as adopted from Google website is shown above. All Google employees spend there time in the same proportion to be devoted to the activities under the three heads given above. Management at Google spends 70 percent of time on core search and ads, 20 percent on adjacent businesses, ones related to the core businesses in some interesting way and then 10 percent of time on things that are truly new. But how can such accurate division of time be made possible. At Google Eric put the projects belonging to different heads in different rooms. That way, if one was in one room too long, he knew he was not spending his time correctly. It was sort of a stupid device, but it worked quite well. But with time people actually started managing this on their own. Different organizations have found different ways of implementing this. But overall implementation of this rule in general can be done in three steps as follows: 1) Planning: It refers to the proposed or tentative project or course of action. In the planning phase the following requirements must be met: l One should identify one's development need. It could be based on the kind of project he is involved in or the kind of work he wants to be involved in. It can also be something that he just wants to try out of curiosity. l It should be followed by creation of a plan for meeting one's development need. It is done by describing development need, actions, expected outcomes, needed resources & support, follow-up actions, and timeline. l Plan should then be confirmed with the manager and made a part of appraisal process and feed back. The specifics milestones required to be reached in order to make the plan a success and be capable of measuring its progress must be defined.

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hr jargon
70-20-10 is more a way of working than a formula. One can not put this formula and expect it to work automatically. It takes a lot of time in implementing it in the organization.
2) Implementation, follow-up and reporting: In this phase the thing planned for must be done. The exact time planned for a specific activity must be devoted to that activity whether it be on job, training or feedback based activity. Monthly and quarterly reviews help in checking whether the plan is on right track and following up the same. It includes the following components: l Engage all the stakeholders from the outset itself. l Action should confirm to the plan l Continuous feedback must be sought and deviation if any from the plan be addressed. l Document all the results 3) Analyze l At the end of the day check if you spent your time in the proportion planned for. l Look for the learning's from each mode and combine them together to get the broad perspective. The HR implicationis simple. HR must be careful in selecting the kind of training the employees are sent to for attending. And employees should not be sent to attend too many or too few such programs. Rather, it is better to plan training programs based on training need as discussed and documented by the employee with his manager. For this to happen HR manager should work in close coordination with line manager to avoid communication gap related to the training and learning requirements of the employee. Line manager must feel free to share his reservations and suggestions on the training requirements sent by HR or asked for by the employee. The 70 % mode of learning can be done by engaging in work assignments which provide readily available opportunities for learning - this philosophy is at the heart of the "70" approach. Unfortunately, this mode of learning often receives too little attention. People fear to learn on job as they feel they can either learn or work. With some simple planning, implementation, analysis, and follow-up, one can realize and utilize the opportunity for great rewards from on-the-job learning. The 20% mode of learning is based on appraisals and feedback. Mentoring, followed by a large number of organizations, is important in this mode of learning. The appraisals are normally annual or six monthly in organizations but feed back must be made more regular may be weekly followed by monthly reviews. This mode of learning helps a person in gauging the gap between expectations from him and his performance. The 10% mode conforms to training modules, workshops, seminars etc. They constitute a small portion to learning but they help in increasing the probability of learning via 70% route. They help in getting to know the new state of art technologies and processes being developed or expected in future. Nokia follows this strategy of 70-20-10 in all its projects and day today working. The key ideas behind 70-20-10 at Nokia are that it describes the ideal mid- to long- term average proportion of skill renewal solutions. It helps in utilizing and realizing available onthe-job skill renewal opportunities at Nokia without much expenditure. It also helps in keeping the ideal proportion of learning solutions mix flexible. When Coca Cola faced the problem of attrition it also implemented the 70-20-10 strategy to cut cost and maximizing the learn ability. At Coca Cola 70% time is spent in on job training (OJT), 20% on formal training and rest 10% on personal coaching. With the success of Google many organizations and even universities started working on this formula. But there is a catch. 70-20-10 is more a way of working than a formula. One can not put this formula and expect it to work automatically. It takes a lot of time in implementing it in the organization. Moreover there is a chance that people use this opportunity of to work on project and take individual interest over organizational interest way out is to ask the employees to document whatever they do and get it cleared by their manager before taking it up as a project or activity. 70-20-10 are not water tight compartments, they support each other. 70 are cascaded by 20 by seeking coaching and feedback to complement on-the-jobtraining, seeking coaching to support problem solving and enhance performance in demanding situations. In practice, this entails creating and documenting a plan with manager or an experienced colleague, and meeting regularly over a period of time to discuss .360 degree feedback can also help in this cascading. 70 is cascaded by 10 by participating in training programs or conducting independent study to complement on-the-job-training. Reading articles, magazines, books, e-learning solutions, or training programs can go along way in this. The 10 part of learning acts as a booster to the 70 learning helping the person in better understanding the job in light of new innovation and technology to be capable of innovating. Does this mean that the secret to learning and innovation has been discovered and all employees can be made highly efficient and effective by strictly enforcing this rule? No not at all. The innovativeness will still depend on the employee and his creativity. But this formula provides a framework with in which the HR can work to improve the chance of effectiveness of training program and increase the probability of HC innovation. So let's play 70-20-10 game!
Mukund Madhav is a student of XLRI, Jamshedpur.

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