Wikipedia tells us, on the episode's page:
None of the gnomes actually know what the second phase is, and all of them assume that someone else within the organization does.
I regret not wearing a t-shirt with that three-step plan on it every time I read something about English education, like in my last post for example. The clip from whence the above screen capture came is available here.
Jesus Fucking Christ why on earth do they need to shout across the office about something so lackluster as the class schedule? Mercifully the weekend is here.