Computer-based training is cheaper, more convenient, and better paced to the individual than the classroom kind. Increasingly, small companies are reaping its rewards

David Johnson looked around the Chattanooga Group's training center and sighed. Large, expensive physical therapy machines--those that the $40-million manufacturer of physical-rehab equipment sells for $35,000 to $55,000 each--lay in pieces on the wide stretch of carpet. Pulleys, cables, weights, and levers sat in motionless heaps beside large boxes. Just days before, the company's six-person in-house training staff had used the fully assembled machines to train a group of Chattanooga's customers--physical therapists and medical-supply dealers who'd been flown in especially for the two-day demo. Now, as Johnson stood and stared at what resembled the scattered wreckage of an airline disaster, a crew of workers abandoned their posts on the factory floor and began to cart the pieces away.

The scene was a familiar one. The Hixson, Tenn., company regularly assembled and dismantled six of its heavy machines when training customers. Because the big-ticket items represented such a large slice of inventory, the company simply couldn't afford to set them aside just for training purposes. The practice--along with Chattanooga's policy of paying for customers' airfare and hotel bills--cost the company at least $200,000 each year. "We were known as 'the education training company,' " Johnson says. "But the gratis education we were providing was drowning us in red ink."

Johnson knew there had to be a better way. Brought in as Chattanooga's new general manager of physical-therapy products and rehabilitation in 1994, he threw himself into both toning up the company's 18 outdated models and trimming down its costly training practices. "I'd had some experience in multimedia training," he says, "and figured that using computers was the only way we could afford to take our training to a new level."

He's not the only one who's come to that conclusion. Training by computer began as far back as the 1970s, when Chrysler launched computer-controlled interactive video disks to teach skills to assembly-line workers. Today, according to a study by SB Communications, in Hingham, Mass., most big companies--those with 3,800 employees or more--use computer-based training (CBT), primarily to train their staff in using software programs. But smaller companies are increasingly turning to computers, too, for everything from on-line employee manuals with clickable question-and-answer areas to step-by-step interactive training in sales negotiation and regulatory compliance.

In part, it's because they've had no choice. More small companies are selling complex goods and services that require customer and distributor training, and computer-based manuals are the most mobile and thorough way to do it. Speeding acceptance of computer training is the fact that even people with very little computer experience are becoming less intimidated by technology and are willing to put up with the learning curve required by CBT. Lured by the financial and logistical payoffs of CBT, small companies in a variety of industries are taking the leap--especially when training is central to their enterprise or when their employees are scattered all over the map.

Classroom Without Walls
Environmental- and safety-consulting firm Professional Analysis Inc. (PAI) knows how crucial the right training can be. "Regular training is part of our philosophy," says CEO and cofounder Doan Phung. Sometimes it's even government-mandated for the $16-million company because it has to adhere to myriad health, safety, and security rules and regulations as it goes about its business of, among other things, investigating toxic-waste sites and devising plans for their cleanup. But with 124 full-time and 200 part-time employees at eight offices across the country, getting everyone together at the same time for classes is impossible.

About a year ago, human resources manager Jeff Ginsburg, vice-president of development Richard Parker, and computer engineer Ahmad Elhaddad came up with the germ of a plan when they were discussing ways to hook the personal computers in PAI's four main offices into a wide area network. They realized that one way to leverage the investment, and also to ensure that everyone learned the same thing in the same way, would be to convert the in-house training into software and install it on the network. Employees could then conduct lessons on their own, walking themselves through text material and quizzes to make sure they were absorbing the information.

The trio already had a model. Three years earlier, one of their biggest clients, now known as Lockheed Martin, had introduced a computerized version of the general employee training it required all subcontractors to take every two years. PAI had installed the program in a training lab at its headquarters in Oak Ridge, Tenn. It's not a multimedia extravaganza--indeed, it's more like a book on a disk, with a test at the end. But workers can fit the training in around their customer commitments.

Six months ago, programmer Elhaddad began applying that model to PAI's in-house training and policies. He didn't have a budget for the project--in fact, he was squeezing the work in whenever he wasn't busy with official assignments. So he started with something relatively simple: transferring PAI's 40-page employee benefits handbook to disk. The new arrangement would not only keep employees up to date on personnel matters but also, Elhaddad hoped, eliminate the need for annual benefits meetings.

To create the disks, Elhaddad needed an authoring program. After testing four of them, he settled on Digital Trainer, from Micromedium ($279; 800-561-2098). Although it was more limited than some of the other programs available, it was cheaper and provided all the necessary features: it allowed him to create text, pictures, and lots of question-and-answer sections.

Now he's on to a meatier project: turning the company's four-part quality-control and OSHA training classes into CBT software. The quality-control class, which is given every year to all full-time and part-time employees, covers everything from work flow to record keeping. Using Digital Trainer, Elhaddad plans to make the program interactive. For example, when an employee answers a question incorrectly in one of the trial tests, the program will give him or her the option of jumping back to the appropriate explanation in the text. He also plans to incorporate some high-powered features in the software for the 40 or so employees at the company who are stationed at hazardous work sites and must take an initial 40-hour safety-training class that's followed by an annual 8-hour refresher course. Among other things, the students will be able to just click on words they don't understand and on any of the thousands of acronyms they're required to know, and the definition will automatically flash on the screen.

Human resources manager Jeff Ginsburg has been more than encouraged by Elhaddad's progress. Having employees learn on their own, he says, has already solved PAI's logistical problems. "It is a much better method of training," he says.

Live and Learn
Vidcon Enterprises Inc., which runs convenience and video stores in the Battle Ground, Wash., area, has been concerned not so much with standardizing training as with providing it in the first place. With no human resources department, the $3-million company had pretty much left managers to learn by the seat of their pants rather than in any systemized way. "A big company will have a human resources department that can teach managers all kinds of skills," says Jeff Kostman, a Vidcon district manager. "We had nothing."

Cofounders (and brothers) Kevin and Kerry Schulz were particularly irked by how the company conducted performance reviews. "In the beginning, I knew everyone, and it was easy to have constant communication," says Kerry, who is vice president of the company (Kevin serves as president). "Evaluations were done every day." But in 1993, when Vidcon opened its third store, the staff grew to 30 and the informal review process broke down. Along with the expansion came new managers and assistant managers, and the Schulzes needed a more formal and consistent way to evaluate employees.

So Kerry instituted a twice-a-year review using standard evaluation forms from a local office-supply store, which he modified to fit his business. But as the company continued to grow (there are now six locations and close to 70 employees), Kevin began looking into performance-review software and became tantalized by the customizing capabilities of what he found. He ultimately selected Performance Now!, from Knowledge Point ($129; 800-727-1133). The program was so easy to master, Kerry had it running in just a few hours. And the approach made sense: the program features a series of 30 "elements"--categories like job quality and overall cleanliness--for rating employees.

Because computers at most of Vidcon's stores don't have the capacity to handle the program (it requires at least a 386 processor), Schulz installed the software at only two locations: on a PC at the biggest store and on a PC in the main office. Managers at stores without the program travel to the main office to use it, or Jeff Kostman makes sure they get a hard copy.

To the brothers' surprise, the managers didn't merely produce better performance reviews; they learned how to be better supervisors, too. That's because the program was functioning not just as an evaluation tool, says Kostman, but also as a human resources department, offering guidance to managers as they went along.

Take the category of job quality. Managers click on the category, and various headings, such as Strives to Achieve Goals and Meets Deadlines appear. They then rate employees in each subcategory on a scale of one to five. The program automatically summarizes the ratings in a descriptive paragraph, which can be edited further. A sample summary generated by the program might read: "Bob produces more work than expected. He always meets his deadlines and demonstrates a strong commitment to increasing productivity and achieving his goals."

The program, Kerry realized, was teaching managers a more effective language to use when evaluating employees--one that is objective, to the point, and consistent. What's more, if they slip up and write something inappropriate, the program alerts them to their mistake, making them aware of important policy distinctions. For example, if a manager writes, "This employee is too young for the position," a box appears on the screen with a warning not to confuse experience with age. When managers aren't clear about what a term means, they can click on an advice section and get additional information.

Performance Now!'s detailed subcategories have given managers a broader view of employee performance, as well. For instance, Kostman says he had never thought much about the importance of "asking for help when necessary." But once the program prompted him to take note of it, he started looking for it regularly. The category came in particularly handy when he was evaluating one beleaguered manager who had trouble delegating duties to her staff. In their weekly meetings, Kostman began making sure she wasn't taking on too much. And recently, when he asked her to deliver a report about video rental rates, he made a point of telling her she didn't have to do it herself. With that kind of coaching and feedback, Kostman says, the manager's performance has improved considerably.

Other managers quickly began showing changes in their handling of day-to-day interactions. Brandy Tennimon, who manages a store in Woodland, would often let personnel problems go without comment. "Now I handle things directly, as they come up," she says. Case in point: When an employee failed to help out on an especially busy morning, Tennimon pulled him aside to talk about it instead of letting the matter slide. The employee hasn't made the same mistake again. "Before, I would have just chalked it up to his personality," she says.

As Kostman sees it, the program has changed his entire concept of what a manager's responsibilities should be.

Teach Your Clients Well
For David Johnson, the change brought about by computer-based training has been on a more global level--literally and figuratively.

When Johnson joined the Chattanooga Group, Inc., his mission was to revive the company first, then morph it into a global player. His mandate: to expand the maker of heavy-duty rehabilitation machines into the European and South American markets by mid-1996. But the training that had given Chattanooga its place in the market was beginning to eat it alive. "We wanted to maintain our reputation as the 'education training company' but with fewer people," says Johnson.

Bringing all his multimedia experience to bear, Johnson began by convincing the company to lay out $50,000 for an ambitious technology lab to design CBT programs capable of taking over the training that the more expensive six-person in-house training staff had been doing for years. His logic was compelling: The programs would be portable and would have multilingual capabilities--both of which were necessary to serve overseas distributors. And they would allow Chattanooga to send out a single trainer to make house calls to customers' offices for the first time, which the company could easily charge for.

After reading back issues of multimedia magazines, conversing over the Internet, and testing about 50 programs, Johnson assembled a full-blown video-editing suite to produce custom training videos. The company equipped itself with an impressive arsenal of tools: two Pentium-based PCs; one Sigma Designs MPEG video-capture card and one Targa 2000 video-capture card for capturing full-motion videos and stills; a Yamaha CD cutter for making CDs; a Sony CBD 1000 computer-controlled tape deck for frame-by-frame editing; two tape decks for editing VHS tape; a Microtech 36-bit scanner for turning hard-copy images into digital format; a Sony camera for shooting videos; and Adobe's Premiere ($795; 800-492-3623) and Photoshop ($895), the first for video editing and the second for photodesign and production. The company also bought an authoring program called Authorware and a video-editing program called Director, both from Macromedia (both are included in the Authorware Interactive Studio, $1,999; 800-478-7211,

To train people on the company's revamped Kin-Com machine--a $35,000-to-$55,000 piece of equipment that evaluates, exercises, and rehabilitates every muscle group in the body--Chattanooga put the machine's 200-page manual on disk using Microsoft PowerPoint, a $339 multimedia program (800-426-9400, The training program uses a combination of text and still pictures and can be run directly on the Kin-Com machine, which is equipped with its own Pentium-based computer and 14-inch monitor. The company now sends a trainer to the customer's clinic to walk through the program--and charges $1,500 a day for the service.

By last fall, in line with its expansion plans, Chattanooga had a new network of 30 overseas dealers and their customers to train. So it translated the Kin-Com training program into Japanese, Spanish, and German. It also added interactive touch-screen technology and more digitized pictures. Now all a user has to do is touch the screen and instructions pop into view describing how to set up the equipment to work on injured knees, ankles, and so on.

The company is also using its computer lab to complete a more ambitious project: creating an interactive multimedia training CD. What was once a two-day training session covering basic setup and advanced therapy techniques will soon be run directly on the rehabilitation machines, allowing users to try out the techniques when it's convenient.

Thanks to cost-cutting, overseas expansion, and CBT, the Chattanooga Group has met Johnson's goals: it has reduced its training staff from six to one, and it recently moved into the black. Johnson's sighs are now of relief, given that he no longer has to watch production screech to a halt as manufacturing workers laboriously assemble and disassemble costly demo equipment. "We proved we could put the plan together," he says, "and save money in the bargain."

Different Strokes

Companies can choose from several approaches to CBT software:

Customized. Some companies hire outside consultants to design "courseware" just for their operation. Small businesses tend to shy away from this approach, however, because the cost often starts at about $100,000.

Authoring systems. These programs can be used to develop customized applications. At $3,000 to $5,000, they're a lot cheaper than the completely customized route but still pretty pricey. There's a big learning curve--about 200 hours of development time for every hour of actual training.

Prepackaged. There are perhaps 300 to 400 training programs on the market, some in CD-ROM, others in plain old disk form, costing $100 to $300. They're used for training people in everything from managing employees to better customer service. The good news is that their quality has improved dramatically in recent years; many programs include fancy graphics and sound.

Learn by doing. Also known as just-in-time training, this new breed of off-the-shelf software teaches students how to perform a job while they're doing it. For now, much of what's available involves technical material for programmers, but there's also some less-techie stuff for sale.

Anne Field is a freelance writer based in Pelham, N.Y.