Medill Reports Chicago profiles NogginLabs
31 October 2007
Some of the largest corporations in the world are turning to a small Chicago based software developer to teach their employees a few simple things: everything. NogginLabs is quickly making a name for itself among the likes of Dell Inc, Walgreens Co, and McDonald’s Corp. by developing innovative e-learning programs that are making an immediate impact on the businesses that implement them. By blending creativity with a customer-first attitude, the business has grown quickly in the last few years. After a 2006 that saw $2.4 million in revenue, 2007 is projected to be the most profitable for the company yet with revenues reaching $4 million. Staff has grown as well, with 10 new employees being added this year alone. Growth has normally been limited to 4 or 5 new people each year, but business demands have created the need to expand the office population with writers, programmers, graphic designers, and project managers to a total of 38.
NogginLabs has developed a unique approach to creating corporate training programs: “Do what people do,” says founder and CEO Brian Knudson, 36, who co-owns the business with his wife, Traci, 36, the chief financial officer. This “story driven learning” replaces long dry technical manuals and expensive instructor-led classes with interactive computer based programs that train people on a wide array of skills. Any corporate message can be conveyed in this way, from harassment policy to banking systems. Even psychological research training has been improved with help from NogginLabs. Behavioral Tech Research Inc., a Seattle-based psychology research group now uses a simulation program that trains psychologists to teat patients with borderline personality disorders. Recently the company designed a sales training program for Abbott Laboratories which included professional actors portraying doctors in a simulated sales call. “You have to interact with that doctor, and if you make him mad, he’ll walk out on you,” Knudson said.
Inc.com has named the 10-year-old company one of the 5,000 fastest-growing private companies in the nation, with over 170% revenue growth from 2003 to 2006. NogginLabs has also won recognition from those within the e-learning industry including the Excellence in Learning Awards for its work with Abbott Laboratories, McDonald’s, JetBlue Airways Corp. and Hibernia Corp. Knudson attributes the company’s success to years spent building expertise in the industry. Many competitors have changed over time from large consulting firms to small dot-com start-ups to interactive media companies. NogginLabs from the very beginning strives to be the best and to build customer trust.
Long-time customer Robert Baer of Capital One Financial Corp. in New Orleans has always been more than satisfied with the quality of work he has received from NogginLabs. Where other e-learning companies specialize in only one industry, the NogginLabs team will bring in ideas from other verticals to help generate innovative ideas. The strategy, says Baer, “helps make everyone successful.” The new ideas have paid dividends; NogginLabs is now one of Capital One’s three preferred e-learning vendors.
Knudson says his background in learning science and organizational psychology helps in the design side of the training programs. His brainchild is the Instructional Genome, a software program that the project teams use to create the customized e-learning programs for clients. The content of the courses is developed through extensive research into a clients culture and management style. As a result, the teams get to know their clients very well, Knudson says. “We adjust to what they’re doing so it feels like they’re working with colleagues.” This approach has led to nearly all clients coming back for additional projects.
Another factor in the company’s growth has been the diversity of the clients. While 25 percent of the business is made up of contracts with the banking industry, NogginLabs knows that its important to service an array of sectors. “Unlike some organizations in our industry that might specialize,” Brian Knudson explained, “we went out of our way to make sure we have variety.” This strategic choice shields the company from uncertainty in other markets. Traci Knudson explains: “It helps, in terms of being a small business, to pass through a lot of changing markets without risking our business or the growth of our business. As things are really hot, we can benefit from that, but when they’re doing poorly, hopefully other parts of our portfolio are doing well.” When Hurricane Katrina cost the company a $600,000 contract, the diversity strategy proved worthwhile. “At the time, we were like, ‘God, if we hadn’t made other plans, that would really hurt,’” Traci said. She says that NogginLabs gains three to five new clients each year, mostly through word of mouth. The firm’s first client, Allstate Corp. led to Dell, which has since become one of the largest clients the company has. The work with Dell has led them to other large corporations including Gore-Tex maker W.L. Gore & Associates and Freescale Semiconductor Inc.
Brian Knudson says he is confident that NogginLabs can keep up with the demands while not loosing the culture that brought the success in the first place. “Traci and I have structured the business to be able to grow and scale. We’ve definitely proven that this year because we’re on time and on budget on everything.” What’s more, the company has built in expertise: “We’re advising senior executives at large organizations and saying ‘Here’s the impact that this change that you’re implementing is going to have. Here’s what we recommend you put together as a strategy.’ So we will do that with ourselves as well, to say ‘How can we keep people together and how can we also allow people to be autonomous?’” Foremost in his mind is the possibilities for the future growth of the company. “I’m excited because I do feel like we’re at this place now where we seem to have the opportunity on more and more projects to push the envelope even higher.”
