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Mike Kelly and Tim Schultz
© 2018 Paradigm Group
Performance Erosion
Hidden ROI Killer

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© 2018 Paradigm Group. All rights reserved. Page 1
Performance Erosion—Hidden ROI Killer
Businesses monitor all sorts of contributors to economic health. Financial teams watch income streams
like hawks and hold expenses under a microscope. Sales managers closely follow progress against
stated revenue targets. Yet, we typically fail to calculate the negative financial impact that inefficient and
ineffective performance is having on the bottom line. What follows should encourage you to pay more
attention to the problem and solve it.
At the core of this problem is ‘performance erosion’—the rapid decline of skills and knowledge that
follows most learning experiences.
Each day, employees use a variety of tools to get their work done—tools such as Word, Excel,
and PowerPoint. Many use sophisticated databases and activity tracking software. And in every
organization, there are systems for accounting, inventory, shipping, etc. Despite initial training on their
use, the sad truth is that whatever employees gain quickly falls off. For the most part, they end up using
only a small percentage of capabilities available to them. The result is inefficiency that costs companies
a lot of money.
It’s astounding that this type of decline occurs so readily without attracting much attention. However,
there are several explanations.
Failure to Provide Ongoing Support
The primary reason for performance
erosion is failure to provide ongoing
support for learning. Companies that
invest in technology usually offer some
sort of training right away. However,
they don’t reinforce that learning. More
importantly they don’t put systems in
place to track competence. So, people
fall prey to something German scientist
Hermann Ebbinghaus termed ‘the
Forgetting Curve’. In general, people that
have just engaged in learning will forget
about 50% of information they’ve learned within 20 minutes. They forget roughly 75% after one week.
That loss reaches 90% after a month! The only way to fight this natural tendency is to provide ongoing
reinforcement for learning.

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© 2018 Paradigm Group. All rights reserved. Page 2
Oral Tradition
Another reason for performance erosion stems from flaws in the education process that compound over
time. See if you recognize this ‘oral tradition’ approach to teaching and learning.
Initial training is usually delivered by the vendor’s subject matter experts right after
products and systems are installed. The quality of this experience for first-generation
learners varies. We often witness experts who forget to tailor training appropriately for
new users, so retention rates are typically low. And because there’s very little testing to
see if anyone actually learned anything, it’s difficult to gauge what people really take out of
initial training. Experience shows that it’s not much. For the most part, organizations seem
to accept that learners are competent simply because they attended a training session.
Regardless of what’s been achieved by first-generation learners, skills and knowledge
begin to decline rapidly unless ongoing support is offered.
Enter second-generation learners—employees hired after the initial installation and
training. By this time, subject matter experts are either gone or less involved. New hires
tend to learn from first-generation of learners. Of course, they’re learning from victims
of the Forgetting Curve, receiving only a small percentage of understanding about
capabilities intended to save time and money. And since this second-generation group is
also susceptible to the Forgetting Curve, the organization’s effectiveness and efficiency
erode still further.
Now think about third-generation hires. Guess who trains them? That’s right.
Second-generation learners now pass on limited understanding to new hires.
You can see how, as time passes, organizations that rely on the oral tradition retain very little of the
value products and systems have to offer. Performance levels are a fraction of what they should be and
employees waste considerable time and money creating personal workarounds.
1st
Generation
Knowledge & Skills
2nd
Generation
Knowledge & Skills
3rd
Generation
Knowledge & Skills
Oral Tradition and Performance Erosion
1st
Generation
2nd
Generation
3rd
Generation

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© 2018 Paradigm Group. All rights reserved. Page 3
In general, people
that have just
engaged in learning
will forget about
50% of information
they’ve learned
within 20 minutes.
They forget roughly
75% after one week.
That loss reaches
90% after a month!
The only way to fight
this natural tendency
is to provide ongoing
refinforcement for
learning.
Create a Plan
Corporations spend significant funds on the tools used to manage daily
workflows. To maximize the return on that investment, it’s critically
important to plan and execute ongoing performance maintenance. A
good plan will include training and a schedule of refreshers that are
tailored to a variety of skill and knowledge levels. The plan will also
include competence tests of various kinds. Otherwise, the organization
won’t be able to properly identify competence levels or design training
to advance those levels.
The time to plan for performance maintenance is when you’re making
purchase decisions. When evaluating software and systems, be sure to
discuss ongoing training with the vendor to understand what support
you should or shouldn’t expect to receive (and what you will pay).
If you already have systems in place, you must come up with a way
to evaluate present competence and plan methods of education and
assessment.
Here’s some of what you should talk about internally and with
providers:
• Find out if there’s a certification process for the system and if
multiple levels of competence are addressed through continued
education and testing.
• Identify internal and external resources required for various levels
of education.
• Determine costs for remote and in-person training. Depending on
the system, remote training can be a very efficient option.
* Is no-cost training available for new users/new hires?
• Budget for performance maintenance in the next cycle.
* Determine if it can be considered a capital expenditure. If so
you may be able to fund training this year. Sooner is always
better.
* Remember, if there’s a major efficiency feature that’s not being
used and your team is able to address that through training,
you might recoup your investment very quickly.

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© 2018 Paradigm Group. All rights reserved. Page 4
Next Steps
If this message struck a nerve, start by making a commitment to change. There’s no cost to that.
For most organizations, taking this approach to performance maintenance will be quite new. You should
expect a learning curve. To drive through that initial challenge and promote ongoing effectiveness, you’ll
need a stakeholder and advocate. She or he will need C-level support to ensure that appropriate time
and resources are allocated to planning and execution.
Additionally, as you develop and execute your plan for maintaining top-level performance, you may
want assistance from an experienced partner who can help organize the planning process and ensure
that ongoing education leads to long-term accountability and success. This keeps the process from
overwhelming and shortens the time it will take to see measurable improvements.
Whatever resources you invest will produce significant benefits. Added efficiency will yield increased
profits. You should also see increased employee retention, since it’s proven that better trained staffs are
more engaged in their company’s success and less likely to leave. Additionally, you should experience
increased customer loyalty, as better trained staffs provide superior customer experiences.
There’s no time like the present. Lay to rest the hidden ROI killer once and for all.
Mike Kelly has 30+ years of media experience, working for a number of groups. He’s worked in
virtually every TV station sales capacity from AE to NSM, GSM, GM and VP of Sales.
As VP of Sales for the former Lin Media stations, Mike deployed ‘Accelerate’, a proprietary sales
training program that laid the groundwork for Lin Media’s strong market shares and a high
percentage of direct & new direct business. As VP TV Sales for WideOrbit, Mike spent the last
three years leveraging software solutions to maximize revenue and operational efficiency for local
broadcast groups.
Tim Schultz draws on 35+ years of teaching and coaching to create online and onsite programs
that help clients reach or exceed stated objectives. For over 15 years, Tim has led Paradigm
Group’s research efforts, working with client subject matter experts to identify critical business
needs and ensure all education is relevant and engaging.
Paradigm Group works with companies across a variety of industries to improve top line revenue,
identify process enhancements and find operational efficiencies. Let us know if we can help you
do the same.