Basic training.

The passive classroom model (yawn!) may have been fine for school, but it's a colossal failure in the office. The solution? Train virtually.

In more than 15 years of working with companies around the world, I can count on one hand those whose learning systems weren't complete failures at achieving their central mission: improving employee performance.

That may sound harsh, but it's true. Whether we face up to it or not, corporate America's learning systems are critically ill - and getting sicker.

It's not that CEOs don't care, or they wouldn't be spending more than $60 billion a year trying to teach workers to do their jobs better. But most of that money is wasted because nearly all corporate training programs are designed to fail. They ignore the ways in which people learn most effectively; they rely on outdated training methodologies that do little more than convey information (and don't even do that very efficiently); they barely tap the potential of new learning technology; and they measure training effectiveness inappropriately - or not at all.

Everything that's wrong with corporate training can be stated in four words: it's just like school. The school model was intended to satisfy observers that knowledge is being acquired, for short periods of time, but not to help people acquire practical skills. And business has been going down the same dead end.

Fortunately, it doesn't have to be that way. Computers allow us to create virtual worlds that closely simulate reality, allowing employees to learn real skills by practicing real-world tasks. That's virtual learning, and its effectiveness can be measured in the only way that matters - through improved job performance.

How People Learn Best

Research in the fields of learning science, cognition, and artificial intelligence confirms what common sense tells us: people learn best when they can practice, fail, and try again under the guidance of someone who can share relevant knowledge and experience. and their masters have practiced this for centuries.

But one-on-one instruction is too costly and labor-intensive to be a practical solution for most companies. So most corporate training programs emulate the school model, using manuals and classroom lectures instead of practical, hands-on learning. The underlying premise is that providing employees with more information will improve performance - which ignores the reality that effective training is about what employees can do, not what they know.

Many corporate training experts recognize the limitations of traditional training and view PC-based solutions as a possible remedy. These systems lower costs per trainee, due to lower travel expenses and less work time lost, and offer self-paced instruction to accommodate individual needs and consistent and replicable content delivery. Top experts can serve as instructors, with minimal demands on their time and "just-in-time" training delivers assistance and support only as it's needed.

Computers could revolutionize the way companies teach job skills. But so far, most computer-based products have as much to do with learning as penmanship has to do with creative writing. Dig beneath the glitzy surface of today's page-turning software and all you will find is a training manual in multimedia disguise - one that's no more effective at improving performance than a printed version.

The IT Solution

Computer-based training (CBT) comes into its own when it is used to create highly realistic simulations of real-world situations, so employees can practice everyday skills. The flight simulators used to train airline pilots, for example, can recreate virtually any circumstance that a pilot might encounter in the air. This allows trainees to practice and eventually perfect necessary skills and judgment without putting a single passenger at risk.

Like flight simulators, the best of today's CBT systems are designed to feel like tile real thing, so trainees suspend their disbelief and become engaged in the role-playing. The simulations provide a number of options to trainees when they fail: they can try again, do additional research, call on a coach for advice, or listen to an expert tell a story related to the failure. Good simulations also avoid telegraphing their punch; if the appropriate response is obvious, trainees will fall into the "student mode" and parrot the desired behavior without learning anything.

Today's technology makes it possible to deliver the necessary realism using everything from text to animation to video clips. It also allows trainees to choose their own path through a simulation and they can progress at their own pace.

To heighten the realism, well-designed simulations cause the "characters" in the scenarios to respond to the trainee's actions. Scenarios also can throw some curves, which is helpful since dealing with the unexpected is a critical skill.

Fear of the Unknown

But while simulation training might be superior, most companies are reluctant to replace traditional training methods. "Learn by listening" propagandists have brainwashed most of us since our earliest days in school. It's difficult enough to make the jump to a "learn by doing" mindset, let alone to embrace learning through failure, which, for most CEOs, is the real "F" word. What really rocks traditionalists, however, is the virtual aspect of computer-based training. They just can't accept that training works better without traditional tools.

IBM is one company that took the leap, using CBT to improve its sales force's ability to sell consulting and services. "We needed to make information about our capabilities more easily accessible, leveraging sales force success stories lessons learned in challenging customer situations," recalls Leanne Drennan, program manager in the IBM Global Services Institute.

"In an environment like IBM, where our sales people have to be articulate regarding so many products and services, we needed a way to get their attention," she says. "By showing them new ways to build client relationships and increase customer satisfaction, we increased their motivation and ability to identify new services opportunities."

IBM's system has two parts: "Ask the Experts" and "Practice." "Ask the Experts" simulates conversations with experienced sales people who have sold services successfully. Students learn about the experts' experiences by selecting a question from a series of menus. An expert answers via a video clip; 300 are included in the system.

Students create a unique path through the system by choosing the questions that apply to issues they currently face. For example, a sales person who needs to increase services revenue can discover business issues that lead to good sales opportunities and how to help customers learn about IBM services.

With "Practice," students try their hands at selling services in real-world contexts. Simulated sales scenarios include videos of customers who get angry or leave if students "say" the wrong thing or discuss issues unimportant to the customer. In one scenario, if students begin to talk about IBM before discovering all they can about the customer's business, the customer turns to them and says with irritation: "What makes you think we're interested in that?" A coach then appears to explain why the selection did not work and to suggest a more appropriate course of action.

When students ask appropriate questions, on the other hand, the customer provides information to move the sale forward.

A Better Solution for Growth

Arguably, no company has integrated computer-based systems into its training program as extensively as Anixter, a leading global provider of networking and cabling solutions.

"Training is a critical function for us because of our rapid growth," said Julie Anixter, VP of training and learning systems. "We have 6,000 employees working in 200 locations worldwide, more than a thousand of whom have come on board in the last three years. Our challenge is to maximize competence and readiness at all levels of the organization."

Anixter is using CBT programs to create a core curriculum covering five key topics: orientation, sales, management, product, and sales systems. All rely heavily on realistic simulations of actual work situations. "Our goal is to embed learning into everyday work, so that it becomes a continual process, not an occasional exercise," Anixter says.

One system teaches coaching skills. "Although coaching employees is an essential and strategic skill for our managers, their abilities varied widely, in part because we never had developed a company-wide model of what effective coaching entails," says Alan Drizd, VP of human resources. "And to make matters worse, most of our best coaches were too busy managing, selling, or running operations to teach others."

The system includes highly realistic simulations of six coaching scenarios, which allow trainees to learn and practice in a risk-free environment. Inappropriate or incorrect responses by the trainee cause an on-screen coach to appear and offer guidance. Trainees also can access short videos featuring Anixter's best coaches, who use "war stories" to share personal experiences and provide insights into the company's views.

"We still are figuring out how to measure the effectiveness of computer-based training," says Drizd. "We expect it to reduce classroom training by at least 50 percent, so the systems will pay for themselves rapidly. But the real value will come from making learning an everyday occurrence at Anixter, which will result in better performance across the board."

Anixter President and CEO Bob Grubbs adds, "Computer-based training is proving its worth for us, and is becoming part of the fabric of daily life throughout the company because it is available in locations around the world."

ABN AMRO Teaches Finance Basics

The CBT systems adopted by IBM and Anixter were custom-designed, but the technology and educational precepts underlying these systems are finding their way into commercially-available products as well. ABN AMRO is using one such product, called Corporate Finance Advisor, to establish a common corporate finance vocabulary' and consistent analytic procedures throughout the bank.

Corporate Finance Advisor is a multimedia CD-ROM-based series on applied corporate finance developed by Cognitive Arts and marketed by Learning Insights, a provider of training and performance support programs for business professionals.

"Our assistant VPs and officers have widely varying backgrounds and skill levels in corporate finance, and this made it difficult to conduct meaningful classroom training," said Judi Davenport, senior VP of training at ABN AMRO. "We needed a way to get them all on the same page so the classroom sessions could be productive."

The Corporate Finance Advisor series includes a total of 15 scenarios, offering more than 12 hours of instruction, that teach qualitative and quantitative analytic skills such as: evaluating historical and projected operating cash flow; evaluating the financial merits of a capital expansion; identifying the opportunity cost of capital; and quantifying debt and equity funding requirements.

In each scenario, trainees play the role of an entry-level finance professional with the fictitious firm of DSG Monroe Banc. A consistent storyline runs through all three titles, although each can be used independently. Trainees begin the simulation by viewing a video vignette in which the DSG managing director provides background information about the project. Trainees then work through the assignment, accessing information or assistance as required. Incorrect or incomplete responses trigger a follow-up response from the managing director.

Trainees also can access video vignettes of commentary by corporate finance experts from manufacturing firms, banks, investment banking firms, Big Five accounting firms, financial ratings services, and academia. "An important feature of the system is that it teaches trainees to support their assertions with substantiating evidence," says Davenport. "Also critical is the just-in-time nature of the training; it's like having an expert sitting at your shoulder and knowing what you need to learn at that moment."

Completion of the Corporate Finance Advisor series is now mandatory for all assistant VPs and officers, but the group of users is much larger and more varied than they had initially envisioned, says Davenport. "Several senior staff members have used the system as a refresher, and other departments, such as audit and tax, use it to extend their knowledge."

Davenport estimates that the cost to train 20 employees with the CBT model is about one-tenth the cost of traditional classroom training. "But focusing on costs misses the boat...we would offer Corporate Finance Advisor even if it cost more, because it provides superior results," she said. "As a result, we are looking at additional opportunities to enhance our training efforts with computer-based simulations."

Beyond the Cost Factor

Companies tend to want to justify the investment in CBT on the basis of faster and cheaper, because these attributes can be expressed in numbers that are easy to understand. But training is not well-suited to traditional measurement methodology because most jobs resist quantification, making it difficult to express improved job performance in numbers. And even with jobs that lend themselves to objective measurement, it's tough to sort out the contributing factors. Did a salesman sell more product after training because of what he learned, or because of a 20 percent price cut on the product?

The most meaningful measure of the effectiveness of CBT also may be the most straightforward: Can the trainee complete the program successfully? When pilot trainees can land a simulated plane without crashing, they're given command of a real cockpit. Why not conclude that if trainees can navigate through multiple simulations without failing, they have learned what they were supposed to and have demonstrated a new level of competence?

This line of reasoning is leading some companies to specify that their systems include a "test" scenario - without the help and support elements of training scenarios - for evaluation purposes. Trainees' scores on the test scenarios will provide these companies with a measure of performance improvement and also will help pinpoint potential problem areas.

Only the trainee can tell you if he or she has learned anything, so subjective evaluation can prove critical. Most people hate training with a passion, because it's boring and a waste of time. So if they say that CBT is fun, or that they learned something new, or that they believe they can do their job better, that's a big factor.

Another way to evaluate effectiveness is the degree to which CBT engages trainees' emotions. At one consulting firm, for example, trainees routinely compare computer-simulated war stories about how they got "fired" or which part they messed up. To listen to them, you might think they were describing events that really occurred. And that may be the best evidence that real learning took place.

Another way to measure the training's effectiveness is to observe changes in behavior. When trainees are doing a better job, there are lots of indicators - their attitudes improve, they work harder, they get more done, they make fewer mistakes, and they have more fun. These empirical measures provide ample evidence that CBT works.

Will CBT make traditional methods obsolete? Possibly - if CEOs can get past their understandable mistrust of "radical" changes and insist on training that actually works.

For most companies, training is an expensive failure with no positive impact on the bottom line. But it doesn't have to be that way. Training can improve corporate performance, and learning can be a key strategic asset. First, however, CEOs must rethink basic assumptions and be willing to learn a new way to learn.

Roger G. Schank is chairman and chief technology officer of Cognitive Arts Corp. (formerly Learning Sciences Corp.), a Chicago-based company that designs and markets computer-based learning systems.