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Click2learn and Docent Merger: Who wins and loses?
In what will certainly go down as the biggest corporate e-learning news of the year, Click2learn and Docent announced a merger of equals early last week.

I've been involved in quite a few merger and integration efforts and in my experience most turn out to be colossal failures. However, I think this one has a chance to be a big success largely because of the complimentary strengths of Kevin Oakes and Andy Eckert.

Kevin has had training in his blood ever since the days of Oakes Interactive and is clearly the guy with vision, a love for the product, and relationships throughout the industry. Andy is a relative newcomer to the industry and would never pretend to be driving product functionality. But his strengths are in sales, strategy, process and EBITDA. As long as they can play nice in the sandbox for the next 18 - 24 months Eckert&Oakes could become the executive dream team for our industry.

A business has three sets of constituents: investors, employees, and customers. So let's take a look at what this merger means to each group...

Investors: Potentially a big win. Both companies were losing money and often fighting head to head on many LMS deals. The new company should be able to realize significant savings by reducing the overlap in its sales force, marketing efforts, product development and G&A. This merger creates an obvious size-leader in the LMS space which could be to its advantage in the years ahead. The financial benefits have to come from the expense side as there won't be much from cross-selling. While it makes sense and is worth a try, cross-selling in any business is a creature akin to the Jackalope, Big Foot, and the Great Pumpkin.

Employees: Short term they lose, long term they win. Because of overlapping responsibilities, the new company should cut or offshore 20 - 30% of it's headcount. This is obviously bad for the employees who are going to be cut; but for the vast majority of the workforce who remain on, they'll be part of a much stronger company with a much brighter future.

Customers: This is a bit trickier. The big elephant in the room is the platform decision. Meaning, moving forward, will the new company's core products be built on C2l's Aspen platform or the Docent technology? If you just bought (or were about to buy) Docent over Click, and then they announce that Click is the platform, you won't be too happy. And vice versa. So short term customers lose due to the confusion and uncertainty. But long term, this is a win for customers who are now going to be supported by a much stronger company.

My Unsolicited Advice to Click2Docent...

Cut deep; cut quick. Everybody knows the cuts are coming. Headhunters are burning up your inbound lines, employees are busy updating their resumes and checking monster.com, and your workforce is wondering and worrying. This is bad for everyone. Get the cuts over as quickly as possible, in one round, and let the "keepers" know that they're part of the team for the long haul. Cut deep enough so you have a fighting chance at positive cash flow within a couple quarters.

Release a product road map ASAP. Your sales efforts are going to be REALLY tough until you get this out of the way. Deals are going to be delayed, maybe even a few lost, until the market knows what the long-term product strategy will be and how long they will be supported on their current platform.

Make your customers 3 promises. First, all scheduled installs will continue as planned. Second, current products will be supported for at least the next 24 months. Third, the road map will be announced within 90 days if the legal stuff related to the merger is out of the way.

How Effective is Multimedia in Online Training?
David Kahn, of The Human Equation, has written an interesting article that suggests the use of audio and video in online training might not be as valuable as we think. Kahn cites many research studies that find no significant difference in test scores between programs that use multimedia and those that are text-only. There has been a lot of research gathered on the superiority or not of multimedia in training.
Click here to read the article by David Kahn.
Visit the No Significant Difference website.

I've heard that there is a counter argument mounting with a website listing all the "significant difference" research studies. But I don't know the link. If anyone has it, please forward for the next issue.

Beyond Tactics: 6 Steps to Make Training a Strategic Force (November 19, 2003)
I learn something new every time I talk to Gili Gordon, the CEO of Worknowledge. This is your chance to hear his latest thoughts and to ask him questions from the comfort of your own web browser. This Interwise iSeminar is free of charge and is hosted by the ASTD, Worknowledge and Docent.
Click here to register at Interwise.

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Here's to living and learning,
-- Kevin

Kevin Kruse is the e-learning columnist for CLO, Chief Learning Officer magazine, author of Technology-based Training (Jossey-Bass), and President of Axiom Professional Health Learning. He can be reached at kkruse@e-learningguru.com.