Way back in April of 2010, I wrote this post about talking learning to business, where I basically posited that business doesn’t value learning, it values performance. I recently saw a wonderful presentation by ROI guru Jack Phillips at the Training 2011 conference that provided data to support that assumption. The bad news? Businesses really don’t value learning. The good news? Once we understand what business does value, we can take steps to provide it.
See, businesses don’t value learning any more than the driver of a car values gasoline. The driver of a car has a goal; he wants to get somewhere. He has a resource for getting there, the car. And in order for the car to take him where he wants to go, he puts gasoline in it. Having a full tank of gas is not a goal; getting somewhere is the goal, and the gasoline is the fuel that makes the car go, and allows the driver to get where he’s going.
So, too, do businesses want to get somewhere. And skills and knowledge are the fuel that power the people of the business and allow them to take the business where it needs to go. So it’s not too surprising that businesses don’t measure learning; they measure results.
Jack Phillips did a wonderful analysis. He asked the CEOs of dozens of big organizations (Fortune 500 and similarly-sized privately-held organizations), and asked a simple question: what are the metrics that matter to you around learning? Jack wrote a detailed article about it in CLO Magazine, so I won’t replicate all his findings here.
So what’s the net-net? Well, you might not be too surprised to learn:
- Most of the things learning organizations typically measure aren’t very important to top executives. For example, 63% of organizations reported they measured employee satisfaction with training, but CEOs rated that measure as last on their priority list.
- Only 4% reported measuring ROI on training, although 74% thought they should be measuring ROI. Most interestingly, ROI was not listed as a top priority. So what was?
- The number one priority for CEOs was this statement: “Our programs are driving our top five business measures in the organization.” Only 8% said they currently measure it. A whopping 96% said they should be.
What can we take away from all of this? Simply this: business values activity that brings them closer to their established goals. And, we might infer, is willing to invest money in activities that bring them closer to their goals.
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Interesting insights as learning organizations, now including school systems, are struggling with ways to measure outcomes. We all know learning and development are important, even critical to an organization’s success but are challenged to quantify the value, likely the reason T&D is often first to the chopping block when companies tighten their belts. I would argue that these are the times and opportunities for T&D to re-invent itself; to become part of a comprehensive organizational solution, not to mention improved morale and retention. Employees especially appreciate when their organization invests in mutual success.
The old saw in learning “what gets measured gets taught” is no less true now than ever. The prior respondent suggests that now is the time for T&D reinvention. No doubt we are ripening towards a tolerance to take action towards that goal. However, it must be a total commitment incorporating the grand changes that distributed, holistic technology will push forward on learning leaders and online (and ILT) designers and developers.
What I have found is more akin to your own authors discoveries. There is little taste for change unless performance will drive profitability. And prove it. But without metrics — as noted above — CXOs are loathe to — nor can they really — measure the connection or relationship between what is ‘covered’ in learning and what comes out the end of the pipe measured by ROI/IOB. In other words, did I get my monies worth.
What is needed, I suggest, is ‘line of sight’ metrics – a methodology, accepted as an industry standard (think SCORM) that would allow for easy (thus more likely to be executed) benchmarking of the affect learning inputs yield both in performance improvement and business success. http://bit.ly/gqtRvb
Lastly, it would be a grievous error to tie any assessment strategy to schools. The school world is a totally different animal — still searching through a jungle of improvement models to deliver learning to vastly disparate populations, demographies, social conditions, ad infinitum. We are years if ever, going to reach a democracy of education. A zillion guerrilla experiments where no one magic bullet will result in the renaissance of American education still mired in politics; local, state and national. The bodies of educational reformers litter the beaches of such noble experiments.
However, on the corporate side we already know how to work up learning since we operate in much more pristine and uniform environment. We may have bosses, but they are cheering for our success, too, rather than sniping from the sidelines (mostly).
So consider these points fi we are to turn learning into a business operation:
1. A acceptance and use of technology (thinking social media, tablet computing, collaboration) to incite a more dramatic delivery.
2. A benchmarking and evaluation method, universally accepted as the way to get a snapshot of whether inputs yield desired outputs.
3. Trust emanating from the top echelon that learning can not only affect corporate culture in a positive way, but with assurance that dollars spent to design and deliver education will change the dimensions of the bottom line.
So, what would be some ROI measurements around leadership development training? I know reduced turnover rates are a good measurement but with so many factors contributing to increased sales or cutting costs, how else would you measure ROI from training, especially with soft skills training?
Instead of trying to figure out what the appropriate measures should be, we should be asking our clients what successful learning (learning that transferred to the job) would look like. The burden shouldn’t be on us because we don’t know what’s really important to our clients. We don’t know what success will look like, but they do. We need to work with our clients and help them create the criteria that will indicate the training had an impact.
Keep in mind that this won’t always translate directly to dollars. There was a question above about Leadership Development. If we know that attrition dropped after creating a Leadership Development curriculum was created, we can make a reasonable inference that the new Curriculum contributed to the reduction in attrition. What is that reduction in attrition worth to the company? It’s reasonable for Training to claim some of the credit though it will be hard to determine exactly how much and what that means in terms of dollars saved.