CASE – 1 Toyota Motor Company’s Toyota Technical Training Institute in India
In August 2007, one of the world’s leading automobile manufacturers, Toyota Motor Corporation (TMC), announced that its joint venture in India, Toyota Kirloskar Motor Private Limited (TKM) had set up a technical school called Toyota Technical Training Institute (TTTI), on the outskirts of Bangalore, India. The company said that TTTI was meant for those who had passed out of middle school (Class 10) but could not continue their education due to financial or other constraints. TMC projected the setting up of this institute as a corporate social responsibility initiative that was aimed at benefiting a disadvantaged section of Indian society by increasing their employability. At the institute’s opening ceremony held on August 1, 2007, TMC’s Executive Vice President, Mitsuo Kinoshita, said, “I am confident that the establishment of TTTI will contribute to the betterment of Indian society by cultivating the power of the nation’s youth.”
The seeds of this institution were reportedly sown in the year 2005, when Atsushi Toyoshima (Toyoshima), Managing Director, TKM, visited a number of technical institutes in India. He felt that the curriculum in these institutions was outdated and not in sync with the requirements of the industry. Analyst noted that despite the 4,500-odd technical institutes in the country, the kind of products they were churning out were not of much use to the manufacturing companies. For a company like Toyota, which had aggressive growth plans in the rapidly growing Indian automobile market, this was a major hindrance as the company had little talent to choose from. This prompted Toyoshima to ask the management at Japan to set up a technical institute in India on the lines of Toyota Technical Skills Academy (TTSA).
The company’s decision to start the TTTI in India was first announced in March 2007. “In addition to making automobiles, we believe in proactively contributing to society by consolidating the knowledge and know-how within Toyota to develop capable human resources and thus contribute to the development of a prosperous society,” said Toyoshima. The company placed advertisements for a three-year technical skills program in the local newspapers and started accepting applications from the next month for the selection of the first batch of 60 students. The institute would provide the courses, boarding, and lodging free-of-cost, and also pay each trainee a stipend in the range of Rs. 1,800-2,200 per month. Promising trainees would also be provided with fellowships (US$180 AND US$230) and a chance to join the company after successfully completing the course. Around 5,000 applicants applied for the program. Subsequently in June 2007, an admission test was held and 64 trainees were selected for the first batch.
The TTTI was established at a cost of Rs. 220 million (US$5.6 million). The institute was spread across a 48,726 square meter area within the premises of the TKM facility at Bidadi, Bangalore. It initially started its operations with a total staff strength of 25, including 17 teaching staff, headed by V Ramamurthy and T Somanath (Somanath) as Dean and Principal respectively. Through the three-year residential program, the company sought to provide the trainees with the skills of Monozukuri. The institute offered four practical-oriented courses in painting, welding, automobile assembly, and mechatronics. The courseware was similar to that of TTSA, but was adapted keeping the Indian market in mind. The students were also provided lessons in subjects such as English, and History, self-improvement courses such as Yoga and Home Science, and lessons in cleanliness, grooming and discipline.
In addition to academic sessions, the trainees would gain significant exposure to the company’s famous Toyota Production System and the Toyota Way. Toyoshima said, “We hope the students will be able to appreciate various aspects of Monozukuri or skilled manufacturing in the Toyota Way. They will not just learn but also practice Monozukuri.
Though the company hoped to employ all the trainees once they had completed the program, the trainees were not under any compulsion to join the company. Somanath said, “It is a corporate social responsibility initiative for us. Analysts too agreed that the company was indeed making a positive difference in the life of the trainees. They were not only getting a taste of a better life and had a better future to look forward to, but were also in a position to send home a part of their stipend.
According to the company, TTTI was still in the testing phase and the first batch would be like a test case for the future. The institute would train approximately 180 trainees across three academic years. The management at the company felt that keeping the future growth of the Indian market in mind, setting up the TTTI in India made good business sense. India was one of the world’s fastest growing car markets and was poised to grow at an astounding 14.9 percent through 2010, according to Frost & Sullivan. According to some estimates, by 2010, the number of cars sold in India annually would double to 3 million, compared to 2007. In such a scenario, TKM had to quickly ramp up its presence in the market. As of 2007, TKM had a mere 4 percent market share in India.
Analyst noted the company was lagging far behind its competitors and felt that this initiative would TKM become more competitive in the future. They expected TTTI to play a key role in the development of human resources at the company and to help bolster the company’s production operations in India in the future. Some industry watchers also pointed out that between 2002 and 8 Monozukuri is a Japanese word consisting of two words mono (products) and zukuri (process of making). But the meaning of the word goes beyond the combined meaning of the two words to encompass ‘excellence, skill, spirit, zest, and pride in the ability to make things very well.’ (Source: Kozo Saito, “Development of the University of Kentucky – Toyota Research Partnership: Monozukuri: PART I,” Energia, Vol.17.No.4, 2006.)
2007, TKM had suffered due to labor unrest in its facilities in India, and viewed this initiative as an attempt by the company to breed loyalty on the shop floor. Business Week noted, “Another, ulterior motive was ensuring labor loyalty. For the past five years, Toyota India has suffered a series of strikes and a lockout, with labor unions protesting in support of better wages and against the dismissal of two of their members. Training youth in-house helps build loyalty for Toyota on the assembly line.
1. Describe the probable reasons for the setting up of the TTTI in India. Describe the direct and indirect benefits accruing to TKM by running the TTTI. What, according to you, are the short-term and long-term benefits to the company?
2. The TTTI trainees were not under any compulsion to join the company (TKM) once they had completed the training program. What are the possible advantage(s) and disadvantage(s) of such a policy?
3. In your opinion, will similar training initiative be successful in the service sector? Explain in the context of a few service industries that you are familiar with.
CASE – 2 Dealer Training Programs – A New Trend
In India, the corporate training market was pegged at Rs 25 billion (by the end of 2004) and was growing at a rate of 30% annually. Though sales training was not new concept in Indian industry, the trend of extending sales training initiatives to business partners was slowly catching up. The automobile companies were among the first to implement dealership training programs. For example, when Maruti Udyog Limited (Maruti) got the highest rank in customer satisfaction in the JD Power Asia Pacific India customer satisfaction index (CSI) study in 2000, it launched ‘Project Hat Trick’ in consultation with NIS Sparta, a leading training and consulting organization. The project aimed at creating excitement among the service staff (of the dealers) and also imparting the knowledge and know-how required to satisfy the customer. As part of the project, the service supervisors were trained on the aspect of customer delight and managers were trained on leadership and business planning aspects. The service mechanics were given training in the areas of self-empowerment and behavioral interventions. This also helped to bring about attitudinal changes in the dealer segment to meet the demands of customers. Consequently, Maruti received the award for the next two consecutive years. In 2002, it topped in four out of five factors of the customer satisfaction index (CSI) and received the highest score of 124 as against the industry of 118.
Speaking on the issue of training in the automobile sector, Vijay Kohli, Vice-President, NIS Sparta, said, “Training in this sector is also quite different from others as here the customer expects sales executives to know the features, advantages, and benefits of each and every part of your vehicle. Not only that, the customer also expects the executives to know the technical side and the product advantages over others to make his/her decision.
Consumer appliances manufacturers were also focusing on these areas in light of cut-throat competition, increased customer expectations, and the increased complexity of the product line. For example, Philips India Ltd. (Philips) a leading consumer appliances company, launched a dealer training program in 2000 called ‘Unique Selling Program’ (USP) aimed at creating awareness about its products among the dealer sales personnel as well as to enhance their softselling skills. The training program consisted of the following elements – role play, presentations, hands-on-demos, and group working. The role plays enabled the participants to comprehend the features of the products thoroughly. The hands-on demos trained the participants on conducting product demonstrations to the customers. In the group working module, participants were allowed to team up with other members and conduct demos without the help of the trainers. Through this program, Philips aspired to enhance the salesperson’s selling skills, communication skills, and sales closing techniques. The company conducted 40 such training programs covering 25 cities across India. The program was a success as it helped the company to improve its market share in big stream audios and CD-VCRs segment by 80% and in the Walkman market by 20%. Speaking about the success of the program, Rajeev Karwal, Philips India senior vice-president (consumer electronics), said, “The company has benefited from this exercise as the USPs have helped in reinforcing the superiority and product differentiation of Philips products in the dealer salesman’s mind, resulting in increased confidence in the Philips brand.” Buoyed by the success of the program, Philips decided to make USP a regular feature and conduct the program twice every year.
Dealer training programs were also being increasingly adopted by FMCG product companies. Sensing the need for training its business partners, HLL, the leading FMCG company in the country, launched an ambitious sales training initiative aimed at distributors’ salesforce called ‘Project Dronacharya’ in 2003. Under this program, HLL planned to train nearly 10,000 retail stockists’ salespeople spread across 70 cities in a phased manner. The training program covered various aspects of the sales process including merchandising, route planning, cross-selling, and upselling. The training job was entrusted to leading training organization NIS Sparta. The training program involved 139 trainers called ‘Dronacharyas’ accompanying the retail sales stockists’ men (RSSM) on the field and explaining what their shortcomings were and how they could improve their skills. Within eights months of the launch of the program, HLL saw good results. The total lines sold per day (TLSD) and sales target improved by 15%. Some distributors achieved sales above Rs 10 million.
Another prominent example in the FMCG sector was the Gujarat Cooperative Milk Marketing Federation (GCMMF) (the brand owner of Amul), India’s largest food products marketing organization. GCMMF also undertook a similar initiative called ‘Amul Yatra’. Under this program, the company trained all its 3,000 distributors and their sales force on various aspects such as the Federation’s philosophy and culture, procedures, and operational systems. The training program also aimed at improving their selling skills.
Commodity product manufacturers like Tata Chemicals too focused on training their business partners. In 2002, the company conducted a training program for its business associates aimed at strengthening the brand equity of Tata salt, the largest selling iodized salt brand in India. Tata Chemicals initiated these training programs as a part to its strategy to develop a long-term relationship with marketing and distribution partners, to improve the synergy between the company and the channel members, as well as to leverage on the resources effectively and efficiently. During the first phase of this initiative, the company conducted a five-day training program called ‘owner management program’, wherein the channel members and distributors were provided training in marketing and strategy skills. The objectives of this program were to:
- Equip participants with marketing concepts, techniques, and functional inputs.
- Help them comprehend organizational decisions and responses in the face of evolving markets and consumers.
- Help identify opportunities and successfully manage an enterprise.
- Enhance value propositions in transitional markets.
- Make informed and progressive decisions based on the marketing mix.
In the next phase, the company conducted an intensive sales training program for the sales force of Tata Salt channel members and distributors. In this program, participants were trained to get a better focus of the market with a suitable sales strategy. It also helped the participants in managing markets for profits and growth.
1. Indian companies, which used to focus mainly on sales training programs for their own sales force, are now extending these initiatives to their business partners. What are the major reasons behind the increasing prominence of such initiatives among Indian companies? Also throw light on the advantages and disadvantages of outsourcing the training activities to third parties.
2. Behind every successful dealer is a smiling and efficient dealer salesperson. Explain the relative importance of dealers in the consumer durables industry over and above those in the FMCG industry. How have consumer durable players improved the performance of their dealers through training?
CASE – 3 Enhancing the Credibility of the Training Function: Involving Line Managers in Sales Training
“Rakesh let me make it clear to you that I can’t allocate any more money for training. I can understand why you want to conduct a training program on coaching skills for the line managers, but I can’t help you in this regard. Not for another year at the very least. In fact, I may have to curtail your training budget for next year as we are going through a lean phase,” said Sanjay Shah (Shah), the CEO of Dirc2U, a direct sales company that dealt in a range of consumer appliances. From his tone, it was clear that he would not entertain any further discussion on this topic.
Rakesh Sharma (Sharma) had been working as the training manager (TM) in Dirc2U for the past three years. During this period he had single-handedly taken care of all the training and development (T&D) activities of the company. Of late, he felt that despite a contemporary training program, the sales force was unable to internalize the training due to lack of support from the line managers in the field. Sharma, who had ample experience in sales and sales force management before getting into the training function, understood the significance of the role of line managers in reinforcing the class room training. His repeated proposals to conduct a training program on coaching for the line managers had fallen on deaf ears. But Sharma knew that he could not let the situation drift any longer. The company had failed to achieve its revenue targets in the previous year. This year too, it was struggling to reach 75 percent of the projections. Since it was difficult to measure the return on investment (ROI) of training, the training budget tended to get the chop during tough times. In such a situation, Sharma could expect some cuts in his budget for the next year. Yet he knew that in tough times there was a greater need for T&D interventions. He also knew that if things got even tougher, and the company decided to cut costs even more, the job of the TM would be one of the first to go.
Sharma was almost certain that he would convince Shah regarding the importance of this specific T&D plan for the line managers. But no amount of persuasion could budge Shah. Sharma’s hope of involving the line managers in making sales training more effective seemed unlikely, at least in the short term. Now he had to find dome other way to make the sales training more effective. He also decided to look at ways to project the importance of training to the top management.
Before joining as the TM in Dirc2U, Sharma had worked in another direct sales company for ten years in various capacities – sales representative (SR), area manager (AM), and then regional manager (RM). During his tenure there, he had developed an interest in T&D. Three years ago, when he saw the advertisement for the post of training manager in Dirc2U, he immediately applied for the post. Though he did not have any formal qualifications for the job, his ten years of experience in the sales function saw him through the interview process. Sharma was in the habit of regularly updating himself on issues related to this job and his other interests. In addition to his experience of providing on-the-job training (OJT), the interview panel headed by Shah was impressed by his understanding of different issues related to the training function.
A lot had changed since then. Sharma had conducted about 50 training programs in three years. He had conducted basic sales training courses for new entrants as well as refresher courses for all sales people on an annual basis. His long stint in the industry helped him to design very contemporary and, at times, innovating training courses. During implementation of the training programs, Sharma generally avoided the over-used lecture method as much as he could. His training programs had lots of scope for interaction, experience-sharing, feedback and practice. He facilitated understanding of key issues through the use of real life stories and anecdotes. This made his sessions informative as well as interesting. Many of the trainees were attracted towards his personality due to his cheerful countenance and as he was very approachable. He used a lot of role-plays to reinforce the learning points and skills, and assess the transfer of learning/skills. He also made it a point to visit key customers with the SRs whenever there were no training programs. This helped him to understand important operational issues and be in sync with the changing requirements of the industry, and uncover training needs. Sharma believed that the training programs were quite contemporary and the quality was better than the industry average. But despite this, Sharma was left with the feeling that the organization was not getting the best results out of the training programs.
During his field visits with some of the SRs he had trained, Sharma observed that the SRs were not practicing what they were taught in the classroom. One of the SRs who had done very well in the training program explained, “The training was very informative and I learnt a lot from the program. However, real world situation require us to adapt our knowledge according to the situation. My boss told me that we have to be more practical in our dealings with the customers.”
Sharma was aware that most line managers had this attitude. He knew how important line managers were for reinforcing initial training, but it was often these people who could also unknowingly do a lot of harm. It was not uncommon for a line manager to comment, “Congratulation! You have done exceptionally well in the training program. Now, let me show you how things are done in the real world.” Comments like this could prevent the trainees from obtaining the optimal benefits from the training program. Sharma made a mental note to discuss the issue with Shah.
“I get your point. Such things happen in every organization. But, you have to find out the best way to solve your problem,” said Shah.
Sharma had come prepared for the meeting. For the last six months, he had been working on a project to prepare some training modules for the line managers. The course was on coaching skills for line managers. Sharma contended that though coaching was a vital part of a line manager’s responsibility, many of them didn’t actually know how to do it. He argued that if a formal coaching system was put in place, the line managers could reinforce the classroom training; this would lead to the overall development of the sales force. After Sharma’s presentation of the detailed training proposal, Shah said, “I am impressed. But to tell you the truth, we won’t be able to implement such a program for another one or two years. We have to really ramp up our presence in the market and I can’t afford to bring the managers out of the market for a training program at this juncture. Moreover, we are in the process of cutting costs to meet the profit budget, as we are struggling to meet the revenue budget. We have to wait till things get better before we can do this.”
“But all our expenditure on training is being wasted, without the support of the line manager. What so you suggest we do about that in the mean time?” Sharma asked.
Shah retorted, “Well, you are the training manager. You have to make the most of the resources you have. Speak to the line managers, persuade them to see things your way.”
“Don’t you think they should be the ones to approach me with their problems?” asked Sharma.
Shah replied, “If they are not doing so, you should give them a reason to approach you. Just because you are a training manager does not mean that they will approach you. They have to see that you are a useful resource for them. They have to see results.”
“We are not getting the optimum results out of our training programs due to the non-involvement of the managers. You are saying they have to see results before getting involved…it’s a chicken-and-egg story…let us initiate some thing from our side…this training program could be the first step,” said Sharma.
Shah replied, “You can forget about this training program for the time being…If you ask me, the answer would be to conduct fewer training programs and focus more on ensuring that the programs are effective in increasing the sales…and believe me, there will be fewer training programs now, as the training budget is going to be cut.”
Sharma was very disappointed. He said, “Sir, I understand we are going through a lean phase. But, don’t you think there is a greater need for training in such a situation?”
“I will be happy to allocate you the money. Show me some results. I should know what is the ROI from training,” said Shah. Sharma could detect a hint of sarcasm in Shah’s words. Both the men knew how hard it was to ascertain the ROI from training.
The discussion went on for a few more minutes, but no amount of persuasion could change Shah’s position.
From the time he joined Dirc2U, Sharma had dreamed of putting a training organization in place about five years, with a team of at least three more training managers. The meeting with Shah had made him realize that the very credibility of the training function in the company was at stake now. With his job on the line, Sharma, personally, had even more at stake.
Sharma now had to figure out how to get the line managers more involved in sales training. He also had to work towards earning more credibility for the training function in the eyes of the various stakeholders.
Sharma understood that getting the involvement of the line managers was easier said than done. There wee many conflicts of interest. He recalled that the line managers had not been very responsive to the overtures made by him on earlier occasions. Many did not feel that training was helpful to them. He had even heard some line managers complaining about how man-days were lost due to training. They felt that their team members were better off in the field doing some work rather than attending a training program on a “vacation paid for by the company.” Some managers even felt that a person who was not born with the skills to be a salesman could not be trained to become one. Line managers were also heard saying that on-the-job training (OJT) was the best form of training a person can get. In fact, during the lunch break at an earlier training program, a newly appointed AM had told Sharma, “My take on training is ‘push them off the cliff, and they will learn how to fly’. I feel that classroom training is a waste of time and money…on-the-job training is sufficient.”
Sharma wouldn’t have had any issue with such an attitude if the line managers were indeed concerned about training their team members. In his earlier company, he had trained many SRs in the field as he perceived that the quality of formal classroom training was poor. But often, OJT was merely teaching the SRs some thumb rules and shortcuts that did more harm than good in the long run.
To make his case that training was useful, Sharma began by collecting the pre-training and post-training sales data of the SRs. Although he had to follow up a number of times with some RMs before he received the data, once the data was tabulated and analyzed, Sharma felt that the effort had been well worth it.
On analyzing the pre-training sales figures and comparing them with sales figures after three months and six months of training, some patterns began to appear. Sharma found that in most cases individuals or teams who had received training along with their first line managers were more likely to have performed better than those individuals or teams whose managers did not attend the training program. He also found that SRs whose managers were more enthusiastic about training were doing better than SRs whose managers were skeptical. He also found that some of the teams who were doing exceptionally well had line managers who were true champions of training. They used to consult him regarding sales training-related quite regularly. They were also the ones who regularly provided feedback and suggestions to him on how to make the training program more effective. The problem was that such managers were few and according to Sharma this was, in part, responsible for the poor sales performance of the company.
Though this information was significant, Sharma knew that it would not be enough to convince Shah. He had very little data to support the conclusion he had reached and Shah would probably dismiss his findings as flawed. It was difficult to attribute the sales to training alone, as there are so many other factors that impacted sales. Moreover, he felt that it would be too early to go back to Shah. He decided to do some further groundwork before approaching the CEO. He decided to go with these findings to the national sales manager (NSM), Sanjeev Rao (Rao), instead.
Rao had been heading the sales function at Dirc2U ever since the inception of the company five years ago. Though he was not a big champion of training, Rao understood the importance of training.
After going through the report, Rao said, “Very interesting…Managers do have a role in helping reinforce classroom training. So, how can I help you?”
“I wish we had greater involvement of the line managers in sales training,” said Sharma.
Rao said, “If the line managers feel that their objectives are in alignment with your objectives, they will definitely work with you. Why don’t you talk to them, and show them this report?”
“I will do that right away. But I also expect you to speak up for this initiative with your team,” said Sharma.
“You can count on me.”
It was six months since Sharma had that interaction with Rao. In addition to setting up open lines of communication with the RMs and AMs, Sharma, had also started involving them in designing the training programs. Trainees came to programs with an assessment of their strengths, weaknesses, etc., from the line managers; after training they went to the field with assessment of the training manager and individual development plans to be followed up by line managers. That Rao championed the cause also helped attain this breakthrough. Now, more line managers have started approaching Sharma with their problems or suggestions.
“They (the line managers) are so involved because you have involved them in training process. Most of all, as they have understood that your objectives are no different from their objectives and that training helps them in achieving their objectives. Some line managers have witnessed a positive change in their sales figures that they attribute to training. The stature of training has grown in the eyes of the line managers,” said Rao.
“Thanks to you. Do you think we can take this partnership to the next level with a formal training program on coaching skills for the line managers?” asked Sharma.
“Suits me,” Rao replied.
During the period, Sharma had also accumulated data to project the direct (such as new skills learnt), indirect (such as before and after analyses of improvement in closing sales calls) and long-term benefits of training (such as improved customer relationship). He felt that this data would be helpful in linking training to the bottomline results. He had also started networking with other T&D professionals in the industry. Insights gained from such networking helped him forge better partnerships with the sales force as well as explore ways to project the benefits of training to the top management. With more line managers approaching him with their problems, it had become necessary for him to continuously upgrade his knowledge.
Sharma believed that after another three months he would be in a position to put forward a strong case for a training program for managers in front of Shah.
1. Discuss the importance of line managers in reinforcing initial classroom training. What are the issues and challenges faced by training managers in partnering with the line managers? How can these be overcome? In your opinion, how did Sharma succeed in forging a partnership with the line managers?
2. Training is viewed as a cost. Although experts opine that training is needed the most when a company is going through tough times, it is in such situations that training budgets are most likely to be slashed. What are the problems in ascertaining the ROI of training? How can training link training to bottom-line results?
1. If you were going to use online technology to identify training needs for customer service representatives for a web-based clothing company, what steps would you take to ensure that the technology was not threatening to employees?
2. What could be done to increase the likelihood of transfer of training if the work environment conditions are unfavorable and cannot be changed?
3. Why would a company use a combination of face-to-face instruction and Web-based training?
4. What does “managing diversity” mean to you? Assume you are in charge of developing a diversity training program. Who would be involved? What would you include as the content of the program?
5. Why should companies be interested in helping employees plan their careers? What benefits can companies gain? What are the risks?
6. Discuss how new technologies are likely to impact training in the future.