Placing too much emphasis on the paper is a cultural failure of business. That most businesses place such premium is evident after a cursory review of any job post. Emphasis is given to diplomas over anything else.
There is no one in human resources who even cares to match the benefits paid by the company to increases in productivity by the employee. If someone did, they would make sure to find a way to improve the ROI of these expenses. They would council employees on the kind of education that would create measurable value to employee and company alike. And maybe, they would find alternatives at no cost; thus creating an asset without an offsetting liability. More on this later.
|Harvard Law Diploma|
Superior knowledge, on the other hand, can be easily monetized because it improves employee productivity. It is well documented that higher productivity across all businesses comes first from innovation, then from experience and last from capital spending. This insight debunks the myth that companies must incur high capital expenditures in order to succeed. Professor Jeremy Siegel from the Wharton school of business has done research that shows how, opposite to general belief, companies that spend more than their peers in capital equipment lag behind their industry. This phenomena, which grants higher importance to knowledge has been confirmed even for firms outside the US.
Peter Drucker, arguably the father of business management, identified that we live in the era of the knowledge worker, a term which he coined. Well, recalling the drivers of productivity described above, both innovation and experience are knowledge based. To get an idea of the power of knowledge as a productivity tool one must only look at the distribution of profits of Apple products. Around 80% of all profits go to 10% to 20% of employees. The rest of the employees get the other 20% of profits. Do you want to venture a guess which are the employees that get the bulk of the profits? Within Apple, each California employee produces on average 15 times more value for the company than employees in Asia. What's the difference? Knowledge. California employees get paid for what they know and for how they apply it when making important decisions. Employees in Asia are limited to what they can produce with their hands. In this case, skill is important but not as important as the specialized knowledge of the California engineers.
|Apple's Corporate Office|
Let's say that your business requires that your HR personnel learn about the Affordable Care Act; also known as Obama Care. You could bring in a payroll services supplier like Paychex. They could deliver a superficial power point presentation to HR. In my experience, most of these presentations serve only the purpose of making you feel like your vendors are working for you. Now that what really matters to you is that you raise the level of expertise within your team in such as way that you can be sure to not violate one of the many regulations; something that could cost the company a fortune.
Another alternative would be to have the members of HR attend the University of Pennsylvania, the ivy league school where people like Donald Trump graduated from. Can you even imagine all the traveling expenses and the tuition costs? How about all the time away from work?
Next, let's then say that you decide to send your sales team to Northwestern University to take the Content Strategy for Professionals: Engaging Audiences for Your Organization course. No doubt that better presentations will go a long way to improve closing rates.
And how much will all the education cost you company? Nothing; it's all free.
And just in case that your team still has a hard time giving up their fixation for the paper, these schools will grant a diploma for successful completion of every course and the corresponding tests.
Today, thanks to Coursera, your employees can attend the best universities in the world completely free and on their own schedule. Classes are available on-demand through the magic of the world wide wed. Your HR people can chose between many options for the course that's immediately most meaningful to the employee. There are general courses as well as programs on subjects at the forefront of technology.
I recently took Model Thinking at the University of Michigan. The course addressed all sorts of modeling techniques and software packages which are relevant to many fields. About 25,000 students attended the class with me. Sadly, more foreign students take advantage of this free education while Americans are notably disengaged.
As a manager, if you agree with the value of the education over that of the diploma, then you have to understand that the problem is cultural and that solutions must be driven from the top. Change the way your company hires. De-emphasize diplomas while placing more value on relevant knowledge that can be monetized right away. Change your education reimbursement program to one that rewards people for applying newly gained knowledge to their job. Motivate people to learn what they can practice immediately. Form study groups that can turn water-cooler talk into something productive for the company.
Unfortunately, this change will take quite a bit of time. We are dealing with entrenched beliefs, after all. Thankfully, the exponential improvements resulting from your efforts will be measurable and huge.
PS: Following is a list of the Business topics available in English through Coursera: