Tad Waddington is Director of Performance Measurement for Accenture. He received his PhD in Measurement, Evaluation, and Statistical Analysis from the University of Chicago. He is the co-author of Return on Learning: Training for High Performance at Accenture and the author of Lasting Contribution: How to Think, Plan, and Act to Accomplish Meaningful Work, which has won six prestigious awards. Fluent in Chinese, Tad is Global Senior Advisor to the Asia-Pacific CEO Association Worldwide. He also sits on three boards on three continents. He is also among my most cherished personal friends.
Morris: Before discussing Return on Learning and then Lasting Contribution, a few general questions. First, please explain your interest in and extensive associations with various Asian countries, notably with China.
Waddington: I suspect my interest in learning Chinese began in high school when I read Heinlein’s Stranger in a Strange Land and wanted to learn a (very) different language so I could think differently. I was also interested in philosophy so learned ancient Chinese and got a master’s in the History of Religions at the University of Chicago’s Divinity school. I’ve been going to China since 1983 so have friends throughout the region. And in a stunning act of bad planning, I married a Japanese woman.
Morris: What are some of the most common misconceptions in the U.S. about China and its objectives?
Waddington: People think that China is a rich and powerful country. It has half the per capita GDP of Botswana. People talk about “China” and “Chinese food” as if it were one thing, but we don’t do that with Europe and China is 1.6 times the size of Europe with far greater linguistic variety. Remember that a language is a dialect with an army. Many of what we call dialects are mutually unintelligible. I could go on, but just these two points—a huge, poor country—already give you an understanding of China’s objectives: To feed and employ its people without falling into chaos. Indeed, China’s objectives are far more tame than they could be; the West twice invaded China (1839-1842 and 1856-1860) to force them to buy opium and yet I’ve never heard the Chinese say they wanted revenge.
Morris: What can we learn from China?
Waddington: Absolutely nothing relating to business. OK, that may be a bit of an exaggeration, but think about this: When the West started doing business with Japan we wrote hundreds of books on Japanese management. I can’t think of one on Chinese management and I think I’ve found a clue as to why this is and it’s not just the effects of Socialism. If you look up “List of oldest companies” [click here http://en.wikipedia.org/wiki/Oldest_companies], the five oldest are Japanese, starting with a construction company in the year 578. It takes time to get good at something.
Morris: Both of us are the beneficiaries of a superb formal education. Here’s my question. How specifically have your studies at ASU, and then at the University of Chicago (both divinity school and graduate school) guided and informed, indeed nourished your personal development?
Waddington: I finished high school barely literate, having read fewer than ten books in my lifetime, but I graduated from ASU with a 4.0 GPA. I still have professors who tell me, “We live for students like you.” You can imagine how very little I slept those four years, but I learned discipline of mind. At the Divinity School I learned how to read, to see not just what is in the text, how it all fits together, and how it fits with other texts, but also how to see what’s not in the text and why and how it fits. With the PhD I learned to do the same thing with numbers. In short, I learned to think, which has nourished every aspect of life.
Morris: Here’s a follow-up question. As you reflect back on your years as a student, which books seem to have served as the most valuable “magic carpets” because they enabled your mind, heart, and soul to go where they had not been before?
Waddington: You are looking for an answer like Suntzu’s Art of War, which I’ve read quite a few times in the original, but a more honest answer is Han Yu’s (768-824) writings and is irrelevant, because it isn’t the content that mattered, but the process. I know the exact moment I became an intellectual: 3:41 a.m. on Thursday, April 12, 1990. By day I was reading Gadamer’s Truth and Method; the meaning of a text isn’t in the text and it’s not in the reader; nor is it in the intentions of the author. Meaning comes from a dialectic between the reader and the text, blah, blah, blah. At night I was translating Han Yu, averaging the blistering pace of about an hour a word. In frustration I thought, “I just want somebody to tell me what this means.” Then I realized that nobody could. Even if the professor walked in right then and told me, I would have disagreed, because I’d already considered that translation and rejected it for good reasons. I realized that I had tried every possible permutation of interpretations, still didn’t have enough data to be certain, but had to make a decision anyway and then take responsibility for that decision. It sounds abstract and esoteric, but that is the nature of judgment and it has helped me in business, in parenting, in everything.
Morris: What are your most vivid memories during various foreign travels? Are there any persons, places, and/or experiences that you cherish most?
Waddington: In 1987 I started in San Francisco and went east, through the US, Europe, India, southeast Asia, China, and eventually in 1989 to Chicago. In Bali I hiked up to an old temple, almost overrun by the jungle. The temple was beautiful, but I was lonely as hell. I’d heard monkeys lived up there so brought peanuts. They swarmed me and I gave them all of my peanuts. They ate and disappeared into the jungle, all but one. It went through my hair looking for lice. I pretended to do the same to it. Then it sat next to me and put its arm around my shoulder. I put my arm around its shoulder and we watched the sun set into the ocean, my loneliness dispelled for a time.
Morris: Now please focus on Return on Learning. You are among its co-authors, together with Donald Vanthournoyt, Kurt Olson, John Ceisel, Andrew White, Thomas Barfield, Samir Desai, and Craig Mindrum. What were your specific responsibilities as a member of Accenture’s Capability Development team?
Waddington: To answer the tough questions: “What is the ROI of our investment in training?” “Do these sales courses help sales?” “Is the rating and promotion system biased?” “Are we a great place to work?”
Morris: Here’s a follow-up question. What were your primary responsibilities while the book was being written?
Waddington: Mindrum did the writing. I herded the cats, but since I was working with a team of professionals, this wasn’t too difficult. Mostly, I tried (successfully) to protect the publisher from being eaten by the behemoth that is Accenture and (not as successfully) to just tell our story—the good and the bad—without a lot of chest pounding. For example, there are way too many references to us being an award-winning training organization.
Morris: Here are two separate but related questions. First, can the ROI of learning be accurately and consistently determined? If so, how?
Waddington: It is a lot easier in an organization like ours in which you can use billable hours as an outcome variable. I was talking with the FBI about this recently and think it is much harder for them, but they are putting a training program in place for a reason. That reason is what they should measure against. Will it yield ROI? Maybe not, but ROI is almost never the thing you want to measure anyway. Not blowing up space shuttles might be a better measure for NASA than ROI.
Morris: For those who have not as yet read the book, it is worth noting that, as a result of the efforts of the Capability Development team, working closely with senior management and countless other associates throughout the firm, “for every dollar Accenture invests in learning, the company receives that dollar back plus an additional $3.53 in measurable value to its bottom line—in other words, a 353 percent return on learning.” Literally, ROL = ROI. Here are two questions. First, how important was the support of senior management?
Waddington: It has to be there, because training has to be integrated with the strategy of the organization. You can’t do that if you aren’t working together.
Morris: One if the book’s objectives is to explain “how other organizations can do the same.” Or how they can at least “use learning programs for major business impact, and can run learning as a business.” Here’s the second question: Can almost any organization (whatever its size and nature may be) achieve a comparable (if not identical) ROI from its learning programs?
Waddington: Yes, for two reasons, both of which I owe my understanding of to a chat I had with Gary Becker, the Nobel laureate in human capital. First, organizations never invest enough in human capital so any investment in it will give you disproportionately large returns. Second, there are no diminishing returns on investments in human capital. In other words, a chain is only as strong as its weakest link and the weak link is always human capital so when you strengthen it, you strengthen the entire chain and you can do so indefinitely.
Morris: Does Accenture still have a Capability Development team and, if so, does it continue to produce a substantial ROI?
Waddington: Yes and yes, and here’s how I know. The first time I calculated our ROI in training I used 261,000 records and scorched-earth analysis so that I could be sure that I had isolated the effects of training. Since then I have learned how big and robust the effects of human capital investments are. You can look at unemployment by education or lifetime earnings by education or at the 450% ROI of the GI Bill or Sandberg’s work on how the only thing that predicts very long-term per capita GDP is education and they all tell the same story, which told me that I didn’t need a microscope to find our return on learning so I went looking with a telescope. Anybody can do what I did: Take our annual reports and divide revenues by number of employees to get per person revenue. Do the same for training spend and compare last year’s per person training investment with this year’s per person revenue (because it takes a year for the effect of training to show up). Correct for inflation, plot it in Excel, and add the trend line. The slope is the value added by each dollar invested in training. In our case, $6.18 for an ROI of 518%.
Morris: As the title of his book, Reinventing the CFO, correctly suggests, Jeremy Hope is convinced that the responsibilities of the chief financial officer and perceptions of those responsibilities must be redefined. In your opinion, is that also true of the position (with title or in effect) the chief HR officer? Please explain.
Waddington: Redefined? Heck, they need to be defined, which leads me back to what I was saying about thinking. I did a mini-MBA at Booth and was shocked that many of even those great professors never defined their terms. If you take a philosophy class, you might start by defining your terms. If you don’t, it is because the concept is too difficult, in which case you build up to a definition and end with a clear understanding. The first thing I would have the chief HR officer do is answer such questions as: “What business are you in?” “Is it the same as the business your company is in?” “What is value and how does your business add it?” “What roledo people play?” “How do they add value?” “How do you add value to the people such that they add value to the business?” You can ask “strategy” questions without using words even as big as ‘strategy.”
Morris: Now please focus on Lasting Contribution. For those who have not as yet read it, to what does its title and subtitle (i.e. “How to Think, Plan, and Act to Accomplish Meaningful Work”) refer?
Waddington: How do you do something that matters? You cause it. How do you cause it? Not just with billiard-ball causality, but also with your passions, your plans, and your thoughts.
Morris: If your life were to end tomorrow, what do you think your own lasting contribution will be?
Waddington: Confucius said you make a lasting contribution by having kids and writing. Done and done. Socrates said you have kids, write, or do something that matters. (What does that alone tell you about the difference between East and West?) In terms of doing something big, I came up with an idea at work (that I’ve been asked not to tell anybody about so that our competitors don’t copy it) that everybody laughed at when I first proposed it. Now they say that it will be worth a billion dollars a year.
Morris: For those who have not as yet read the book, you cite a number of sources, including one that seems (shall we say) unusual: The Little Engine That Could. Please explain why you selected it.
Waddington: Above I mentioned Gadamer and said, “blah, blah, blah,” which actually means that the meaning of the text lies in how you use it. The meaning of The Little Engine That Could lies in a child bucking herself up to ride a bike for the first time, in an entrepreneur starting a business, in a nearly illiterate young man thinking he can learn Chinese: I think I can. I think I can.
Morris: In Denial of Death, Ernest Becker acknowledges that no one can deny physical death (he died of cancer just before the book was published) but he asserts that there is one form of death that can be denied: That which occurs when we become wholly preoccupied with fulfilling others’ expectations of us. That said, here’s my question. In your opinion, how can Aristotle’s four explanatory factors re cause-and-effect serve as a framework to help a person decide what her or his “lasting contribution” should be and then how to achieve it?
Waddington: About 2,300 years ago Zhuangzi said, “The fish trap exists because of the fish. Once you’ve gotten the fish you can forget the trap. The rabbit snare exists because of the rabbit. Once you’ve gotten the rabbit, you can forget the snare.” Above I mentioned Heinlein and learning a different language so I could think differently. I also suggested that clear thinking is valuable. So my goal was to give the reader a way to think clearly about how to have a meaningful life without making them learn ancient Chinese or get a PhD in statistics, to give them the rabbit without the snare. Aristotle’s approach to causing a contribution has more degrees of freedom than most people use when thinking about taking action. The image that pops to mind is that you are playing chess, but the game has never had knights. My book puts a knight on the board. Now you can do things, such as asymmetrically threaten a queen, an option that that you did not have before.
Morris: In the final chapter, you discuss six exemplary individuals: Jean Ann Lynch, Norman Borlaug, Georgia Sadler, John Harrison, Stetson Kennedy, and Lynne Cox. However different they and their lasting contributions may be in most respects, what do all of them share in common and what lessons can be learned from these six people that can help your reader to “think, plan, and act to accomplish meaningful work?
Waddington: None of them “just did it.” They all thought before they acted. None of them were whack-a-mole in their approaches. They all had a level of sophistication in their thought and action.
Morris: Which question had you hoped to be asked during this interview – but weren’t – and what is your response to it?
Waddington: What have you been thinking about lately? Consider f=ma or E=mc2 or that in an interview after he landed in the Hudson, Sullenberger said that there were alarms going off and a thousand things begging for his attention, but he focused on keeping his wings level (so he wouldn’t cartwheel when they hit the water), on his airspeed (so he wouldn’t stall), and on his altitude (so he’d know when they would hit so that he could pull the nose up at just the last moment). On the one hand, you have something fantastically complex, such as a crashing aircraft, and on the other hand, the human mind seems to be able to focus deeply on only about three things. To really understand something requires the finesse of mind to weigh hundreds of variables. Taking action requires reducing the complexity to its three key elements.
Tad Waddington cordially invites you to check out an introduction to Lasting Contribution.