'Execution, execution, execution...'
Donald Clark, Epic, was interviewed by leading e-learning
guru Elliott Masie at the TechLearn conference in Orlando,
Florida this year. This is a transcript of that conversation.
EM: Now for a spontaneous and unrehearsed
discussion. Could you introduce yourself, Donald?
DC: Hi, I'm Donald Clark, Chief Executive of the Epic, one
of Europe's largest e-learning companies, quoted on the London Stock
Exchange.
EM: Let's start with an overview. Where do you think the
e-learning space is right now? Using a football analogy, are we
on the 15-yard line or what?
DC: For the majority of people on Planet Earth, the word
'football' means soccer, and unfortunately we've scored a few own
goals, in soccer terms. That's bad news. A few things I've seen
at the conferences over the last few years have been disappointing.
To be blunt, we've made a few errors. The first was an absolute
obsession with learning management systems to the exclusion of all
else. Learners are not computer peripherals hanging off the network,
they are real people.
The second thing is the curious Lego brick analogy, which I've heard
several times at this conference, which has not really come to pass.
And also, rather worryingly, the failure of standards people to
produce 'the tipping point'. I must have missed this tipping point.
There's also bad news in the economy. What we're seeing in both
Europe and the US is consolidation through attrition, certainly
not consolidation through mergers and acquisitions. This requires
money and profitability and there's not much of that around at the
moment.
The good news is that the industry is reacting robustly to real
demands from real training people from real learners and becoming
more sophisticated. We've been stuck in 1950s behaviourism in terms
of the e-learning we're delivering. I don't think we've got out
of that bubble. It certainly still exists in the classroom, but
it also exists in e-learning.
I think we're finally seeing, with the drift towards knowledge management
and other things, a more realistic and sophisticated view of learning
in terms of collaboration, simulation and so on.
EM: Say some more on this. We're hearing
both sides of this LMS argument. Could you expand on this a little
further as you're articulating something that many people have said?
DC: The assumption is that an LMS is a necessary condition
for success. I came to TechLearn two years ago and saw Kevin Kelly
who gave us a very interesting lesson. He said don't look to vendors
for the future, look to the Internet and at what eight-year-olds
are doing. And what were these kids doing then? Well there was a
young guy, 19 years old, who took three months to write a piece
of software called Napster, 38 million kids using it, no marketing
budget.
There are now several interesting examples of file-sharing technology
where it is easy to tag and share stuff rather than the Big Brother
LMS with a big collection of content. These have proven to be expensive,
difficult to implement and difficult to integrate.
There are other examples of things happening on the Internet that
we should be copying. A good one is collaborative learning. The
Internet is a collaborative tool. The queues for email were longer
than the queues for the e-lab last year. Look at what eight-year-olds
are doing. They don't necessarily want the Big Brother, surveillance
view of the world, which is what an LMS sometimes gives you.
EM: At Home Depot they're doing great things, what do these
types of implementation tell you? Does it warm the cockles of your
heart?
DC: The Home Depot case study was fascinating. In Europe
we've seen a similar flourishing in the retail sector. These are
defensive stocks, people have to eat and drink so it goes on forever.
These guys have real problems, with high staff turnover and it is
very difficult to deliver training across their distributed structure,
so e-learning is an obvious solution.
Two other main sectors that warm the cockles of my heart, and the
two main sectors we work in, are the financial industry and government.
The financial sector want to go down the LMS route for good reasons.
Banks are big IT companies, they don't hold your money, they hold
a number, they number crunch. So there's lots of good activity there.
Maybe the difference between the US and Europe is in government.
The government has become the primary spender in e-learning in Europe,
certainly in the UK and northern Europe and that's been healthy
for all of us over there.
EM: Let me give you all a statistic, 46% of people at TechLearn
last year no longer have their jobs and half the companies have
gone out of business. This worries folks out there. What would you
tell them about the consolidation? Is there a parallel in Europe?
DC: I think your statistic says it all. 46% of people have
gone, not because of mergers and acquisitions, but because there's
been consolidation through attrition, going back to that phrase,
these are two entirely different things technically.
The market changed quite dramatically, not because of September
11, although that had something to do with it. You have analysts,
such as Peter Martin, who say you need near-term profitability,
cash generation and a strong client list. If you don't have these
you won't be around.
Business is very simple; you have to turn a profit. And for many
of those NASDAQ floats in 1999 and 2000, the profitability horizon
has been receding. Some will survive, some won't. But this is perfectly
natural in an embryonic, new market. You'll get companies going
out of business and others coming in. I don't think this is unusual.
However, the old rules of make a profit, generate cash and keep
your clients still apply. Execution, execution, execution - that's
what matters. That's why those 46% of companies have gone.
EM: Are you seeing some of the same pattern or mergers in
Europe that we see in the US?
DC: As I say, consolidation through attrition, definitely.
In Europe there has been only one major merger - M2S and Prokoda
- a culture clash, and it imploded. In total there's been little
or no M&A activity. Lots of consolidation through attrition. But
lots of new companies coming through as well.
EM: We've seen only 22 new companies this year, before it
was 165. What about Europe? Is the rate of new launch up?
DC: I wouldn't be able to quantify that. What there has been
is a broadening. You have specialist companies in higher education,
defence or government. So there's a broadening of the supply base
and that, by definition, means more players, but it is still very
fragmented, as it is in the US.
Remember that the Skillsoft/Smartforce merger was on the back of
a failed merger with Centra. So it was evens on that, one failure,
one success.
EM: How are you now going about your marketing to reach your
customers?
DC: Two approaches. The first is more of an emphasis on electronic
marketing. I don't like the simple oil and water blend of e-learning
and classroom, but the blend of e-learning and knowledge management
shows that you must share knowledge with your customers through
electronic marketing.
The second is cutting out of exhibitions. The e-learning shows where
you set up the big stand have been a big disappointment. Other forms
of marketing focus on people on the ground who can talk through
problems; relationship marketing.
EM: In terms of sales and marketing, who you've been selling
to?
DC: The big change there is the change management issue.
As people do pilots they are getting involved in change management.
Training departments don't normally have change managers so other
people come in from all sorts of other sources, sometimes external.
There's often a change manager in the mix somewhere.
EM: Let's suppose you had loads of spare cash, what would
you spend your money on? Where is the unmet need?
DC: I think I'd like to invest in a company that has abandoned
the words 'training' and even 'learning'. Noam Chomsky doesn't like
the word 'learning' and he has a point, yet we think it's an improvement
on the word 'training'. I'd like to see a company that does something
to merge knowledge management and learning using web technology.
When my eight-year-old son uses Google, he isn't aware of the word
'learning' but he learns. A company that abandons that old behaviourist
language would be a company worth watching.
EM: If you had one piece of advice to give buyers, to improve
the process, what would it be?
DC: Be really clear about the resources on your side before
you hit the street with the project. In my experience, many projects
slip because the customer underestimates the amount of effort involved
on their side. A modest amount of investigation before starting
should uncover this need. This makes it easier for us to help you.
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