Lev Landa's Worker Miracles

Lamenting the quality of public education has become routine in business circles, but few executives can feel smug. Although Corporate America spends $30 billion a year to train employees, no more than 25% fully measure up to expectations, and 20% to 40% fall short. At least that's the calculation of Lev N. Landa, a former Russian educator who fled to the U.S. in 1976. With better training, he says, "80% of employees could become experts" at work--helping to boost quality and cut costs.

To reach those goals, Landa sells a training system that, after a slow start, may be catching on. The most sweeping program is at Allstate Insurance Co., which aims to raise quality and customer satisfaction by turning its 54,000 employees into experts. The Northbrook (Ill.) unit of Sears, Roebuck & Co. is guarding its results. But a 1988 feasibility study points to huge payoffs. In Allstate's data-entry operation, where 4,500 people fed information from insurance forms into computers, productivity and quality jumped 75% and 90%, respectively. The promised savings: $35 million a year.

This potential came to light after Rich- ard A. Rosenthal, an Allstate assistant vice-president, heard of Landa's Landa-matics teaching system. At its core is a seemingly simple tool: a step-by-step diagram of the decision-making process. This "logic flowchart" in some cases runs for pages, yet each decision point has an easy yes/no choice. Workers soon "internalize" the underlying rules, Landa says. Then, they drop the crutch and "become real experts," able to apply the principles in different situations.

This invariably astonishes managers, says Janice L. Welker, who first witnessed such results in 1986. Welker then managed the claims department at Health Services Medical Corp. of Central New York, a health-maintenance organization near Syracuse. To train a new claims processor took a day of instruction plus nine months of coaching--until Landa did his chart. "He tested it on people off the street who didn't know the first thing about processing a claim, and they were able to do it right off," says Welker. "I was amazed."

LOGIC GAP. The trick is charting the right chain of steps. Experts are rarely able to list every move they make, and "the steps they skip are often the really important things," says Allstate's Rosenthal. This is why traditional training often leaves workers to catch on by trial and error--if they ever do.

Landa began to crack this problem while working on his PhD in the early 1950s at Moscow's Institute of Psychology. There, he developed a method for analyzing how people think: It reverse-engineers a decision-making process to find the gaps in logic that befuddle ordinary workers. By studying how experts handle these critical junctures, Landa reconstructs their thinking--even when they can't describe it. "When the experts see the finished flowchart," says Rosenthal, "their reaction is: `That's just what I said I do.' But if you look at their original descriptions, the logic uncovered by Landamatics just wasn't there."

Landa's theories catapulted him to fame in Russian academic circles. In 1963, he was named director of the Programmed Instruction Laboratory at Moscow's Academy of Pedagogical Sciences. Soon, high schools and universities were applying his ideas to courses in science, math, music, English, and medicine. His flowcharts were used in teaching aids and textbooks. Studies found comprehension gains of up to twenty-eight-fold.

After Landa emigrated, his name was blacklisted. And his fame in Russia didn't carry over when the psychologist, now 64, founded Landamatics International Inc. in Rego Park, N.Y. Even Allstate's Rosenthal was skeptical at first. If Landamatics was so good, why hadn't it taken hold at Du Pont, MCI, Hartford Insurance, and other companies where Landa had consulted in the 1980s? Checking out Landa's references, Rosenthal found a common thread: Landamatics had been applied only to specific departments or functions, not companywide. And while its original champions made it work, it seldom survived changes in managers.

At Ford Motor Co.'s Starnet Corp. subsidiary, for example, Landamatics "quickly saved $1 million" in the billing department, says Donald H. Ledbetter, who in 1986 was human resources director for the long-distance phone company. But when Ford sold Starnet, "the new owners dropped Landamatics, because we didn't have people who were trained to perpetuate the process," adds Ledbetter, who is now human resources director at Loral Corp.'s Conic unit. At DuPont Co., a flowchart for doing quality checks promised savings of more than $1 million a year. But the two managers involved were moved, and their replacements weren't eager to promote a technique that they considered too radical.

`STRONGER SUPPORT.' Similar worries nagged Allstate's Rosenthal--until he talked with Felix F. Kopstein, a Philadelphia consultant. In the 1970s, Kopstein helped translate several of Landa's books and became a disciple. By 1988, he was embedding Landamatics principles in software from the Nuclear Regulatory Commission that helped train operators of nuclear power plants. That was enough for Rosenthal, who proposed setting up a "university" where Landa would teach his system to Allstate employees. Raymond H. Kiefer, who retired in May as Allstate's president, bought the idea. The 24 Allstaters who have "graduated" so far have helped managers apply Landamatics to some 100 operations and job functions.

Allstate doesn't impose Landamatics, on the theory this could alienate managers and employees. But once results from the first 20 projects of the 1989 class began trickling in, there was no shortage of volunteers. At an Allstate claims office in California, training time was cut by 30%, or 195 hours, for each of 10 or more new hires per year. And a diagrammatic guide for selling car insurance to high-risk drivers is saving over $1 million (table, page 72)--enough to cover the costs of Landamatics to date.

As that effort indicates, Allstate is expanding the technique to higher-skill work--even management. "It's a natural for the cross-knowledge that managers need to compete in today's world," says Kiefer. "You can't be a one-discipline manager anymore." With the program entering its fourth year, Landamatics enjoys "stronger support than ever," says Glen L. Hansen, a 1989 graduate and a former senior sales manager. Since Kiefer's retirement, the Allstate Landamatics Center reports to Allstate Chairman Wayne E. Hedien.

Now, Allstate is considering a venture with Landa to market the concept elsewhere, perhaps even to schools. "If we get Landamatics down pat," says Kiefer, "it could give an enormous boost to the whole educational process. That's its real potential--because America's got to improve education to stay competitive."

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