01 June 2021

The Skills Obsession: Why Skills Inventory Is a Nut Worth Cracking

Stacia Garr
Co-founder & Principal Analyst

TL;DR

  • This is the 7th episode of our podcast: The Skills Obsession.
  • In this episode, Stacia Garr and Dani Johnson of RedThread and Chris Pirie of LITNW interview, Rob Lauber, former McDonald’s CLO
  • What is McDonalds Archways Program and why does it make sense for the business side of the organization?
  • Skills profile, skills inventory is a nut worth cracking
  • How McDonald’s supports skills and upskilling into different careers within the organization and valuable careers outside
  • A special thanks to our sponsor, Workday, for its support of this season!

 

Listen

Listen to my podcast

Guests

Rob Lauber, former McDonald's CLO

DETAILS

Truism 1: McDonald’s employs a lot of people. Truism 2: it doesn’t care that much about those people, so long as they flip the burgers OK, right? That 2nd one is totally wrong, as we find out in our great conversation with the giant company’s former CLO, the very engaging Rob Lauber. In fact, with its pioneering Archways Program, thousands of entry-level staff get amazing on-the-job training, but also money and support for up-skilling—upskilling that the corporation is perfectly ok with them using to move on, often to full-time education or valuable social careers like healthcare. Even more interesting: for every dollar put in the Archways Program, McDonald's directly benefits with by $3 back. Skills and what they mean (including some refreshing skepticism from Rob about what the robots really will take off us) has been Rob’s own ‘obsession’ over a storied career, so tune in for more on running training at mass scale—including some fascinating advise on what CLOs can do now, today, in terms of available company data. It’s enough to make you hungry.

Connect with him on LinkedIn here

Check out the Archway Program here

Now out of the Golden Arches, Rob’s new endeavor, XLO Global, is here

Webinar

Workday will host an exclusive live webinar towards the end of the season, where you can meet the Workplace Stories team of Dani, Stacia and Chris, and join in a conversation about the future of skills and skills management. Find out more information and access content at www.workday.com/skills. 

Partner

We're also thrilled to be partnering with Chris Pirie, CEO of Learning Futures Group and voice of the Learning Is the New Working podcast. Check them both out.

Season Sponsor

We are very grateful to Workday for its exclusive sponsorship of this season of the Workplace Stories by RedThread Research podcast. Today, the world is changing faster than ever, and you can meet those changing needs with Workday; its one agile system that enables you to grow and re-skill your workforce. Workday is a financial, HR and planning system for a changing world.  

TRANSCRIPT

Key quotes:

We did a study and essentially it showed a 3:1 return; for every dollar we put in the Archways Program, McDonald's directly benefited with a $3 return. So it was pretty easy to justify the program on the business side.

I do think that skills profile, skills inventory piece is a nut that I think is worth cracking.

Marketing's typically led by insights; they take the data, they drive insights, and then that drives the product. I think the HR/L&D organizations need to get much more disciplined and probably operate more in a parallel to the way of marketing organizations.

The CLO has an important role to play there in terms of almost demanding that the people analytics team is providing the insights that help set the agenda and the strategy for what L&D needs to pursue.

There's a huge amount of rich data there that L&D professionals can really draw upon and go after which on the business side are very meaningful in terms of their impact. It could be as simple as you go look at customer complaints and you can identify all the skill opportunities there around products not created correctly, regardless of industry—customer service experiences, not being what you would want them to be, those kinds of things

Stacia Garr:
Today were talking to Rob Lauber, who is currently CEO and founder at XLO Global, but was recently the CLO at McDonald's, which included being Dean of the Hamburger University, and before that he was the CLO at YUM! Brands.

Rob Lauber:
The people functions, HR functions, whatever you want to call them, in organizations need to operate like marketing organizations. And in marketing that's figured out, because data and insight drives action. And I don't think that most HR organizations in the country think about it that way, or globally even think about it that way. It's probably a few I'm sure, but I do think that there are far too many parallels, and not enough action.

Stacia Garr:
Today, we talked to Rob about how to operate a system at massive scale. We discuss frontline workers, and really what a difference skills programs can make in their careers. We talk about automation and AI, and how we can be thinking about freeing up people's resources to do new types of service.

Rob Lauber:
The biggest challenge is always scale and reach. You have an organization where in the US, for example, you're going to hire a million people into that system every year, right? So 3000 people a day are coming onto your system, 3000 people are coming off your system; that creates a lot of reverberation in the organization around having really good, repeatable, easy to execute systems in place, particularly around how you help people learn, or you can't possibly keep up. And that's got a downstream impact, obviously, on the customer experience.

Stacia Garr:
So next time you go into a McDonald’s, and think about that person who's giving you that Happy Meal to keep those kiddos quiet, think about everything that had to happen for that person to be ready to deliver that with a smile.

Rob Lauber:
So my name's Rob Lauber. I was the former Chief Learning Officer at McDonald’s, YUM! Brands before that, Cingular Wireless even before that. And I'm currently getting my own little business off the ground—I’m the CEO and Founder, I promoted myself, of a little entity called XLO Global, which is really an external Chief Learning Officers’ view into the enterprise.

Stacia Garr:
Can you start by giving us an overview of McDonald's as an employer, its size, mission and purpose?

Rob Lauber:
Yeah, so McDonald's is a 37,000 restaurant franchise organization; so it's 90-plus percent franchised. So we call it a system; it operates more like a network than, say , a large-scale entity that we all might be familiar with. And it's got probably 1.8 to 2 million employees around the world in 120 countries, serving about 70 million customers every day, plus or minus. They do a lot of transactions!

Stacia Garr:
Definitely! And you said that you were the CLO; can you talk a little bit more about your work there and how you would kind of generally describe the whole set of responsibilities?

Rob Lauber:
My overall responsibilities were for the learning and development, largely focused on the restaurant environment up through staff largely focused on the operational side of the business as well—so cutting across those countries and cutting across those large franchisees and the small franchisees that we have, and working through with them, learning and development strategies, and then working in the business to get the right infrastructure, the right content, the right business models, in place to really make sure we've got a really good way for enabling people to learn.

Stacia Garr:
And I know just from having spoken with some other former folks from McDonald’s that the franchise environment can kind of create a little bit of a different relationship with the employees of those franchisees, because they're not actually employees of McDonald's. Did that have an impact on the learning responsibilities for you as CLO in your organization?

Rob Lauber:
Yeah, it adds a couple of different dimensions. One, it makes analytics very hard because you're really across different entities, so you run into whose data is it's kind of conversations not unlike you would in a lot of countries, I guess these days with global privacy concerns and things like that. And also the relationship then was more with the franchise owner, and making sure you're really driving and enabling learning that the franchise owner sees as important to their business, because they can always opt out. One of the themes I talked about with my team a lot was thinking like a consumer model, almost—you have to have a relevant product, you have to understand your audience, know what it is that they're really after and deliver a high quality product, or essentially they're not going to buy it and use it.

Stacia Garr:
Right. So it's almost like building an economic model into the L&D function in some ways.

Rob Lauber:
Yeah, yeah, absolutely, the P& L side of it, right? But they're paying royalties and those types of things into the business to receive those kinds of services as well. So there is an expectation there.

Stacia Garr:
I'm heavily focused on data, so I want to make sure we come back around to that data point a little bit. But maybe if you can set the stage for us in terms of some of the unique problems you were trying to solve when you were a CLO, particularly given the nature of the organization?

Rob Lauber:
I would say the big things we were trying to solve were, I guess, today we would call digital transformation, right? Speaking of obsessions, since that's the topic of this all, that's another one at the moment, so a big part of what I was focused on was digital transformation of the way we enable learning at the restaurants: so how do we move from a paper-based, largely, approach across the United States and across the world to a more digital delivery platform that would enable the business to move faster, would make actual execution easier on the restaurant manager and on the employee?

And then I say the second thing was more honing in on how people really are learning at the restaurant level, which frankly is, is a shoulder-to-shoulder experience, someone showing you how to make French Fries and how do we deal with that? So really being plugged into how people learn and then trying to match your offerings into that flow of how people learn was, I'd say the biggest challenge that we faced.

Stacia Garr:
And maybe this is kind of a double click on that answer, but as you think about everything you were doing, what would you say were kind of the biggest challenges you were facing?

Rob Lauber:
The biggest challenge is always scale and reach. You have an organization where in the US, for example, you're going to hire a million people into that system every year, right? So 3000 people a day are coming onto your system, 3000 people are coming off your system. I'm just thinking about that. If you're in the talent acquisition world gives people heart palpitations, or you have to hand them a Xanax when you start talking about those things. But that creates a lot of reverberations in the organization around having really good, repeatable, easy to execute systems in place, particularly around how you help people learn, or you can't possibly keep up. And that's got a downstream impact, obviously, on the customer experience.

Chris Pirie:
So what were your core learning programs: was it about onboarding and franchise management and leadership? How would you characterize the ‘20’ in your ‘80:20’?

Rob Lauber:
I'd say the biggest focus was around enabling the frontline learner, the crew person. Because that was the biggest audience, obviously that we're dealing with around the world, and the least experienced audience that we were dealing with as well; they didn't know how to do the things that they needed to do. That's also the audience that you count on to really bring any changes as the organization moves to life, whether that's a new product, a new piece of equipment, right? That audience really has to know how to operate those pieces with a lot of proficiency with speed and , and capability. So, I put that in the 80 camp, but we ran the spectrum all the way up to helping franchise owners think about their business as they grew, what challenges and pitfalls they were running into and what pivots they needed to make from a mindset perspective in how they ran their business as well.

Stacia Garr:
Maybe just stepping back to you and your perspective around skills, what skills did you need to do your work and how did you acquire them?

Rob Lauber:
It's interesting. I think there are a couple of skills that were really important, I think, in the role. One is having a bit of business acumen, so understanding the mindset and perspective of the franchise owner, which is really a small business owner. And I was fortunate early in my career, I worked for Dun & Bradstreet, and I spent the first five years out of college putting together the business credit reports for small and medium-size and some large businesses that were pre-IPO. And you quickly got to understand the balance sheet; you quickly got to understand cash flow, supplier challenges, people, challenges, those types of things. I think that really helped me come into that role, because I could understand the small business challenge that many of them are facing in that piece.

So I think that one skill that was really important. I think another one was just really around the operational knowledge of L&D and the flexibility around design choices, infrastructure choices, content choices in the organization were really important as well. And then I think there were the obvious ones around, which probably is more a competency, I guess, but influencing and relationship building—and in a franchise system, figuring out who are the early adopters in the franchise system, who are the ones who may not be early adopters but if you get them on board, they help you drive momentum.

So, momentum. I looked at the success and in the things that we did around a momentum factor—how well was it being taken and where was it self-propelling/self-selling itself out across the system because the franchise community we'll be talking about it.

Chris Pirie:
Our topic here is skills for the season, and it means a lot of things to a lot of people. Rob, but what does skills mean to you in the context of your work as a CLO and McDonalds and before?How would you define skills?

Rob Lauber:
Yeah, I always thought of skills as like specific learned abilities, I guess, would be the word, the change, that you need to perform a job successfully versus competencies, which are more about knowledge and behaviors.

So I almost put them in a mindset tool set, kind of a framework. And we would talk about that a lot at McDonald's as well, as there are some things you would do that were really around building mindset and changing mindset or helping frame people's mindset. And then the other side of it was really around the toolset, which was how do you create, and enable people to build their ability to perform things they need to do to be successful in their role?

Chris Pirie:
One of the things we're learning is that the language and the taxonomic structures around these things are very fluid, and everybody's kind of found a way in their environment to talk about them in a way that's meaningful to their business. I wonder what were the kind of conversations that you had with business leaders at McDonald's around the topic of skills? Did they get it? Were they concerned, were they engaged?

Rob Lauber:
I think it depends on who you were talking to on that front. So I think in the broader context, when we think about the employee value proposition, and we would talk about reasons people would want to work at McDonald's, but we would definitely get into the broader skills conversation around; it's the first rung on a career ladder. And those were the places that people could enter into the workplace in general, beyond just McDonald’s, and gain a set of skills that are highly portable.

When you get down to talking to franchise owners and at a more tactical level in the business at the restaurant level, the conversation mostly was driven around performance, right? It was, ’I need to make sure all my people know ‘how to’ and fill in the blank or even, in a lot of cases, I need to make sure all my people understand why we do whatever it is that we're trying to do there.’ So context became important there as well, so the skills conversations typically showed up kinda in those dimensions most commonly.

Chris Pirie:
What about with the frontline workers themselves? Did you ever have an opportunity to talk to them about their approach to this?

Rob Lauber:
Yeah, I think the most common piece around that conversation or the orientation of that conversation or the direction it would head would be, where does this job lead me? Where can this take me? And the conversation around skills typically would come out of that, right? Like my ability to make French Fries is great if I'm going to go do the same job somewhere else in another business, but that's not really going to advance me, which we all seek and strive for every day; I don't think that's different for any of us.

And so the conversation around the portability, for example, of skills and how teamwork communications, dealing with conflict, working in a time intense environment, understanding how to get to work on time, some basic things too are all skills that we talk to people about how McDonald's sets you up for greater success when you move on to whatever it is you want to pursue.

Chris Pirie:
You are pretty connected in the industry; I know you see the world through a much broader lens than just your work at McDonald's, but why do you think skills are such a hot topic for people right now?

Rob Lauber:
I'm not really sure how it's emerged to be the words that everyone's used. I haven't really thought about it linearly. I keep going back to—and Chris, you'll relate because you and I were around at the same time—but in 2003, I was on an ATD (ASTD at the time) public policy group, and we published a skills gap white paper in 2003. And 17 years later, skills are the word that we're talking about today. So for me, I kinda think it's been front of mind for me for a long time. So I haven't paid a lot of attention to it, and I agree with you, why the surge in the narrative—and to Stacia’s point, the obsession is emerging.

I think part of it is around an evolution towards thinking differently about how we acquire talent in organizations. I think that's one piece, and lots of root causes about why we would think differently about that. I also think it's emerging because it helps bridge the gap between educational institutions and businesses; I think it puts it in simpler terms for people to really understand, ‘Here’s what we're looking for from a skills perspective in the business world,’ when I'm talking to a university president and they're talking about their academic rigor or the programs that they have.

Chris Pirie:
Got it, yeah. We had an interview just the other day where somebody was talking about, you mentioned it too, the technology and our obsession with digital transformation; Josh Bersin talks about an accelerated skills half-life, and there's just so much coming. I think a lot of leaders are anxious about where they're going to get the talent to create value from data and all the things that data is, the new oil, all the things that their software companies are telling you, you better worry about it's like people from the do that. That might be some of it too?

Rob Lauber:
Ironically, the ones telling you that the ones that are pitching products to solve that problem. It's a little suspect that way too.

Chris Pirie:
Good point, absolutely well taken!

Stacia Garr:
I wonder too, though, if some of this is, ‘cause we've heard throughout this podcast that skills are intensely or primarily individual—so we've heard like in several iterations, that competencies are owned by the organization, but skills are owned by the individual.

And I wonder if part of this is part of the push to have individuals own their careers even more? And so if you're talking about skills, that's in a language of something that employees can feel like they own, feel like they can acquire or confined sources from which to acquire those skills. And so I wonder if the broader shift that we've seen around putting onus for the learning of them is also a parallel reason why we're seeing the rise in skills.

Rob Lauber:
Yeah, I think too, I think about it too. Is it a more translatable way to talk to people about how to get from point A to point B versus a competency, a 14-point competency compendium that you have in your organization—one of which ironically is resilience—and nobody really knows what that is other than to put up with this pandemic for another month?

Chris Pirie:
Or documents that tell you which competencies you need!

Rob Lauber:
Exactly. It's funny though, because in the skills obsession we are talking about, on the side there's conversations about agility and resilience, and those are competencies that are not skills. So it is kind of funny to watch the parallel conversation and I think it's, it's somewhat unconscious in terms of, and not, I would say an equally valuable conversation is the way I would put it. But I think that it's really interesting to watch that play out.

But I do think it, it just makes it simpler for people to digest one, and two, I do think that, when you think about skills gaps out there and this need for a billion data scientists on the planet, so we can all just analyze data for the rest of our lives and then spit out amazing insights with no one to do anything about it. But the needs at that level are very skill-driven; there’s a methodical way to build those skills.

Stacia Garr:
I think that's a clear articulation of what I was trying to say, which is that it's understandable and an individual can do something about it. So I love that perspective.

Let's shift over, because you did just now mention analytics and data, so that's kind of go after that a little bit more directly. A big theme in the skills discussion is skill supply and demand, with some skills being too short to supply and others in to greatest supply. How have you been thinking about this problem, and how do you think we should be thinking about that more holistically?

Rob Lauber:
I mean, I've seen and read a lot about the skills shortage typically on the tech side seems to be the loudest piece of it, although interestingly, it seems to have shifted away from things like coding because that actually seems to be commoditized now in the workplace, where six years ago I was on a workforce board and that's all we were talking about was building people with coding skills, helping people get coding skills. So it is interesting to watch the shift there.

So I do think that there's a little bit of that going on. I think the challenge around supply and demand is predicting the future, right? And so there's the technical, the technical piece of it as well is predicting the future. So there's anticipation around data skills, or cybersecurity skills, or those types of pieces, assuming that it's only gonna get more complex, more difficult, we're going to need more people for it, these are areas that are going to grow.

And then there’s the big question: what are the skills areas that are actually on the decline or less needed than before? I haven't seen much written from that angle—the contrarian angle that says, actually these are the skills we don't really need much of anymore. And then I do hear on a parallel side, the hard-soft skills conversation, when you think about those pieces while we're , I'd call the, the tech skills, hard skills for obvious reasons… but you hear every once in a while, the murmuring about ‘My teenage kids have no soft skills, like they don't know how to talk to somebody; if they have to make a phone call to their soccer coach, they don't know how to actually talk to them; they want to just text them.’ Right?

So I do think some of those softer skills also will emerge as a supply demand kind of equation at some point as well.

Stacia Garr:
I feel like we're hearing a fair amount of that in this whole discussion of both automation and AI and this question of what makes us human—what makes us stand out from what the robots can do. And in that discussion, whether you call it soft skills, or one of our guests called them ‘durable' skills, which we thought was interesting because they endure past a specific time, they're kind of throughout your whole career—but I think we may hear about it more in that context as well.

Rob Lauber:
Yeah, I do; I agree that we're approaching or in the middle of a pivot moment. But unfortunately, I can age myself and remember when a desktop computer landed on my desk; Chris probably read about that research, ‘cause he's much younger than me, but when when a desktop computer first landed on my desk and there were 40 clerks across the room that used to do all the data entry and now it was me and my colleagues, so you were self-servicing that end, all those people found other things to do. And I do think we're at kind of one of those moments again, where the same thing when the internet became a reality, a whole set of other skills were displaced, and people evolved and moved towards.

I think this pivot is very much similar to that new jobs are being created because a new industry or a new way of working or a new way of operating a new operating model is emerging again, so I see that as it's not a new problem, right? That's why I go back to my 2003 example: dot com bust, skills, shortage of those kinds of things. And I go to 2020 and I sit there and say, Hmm, skill shortage. Even in the pandemic, I think there's like 17 million posted jobs out there in the United States, so in theory all of those should be a hundred percent filled.

It's very interesting to me to sit there and watch the skill supply conversation go on. And it just feels very elusive. It's hard to sit there and I'd be surprised if anyone could proclaim. They have the formula and the science behind with certainty, these skills are going to generate these many jobs. And these skills are going to lose these many jobs.

I think about AI. And I know at McDonald's we were talking about AI at the drive-thru, the application, I actually wrote an article about this, the age of automation and how it's getting impacted our restaurants. And the conversation was more about, is it going to free up people? Sure. But it enables the restaurants to then do things they couldn't possibly do before—like the whole idea of table service, where you come in and place your order counter, and then go sit down and someone actually brings it to you; in the economic model without automation, that was a very difficult thing to do because you couldn't ask your restaurant and be profitable with a low cost product and still provide some level of table service or curbside service or delivery or those kinds of things. So the automation piece actually creates new opportunities for businesses, which in turn creates new opportunities for people.

Chris Pirie:
That's a really interesting idea, because I think there the skills gap between those two activities is pretty narrow—you can imagine taking someone from behind the deep fat fryer and skilling them up to perhaps be capable, more capable in front of a customer. Many of the examples that we see talked about and anxiety springing up around are where those retail jobs go away. And your only option is to become a software engineer for Amazon. And that feels like a vast chasm to get people through in terms of transforming.

Rob Lauber:
Frank Kevin Oaks reminded me of 1981 news article about how ATMs were the death of the teller—and then you go to like 2011 BLS statistics 20 years later, and there's actually more tellers working in banks than there were in 1981 yet ATMs are the understood way of doing business, right—the understood way of personal banking.

So it is very interesting to see, but the role of the teller to even transform into something completely different; they do different services, they provide a higher level of customer service than they did before. I think that's the kind of opportunity at the retail level, the consumer-facing level that is in front of a lot of businesses.

Stacia Garr:
And I think it ties in nicely, Chris, to what we heard another guest talking about, which is this idea of kind of thinking about the skills pipeline and where people move; so you can see the person who was previously making the fries, moving to this customer service or guest service role, and then somebody who may have been doing something else—it was a little bit more skilled being able to move up to something else because they’ve been freed to do that. So it's kind of this value chain that can get released if you're able to automate some of the lower level skills.

Rob Lauber:
I agree, and I think that in the bigger picture of things, we should be thinking about the labor market, that way more in general, right? So should the minimum wage be $7, $15, or $50 is an irrelevant conversation, because history says it doesn't really do anything to impact poverty over the long term anyway. But what does the economic opportunity of acquiring skills do? So how do you create and how do you think of, and how do you position, I don't know, the retail sector as the entry point for skill building for anyone in the workforce… and what does that get you? And then how do you move to another level? What does that get you? How does advancing your education, whether that's completing High School, completing college, getting an advanced degree, how does that position you further up a chain that creates new opportunities for you to move in a direction along the skills pipeline?

Chris Pirie:
One mechanism that we've used in the past around skills to do some of that actually is skills validation and credentialing. At Microsoft, for example, we knew we needed a million database administrators on the planet in order to make sure our technology could work, and so we built a certification program and we created a value around that job role, and injected those skills into the population. What was your philosophy around credentialing? How did it play into life at McDonald’s?

Rob Lauber:
We were a little looser on that in the context, I think. I think back to MCSC, for example; I think that's a great one—the national association of manufacturers’ ‘stackable credentials’ is another good example. But largely the credentialing idea hasn't taken off very far or gone as far as it probably needs to in the world.

At McDonald's, our approach was really more around knocking down barriers to advance your education through the traditional education systems that we have in place. So we had large populations that dropped out of High School, for whatever reasons; suddenly they became the breadwinner in their family, and they had to drop out of high school, or out of necessity they had to get a job and here they are, and they're there, so we focused very much on being able to open doors for people to access education and advance their education.

And that was really the intent behind the Archways Program, which was a gateway basically program that you can come in, work at McDonald's, advance your education and then pursue whatever avenue that you wanted to. So, interestingly, 40%—I think we surveyed like 40,000 crew people a couple of years ago—40% of them wanted to move into healthcare. So that kind of data is very interesting. And there's certainly no shortage of need for people in the healthcare profession, in all ranges, so we introduced programs to people that let them know what are the professions in healthcare that are available, here’s the educational tracks, if you want to be a CNA, or if you want to go all the way to nursing, or you want to be a med tech or whatever, physical therapist, here's basically what your education path looks like. And you can work for McDonald's for as long as it takes for you to get there, and we'll help make access easier; we’ll certainly make it more affordable to you, and give you that path to be able to pursue it in a way that you probably might not have thought of otherwise or had access to other.

Chris Pirie:
That's really, really interesting, and I want to get to this. Can you describe how that program works a little bit?

Rob Lauber:
Yep. So, yeah, so I’ll walk through the pillars of the program: first, we had an English language program, where people, typically Spanish in the US with Spanish as their first language, would learn English as a second language. That was an 8 or 12-week program you could go into, typically face-to-face locally delivered by a certified ESL person; McDonald’s fully paid for that.

The second piece was a career online high school program where you would get a diploma, not a GED. And you could typically in—depending on when you departed or stopped High School—you typically finish in 12 to 18 months. I think our average was like 14 months, and you could get a high school diploma. We then moved into the traditional college path, and McDonald's would fully pay for the high school piece, and that was about $1,300 in value there. And then in the college piece if you work 15 hours a week, you had been in the job for 90 days, you were eligible for $2,500 a year towards a degree program, and you could go to whatever school you wanted to. So if you wanted to go to your local community college, which by far and away numbers-wise was the most popular choice, you could do that and you could pursue whatever degree you wanted to. We weren't specific about like, it has to be supply chain, or tech, or something like that. And that was $2,500 a year.

And we had some preferred suppliers like Southern New Hampshire or Colorado Tech or some others out there, where they would work the other end of the equation to make that $2,500 stretch the farthest it possibly could. So your work experience would count towards some credits and your training experiences inside McDonald's would count toward some credit. And the affordability piece when you got through Cal grants and frankly grants from those schools with Colorado Tech, for example, you could go for free pretty much not out of pocket to attend school—all you had to do is put in the time and continue to work for McDonald's 15 hours a week.

Chris Pirie:
And was this available to people who were working in the franchise system?

Rob Lauber:
Yep, yeah. Over three years we had about 50,000 people participate in the program and a lot of repeat visitors as well, channeling down that path. And we would celebrate a lot of the success that they would have. So at Colorado Tech, I think two years ago, I went out to Denver and there were 170 people that were graduating out of the McDonald's system at Colorado Tech, and they would walk the stage they'd bring their families. And it was a huge occasion; many of them were the first person in their family to graduate from college, and many of them were pursuing other careers and other things, and it was great and they were grateful. And for McDonald's, the idea was they would stay longer, which they would. We knew that. And ultimately they'll turn into great consumers because there'll be fans of the brand probably for a pretty long time. And given what we were able to help them do, there’s a real win-win on that, on that side. And that's how we thought about it.

Chris Pirie:
Is there a lot of upward career mobility in McDonald's as well?

Rob Lauber:
Yeah, absolutely. But when you look at the realities of the upward mobility piece given a highly franchised one, many of those franchises are family owned businesses. Your upward mobility could be limited; it depends on the franchise, but there are opportunities into the McDonald's corporation. So there were people that I knew that came through from franchisees into McDonald's corporate and entry-level kind of jobs and were making their way up the chain. And several of them said, I want to be a franchisee someday as well; this is setting their pathway to get there.

Stacia Garr
Did you measure the success of the program? Was it the increased retention rate? Was it the number of graduates or percentage of graduates?

Rob Lauber:
We looked at it, selfishly, on the business side. So first, what are we getting for what we're spending? So we looked at things like average tenure, likelihood to be promoted, revenue at the store level where you had two or more participants in the program compared to stores that didn't have participants. Those are three measures for example. And we did a study with Accenture, and essentially it showed a three to one return; for every dollar we in the program, McDonald's directly benefited with a $3 return. So it's pretty easy to justify the program on the business side. And a lot of all the confidence intervals and big data stuff you would want to see and that, people would want to know to believe that it was really true.

We also looked at the qualitative measures, so we talked to our top 10 franchisees with participants in it and said, ‘How is this helping you in the community, because so many of them are community-based; how is this helping your reputation? What kind of doors is it opening? What are you seeing in the quality of candidates?’ All very subjective and qualitative, but we also included 10 profiles of franchisees and the benefits they were seeing. A simple example would be like they were able to talk to their local legislators in a way where before they might not have gotten the time of day, because of the wage conversation or whatever it might be, or perceptions about McDonald's as an employer. So this opened doors for them to build better relationships in the community as well, which of course has an intangible long-term benefit.

Stacia Garr:
And then kind of one other question on this is, how did it work financially? So I know you mentioned kind of the return measures, but did the franchisees have to pay any amount if their people were participating in this program, or was that kind of all part of their royalties they would pay otherwise?

Rob Lauber:
Yeah, at the time it was fully funded, and it has been up to this point fully funded, by McDonald's corporation. There is a discussion about a shift, where it's a shared model underway, and we'll see what the outcome is on that. But up to this point, the first five years, from 2015 through 2020, McDonald's corporation underwrote it—largely because we believe from an employer reputation perspective, and also from a business perspective, we needed to do that to get the program momentum and proof points in place.

Stacia Garr:
Fascinating. I want to turn—I kind of foreshadowed this in your introduction—but I want to turn a little bit more to that conversation about data, and how you all were thinking about that. So what challenges did you have in obtaining or identifying skills data, and then actually using it to understand what was happening with skills in the organization?

Rob Lauber:
The challenges we would face were mainly around getting granular; comparing store to store, for example, was very challenging. Typically, we would be able to compare at, what I would say in the US was what we call a co-op level, which was about 55 of those around the United States. And they were basically clusters of operators, maybe 20 or so franchisees, and all of their data would be up and grouped in an anonymous kind of way, where you wouldn't be able to figure out who's who. So we were able to gather that data that way.

Stacia Garr:
Too much noise around this, and not a lot of conversation about what people are actually doing and how they're actually thinking about it. And so we're trying to elevate these stories of how, exactly that—how people are thinking about it. We'll go here next, but also this intersection between learning and, and people analytics; so the data, and because a lot of times it seems like those are two parallel paths in the organization that are never meeting. And so we're also trying to kind of encourage that because we think that the problem needs to be solved.

We don't know the exact answer, but we think those two groups need to work together to solve it.

Rob Lauber:
Yeah. My two-cent opinion is the people functions, HR functions, whatever you want to call them and organizations need to operate like marketing organizations. And in marketing, that's figured out because data and insight drives action. Right?

I don't think that most HR organizations in the country think about it that way or globally even think about it that way: probably a few, I'm sure. But I do think that there are far too many parallels and not enough action.

Stacia Garr:
So how should learning be working with people analytics and thinking about this data and kind of the relationship between the two organizations to really understand both what skills are in the organization today, and how we should be thinking about developing skills?

Rob Lauber:
I think from my inventory perspective—and my experience comes from a large enterprise perspective—and I think McDonald's aside, I know my peers in larger enterprises are dealing with this, too. There isn't really a way to capture the inventory, right? The conversation around needs is always pretty apparent, but the conversation around what do we have in our organization and what can we draw upon an organization, where are we in our organization, isn’t necessarily as evident as I think many folks in L&D or in that probably the people organizations, HR organizations want it to be.

So I can think about an example; I was talking with a colleague of mine a couple of weeks ago at a large consumer distribution company. And they were talking about a driver who has an engineering degree applied for a job with their engineering organization. And they had no idea this person was out there driving, and had that kind of skill set. And at first, honestly, and I, and I'd say this comment in a lot of organizations, there was something dismissive about, Oh, well, they're a driver, right? So really, why would I consider them, we should go external for this?

But I do think that the other side of it was this aha, like, well, how many other engineers do we have out there that drive, they could be doing this other engineering work for us, which can drive value. I think that's a simple example, but that conversation came up once or twice while I was at McDonald's too. Are there IT professionals sitting out there, or people capable of taking at least entry-level jobs in our organization that are in our restaurant communities? And we're just not even aware of where they are.

So I do think that skills profile skills inventory piece is a nut that I think is worth cracking that I think a lot of us are trying to get to. And I think having that then becomes your data analytics driver, right? Because if what you have and where you're trying to go, L&D steps in and tries to fill the gap right, as does talent acquisition, I would say, right? Am I going to buy my talent or am I going to build my talent?

And I think that's really where the L&D role plays in it. I think the analytics team in L&D teams, the analytics piece of it has to be central to beyond just L&D. I think of it in the holistic person profile of who's working in our organization, what’s the flow look like of the people that are coming into our organization; how do we compare against others that are trying to hire the same people we are?

I would lean on that insights organization and analytics or analytics organization, really, to give me the insights about what we see and what we don't know that's right in front of us. Similar to, and I mentioned this earlier, similar to a marketing organization; marketing's typically led by insights; they take the data, they drive insights, and then that drives the product. I think the HR/L&D organizations need to get much more disciplined and probably operate more in a parallel to the way of marketing organizations.

Stacia Garr:
And what do you think the role is of the CLO in driving that? Because we don't often hear, at least on the people analytics side, as the CLO is being a primary customer, if you will, of the analytics function, but it sounds like there's an actually an opportunity here for the CLO to, to be pushing for that service, if you will, from the analytics group?

Rob Lauber:
Yeah, absolutely, I think that the CLO has an important role to play there in terms of almost demanding—demanding is too strong a word—but I mean, the expectation that people analytics team is going to be providing the insights that help set the agenda and the strategy for what L&D needs to pursue.

So I do think that that's an important piece that needs to be there. And if it's not in place, I would suggest to my colleagues, they should try to figure that one out and make sure that it is in place.

Stacia Garr:
Definitely. Are there any other groups just around this out, any other groups that you think learning should be collaborating with specifically with regard to skills that we haven't talked about?

Rob Lauber:
It's interesting, because one of the things I looked a lot at and tried to work a lot with was, we did work around the customer experience and what customers expected out of their McDonald's transaction, for example. So we went over and we looked at customer insights and consumer insights, and what were customers saying about their experience with the brand, and that identified a set of skills that we knew we needed to focus on in the organization around hospitality.

For example, to the example I gave earlier, where automation freed up people to now go interact and engage directly with customers: well when they do engage with customers, what is it that they expect and how do I make sure that those people have those skills and abilities to be able to do that?

The other side is to look to your marketing organization, because that's some of where the outcomes are or the insights that they find about the experience that your organization is providing, is obviously driven by your people. And that's the flip side of the skill development that you're trying to do.

Stacia Garr:
Yeah, a lot of what I'm seeing on the people analytics side is the bringing together of customer experience, data, and employee experience data for that exact reason. And so you can clearly see when there's that gap, connecting that back to the L&D group to try and fill that gap, or alternatively to talent acquisition, if that skill set isn't available, or can't be developed quickly enough.

Rob Lauber:
That’s right.

Chris Pirie:
What I love about that is that that's business data, right—that’s business outcome data, and when your learning strategy is driven by that, then what the problem is you're trying to fix, and guess what, whether you're having an impact or not, because you can look back at that data rather than examine your own products and the own experience and something within the sphere of L&D.

Rob Lauber:
I mean, it could be as simple as you go look at customer complaints and you can identify all the skill opportunities there around products not created correctly, regardless of industry—customer service experiences, not being what you would want them to be those kinds of things. I mean, there's a huge amount of rich data there that L&D professionals can really draw upon to set a priority, and frankly go after and which on the business side are very meaningful in terms of their impact.

Stacia Garr:
Yeah, very measurable, which I think is important because if you could reduce the percentage of complaints around a certain thing, there's your direct business impact of your work.

Rob Lauber:
And a whole bunch of people outside your function can tell you how much that's worth.

Stacia Garr:
Yes!

Rob Lauber:
And keep your job simple!

Chris Pirie:
I'm sure there are a lot of startups out there that are starting to apply AI and trawling through that business data to generate the skills that need to be worked on anyway; we’re seeing a lot of cool startups using data around skills to create value for a number of different people. Are there organizations or vendors that you worked with out there that you admire in terms of what they're doing around skills and creating value from understanding skills in a better way?

Rob Lauber:
I'm going to now tick off all the vendors that I work with; thanks for that! But it's actually been an interesting question because I don't know that I really ever thought of them that way, in terms of, particularly with the McDonald's scale and the challenges of having access to data. It typically wasn't framed up in that context with that, so it wouldn't be fair to me to sit there and say, I like this organization over this organization.

I do know some of the suppliers that I worked with there that I still talk to today are on the fringe of being able to skills map any training content that you have, for example in your system using AI and be able to present to a learner, e.g. if you take this course, here's three or four different skills that you're going to be able to take away out of there.

So to your point, I think that not only the startup community, but I also think that even the existing community that's out there, are catching onto this as an opportunity. And I think it's good thinking about it that way, it’s really good. And I think three or four years from now, we'll either be onto something, or we'll all agree it's not really possible to tackle.

Chris Pirie:
Yeah. I think that's exactly where we are in this, in this whole conversation. Rob, is there anything else we should've asked you about?

Rob Lauber:
No, not really. Not that I can think of off the top of my head. I mean, this has been a great conversation overall, and there's probably could go on for a couple more hours because there's so many cogs on the wheel that we didn't get to that could in this whole area.

Chris Pirie:
Well, maybe you could just tell us something a little bit about what you're going to do next and what, what your plans are, and then also, how can people connect with you to learn more?

Rob Lauber:
Well, I started this little venture called XLO Global, so xloglobal.com is my plug; it's a really complex website of one page, but specifically by design, because I'm really focused on doing three things.

One is advisory services, so I'm working with some startups and that part is pretty public, you can find out about that on the website as well. I'm also then working with some organizations on some short-term projects, around learning strategies, within a particular problem that they're trying to solve.

And then the third piece of work I'm doing is working with a couple of organizations right now on revamping their business model, their infrastructure and their content or approach to learning as a whole, as they're trying to pivot their business for growth as the pandemic comes out. So they're actually leveraging this moment, where growth is a bit of a challenge to get themselves ready, to be able to really accelerate quickly as an organization when they come out. So I'm doing those three pieces of work right now, and that's mostly my focus.

Chris Pirie:
Sounds like you're going to have a lot of fun.

Rob Lauber:
That's all I'm after at this point. It's really good!

Stacia Garr:
Well, that actually ties nicely into what I think is our final question. We've done a bunch of research on purpose. And so we'd like to end these conversations with questions about your purpose, and really why do you do the work that you do?

Rob Lauber:
Yeah, again, probably a five-hour conversation and some psychoanalysis. But I distill it down into one thing. I get huge amounts of satisfaction out of helping other people be successful. And I can't explain it, but I think maybe I'm not unique to all of us on this call either about that, but for me, it's incredibly satisfying to help and to see someone succeed or gain a new insight or from something I might be able to unlock for them.

I've made that my pursuit. I truly believe that's why I'm here. It's I know that gives me the most energy, and so that's probably the simplest way to explain,

Stacia Garr:
Well, thank you for doing it for us and for our listeners today; I think you've helped us all understand something new and given us insights. So thank you very much.

Chris Pirie:
Yes thanks, Rob, great conversation. And I would also say that you have given a lot back to the industry as well through your work with ATD; you’re a very well networked person, and I'm sure you're coaching a lot of learning leaders who are lucky to have you.

Rob Lauber:
Yeah, I just gotta figure out how I monetize that, but I'm not too worried. You're probably doing a lot better at that than me, but I'm happy. I love doing that stuff just in terms of like, Hey, can you give me your advice? And the psychoanalysis part of this stage just for fun is like, I've had people come to me that I know, but don't really know, and they're like, can I sit down and have a career conversation with you because—and they're not an L&D at all, they're like, one of them was like a CFO—and it was like, I don't really know what I'm doing and I don't, tell me what you think, or here's the situation I'm in, what should I do kind of stuff. And it's always been fascinating for me and I haven't been able to unlock why people do that, but it is. I get a lot of career counseling questions from people as well.

Stacia Garr:
Because you listen carefully, and you ask thoughtful questions.

Rob Lauber:
I think my wanting people to be successful and helping them solve their problem comes through in that and the way I approach everything. So it's give, give, give. And I get back a lot of satisfaction and obviously from a career perspective that hasn't really hurt me because when I go into the organizations that I've been in and I'm like, let's be successful. Right? And how do I make sure we all win?

And I think that's helped me get to where I am.

Chris Pirie:
We are very grateful to Workday for their exclusive sponsorship of this first season of the RedThread Research podcast. Today, the world is changing faster than ever, and you can meet those changing needs with Workday; it’s one agile system that enables you to grow and re-skill your workforce. Workday is a financial, HR and planning system for a changing world.

Workday will also host an exclusive live webinar towards the end of the season where you can meet the team Dani, Stacia and myself, and join in a conversation about the future of skills and skills management. You can find out more information and access exclusive content at www.workday.com/skills.

Written by

Stacia Garr Redthread Research
Stacia Garr
Co-Founder & Principal Analyst

Stacia is a Co-founder and Principal Analyst for RedThread Research and focuses on employee engagement/experience, leadership, DE&I, people analytics, and HR technology. A frequent speaker and writer, her work has been featured in Fortune, Forbes, The New York Times, and The Wall Street Journal as well as in numerous HR trade publications. She has been listed as a Top 100 influencer in HR Technology and in D&I. Stacia has an MBA from the University of California, Berkeley, and a master’s degree from the London School of Economics.

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