Conquering the forgetting curve


Does training actually generate a sustainable return for the investment made by our clients? Having been in the industry for the last 15 years, I do truly believe it can….  However, it cannot be stated as a matter of fact or indeed a given perquisite.  Training does not automatically create better working assets for a business.  A sustainable return on investment (“ROI”) requires a precise componentry of training elements.  This componentry will differ from client to client, from region to region and will depend on the demographic being trained.

In discussion recently with a new client, a comment resonated with me.  Our client commented, “…previously our training programme began and ended with the classroom training programme – the learning decay is dramatic post training, as the classroom skills are not used immediately on the desk and therefore are not being reinforced”.

The forgetting curve
Learning decay or “the forgetting curve” as we have termed it, is potentially the most value destructive force we experience when designing our programmes.  How many training programmes have we been on in our past that, no matter how good, do not really translate into workable business solutions?  This is an unforgivable waste of time and resource.

This is also the main weakness of pure classroom based training.  If these classroom skills are not applied within a short time frame, they can and will be lost.  It is difficult to ensure that the skills taught on a programme, particularly our longer four to five week analyst programmes, are applied in the immediate period following the training.


Classroom training: The springboard

Don’t use the skills and they will be lost within a very short period of time.  Generally we only retain what we use.

Classroom training is a vital component of the training programme structure.  Nothing can replace the human interaction through the communication of training ideas, the resolution of confusion through discussion.  Intensive practical classroom training should drive a steep learning curve.  Getting attendees “to do” skills rather than listen to talk and chalk training, is effective. But no matter how good the instructor is, once they have departed from the training programme, the risk of learning decay increases exponentially.  This is especially so, given that most attendees will not apply all their new skills immediately following the training.  Don’t use the skills and they will be lost within a very short period of time.  Generally we only retain what we use.

So how do we not only sustain, but drive training ROI by minimising the impact of the “forgetting curve”?

A first class instructor to deliver the classroom content is a given.  This content must be structured in order to build a platform for sustaining training ROI.

How can this platform be structured and what do our clients require from us?

  • The instructor needs to hold and inspire their audience
  • The ability to break down complicated ideas into digestible and retainable knowledge bites
  • They must be capable of practical application of their theory
  • Empathy with their audience according to learning pace and accessibility to the content, is a must
  • To produce assessable key performance indicators (“KPIs” for the business to assess ROI.

Within the classroom this is a very achievable task.  All of our training is structured around transactions that reflect the current environment our participants will be working in.

Recently in the classroom we have used Dell’s deal to go private, pricing the fundamental value of Facebook (we didn’t get anywhere near the $38 initial public offering price) as well as from an equity research perspective trying to figure out what Apple Inc. is really worth.  We did the valuation assessment when Apple was trading at $408 at

the start of the summer.  We thought Apple was a buy, so we bought it (actually 40 days before Carl Icahn referred to the stock as being “extremely cheap” and investing in the stock as “a no-brainer” when priced at $465 – Carl you missed a trick there….).

Deals like Sanofi-Synthélabo taking over Aventis back in 2004, whilst an interesting transaction with useful learning points, (such as huge intangible asset fair value uplift) are still 10 years old and stand within an environment that is dated.  This is not to say that classic transactions do not have a place within our training from a historical perspective. We are simply saying they should not be a cornerstone 10 years on from their relevant periods.

Using these cases ensures that the participants apply their theory within practical context.  We get to “see” how they think, apply and problem solve.  All of this just adds weight to the reportable KPIs that multi-choice questions or written exams can never achieve.

So real deals will assist in retention of learning… as will exposure to the processes and deliverables the participants will see at their desks.  A number of our Investment Banking programmes are structured around the deal process (buy and sell side).  Rather than analysts being provided with a traditional IB structured programme of accounting, valuation, modelling and capital markets origination, the programme is structured around the deal process.  This structure allows the participants to see the context of their work, they embed themselves into the process and have exposure to the deliverables such as teaser documents, due diligence reports, client pitch books and offer documents.

The intention is that they hit the desks with some familiarity of the deal process.  These contextual learning pieces also provide placeholders for the newly acquired knowledge, thus smoothing the process of application post-programme.

Post development period: Perpetuity learning
But then the programmes finish.  The participants have built their Comps, DCF, merger and LBO models.  What comes next?  It is time to work and put these skills to practice.  However, it is very unlikely that all the skills will be put to work.  So it is natural that the untested skills degenerate – the “forgetting curve” kicks in.

Focusing on negating the impacts of the “forgetting curve” is possibly the wrong focus.  Learning should be a continual, perpetual process, not just a fight “not to forget”.

In addition to structuring the classroom training a number of tools are available to clients of Fitch Learning to ensure sustainable learning and investment ROI.  These tools will provide the necessary componentry required to achieve our and our client’s perpetuity learning goals

The Complete Investment Banker
More than 800 pages of invaluable information, the Complete Investment Banker is designed as a comprehensive guide for bankers during training, as well as a companion on the desk.

The manual is not just a collection of technical notes, but also practical and up-to-date advice for bankers at every level from intern or analyst through to managing director. Written by the industry’s leading IBD trainers, the manual contains the clearest explanation and application of technical content in a way that makes it accessible to bankers

Fitch Learning Exchange Complete Investment Banker videos (300+ HD videos)
The Complete Investment Banker product is supported by our on-line product Fitch Learning Exchange.  Each of our 300+ HD videos integrates with content from our publications.   The videos provide that on-demand content necessary for analysts who wish to resurrect knowledge from their previous training programmes.  The videos are designed and presented by the same instructors that produced the publications and trained them.

Webinar based CPD
Structured CPD can be a difficult one for clients to organise given the constraints of budget and an often disparate training population.  We have a private equity client where the analysts are spread over 33 global offices.  There is no budget to bring these analysts into a central hub for training, nor is there a desire from the business to lose their workforce on a regular basis for CPD at the GHQ.

The solution was to develop an investment selection project that the analysts worked on in groups over a six month period.  The project teams where brought together every month via webinars.  The webinars acted as a conduit for further technical training as well as a forum for project discussion.  The project conclusions were presented to the regional investment selection committees at the end of the project period.

The Complete Analyst LinkedIn Blog (2000+ members)
We make use of the LinkedIn social network as a means of keeping in contact with our population.  The LinkedIn blog posts technical material extracts and discussions from our Complete Analyst product portfolio; we have discussion contributions from some of our clients as well as post comments and analysis on recent deals in the news.

So to sum up, I think Confucius almost gets it right…

“I hear and I forget.
I see and I remember.
I do and I understand.”
However, I think we’d like to add to this great man’s wisdom…

“I hear and I forget.
I see and I remember.
I do and I understand,
I do again (and apply) and I reinforce and I retain.”



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