Learning Transformation Shift 3: From cost to business benefit
This is
probably the hardest of the three shifts, but also the most valuable because
business benefit directly counters cost. This shift is similar to the last one,
in that it concerns one factor that we understand very well, and one which we
hardly recognise at all.
In contrast, the business benefit of learning is rarely attempted: it is dismissed as being “too difficult” and when it is attempted, the values are considered rough estimates at best. Mostly we prefer to accept the vague assumption that learning does deliver business benefit, and don’t look too close in case we find that it doesn’t! And that’s not healthy.
So how can we move towards being more convinced of the business benefit of learning? Four ways:
1. Conduct a small number of
specific studies to assess the business benefit from a variety of different
learning programmes (different subject areas, different audiences, different
delivery modes – don’t bother with mandated programmes where the decision to
run them is not about business benefit). We find the best approach is to
interview a sample of learners for half an hour each, 3-6 months after the
programme and probe specifically for evidence of impact on the business. Over
time you will build up a library of hard evidence of business benefit, together
with an understanding of the mechanisms by which this comes about. This kind of
investigation is only practical for a small cross-section of your training,
however the techniques espoused by people like Donald Kirkpatrick, Jack
Phillips, Robert Brinkerhoff and others will help.
2. Use this evidence to estimate the
expected business benefit of training interventions before they take place.
Develop compelling stories using words and numbers to describe how and how much an
intervention will deliver business benefit. Remember you must be credible: do
not overstate the benefits; make sensible assumptions; be transparent; base
everything on evidence and fact.
3. Go for increased frequency of
estimates, over increased accuracy. The more you talk about business benefit,
the more people will get used to hearing it. And the more they hear it, the
more likely they are to accept it.
4. Be confident. That’s how
marketing get their budget approved. If the board can approve the marketing
budget based on expected payback of different promotional activity, then
L&D can do the same for learning spend, based on expected business benefit
of different types of learning activity.What it looks like
The overall aim is for all learning investment decisions to be made in the light of expected cost and business benefit. No learning should therefore happen unless there is some understanding of the likely business benefit and how it will be realised. More specific steps along the way include:
·
Demand planning. The planning of learning is conducted on an
organisation-wide basis. This has operational efficiencies quite apart from the
articulation of business benefit. Demand planning invariably starts life as a
budget-setting exercise, but as the business benefit of learning becomes better
understood, the character of demand planning changes. Ultimately learning is
prioritised according to its expected contribution to business benefit.
·
Management Information. Development of reporting that begins to roll up
the contribution of learning to business benefit for the whole organisation.
This includes numeric reporting of data, but also compilations of the narrative
evidence which has to be a more manual process. This may evolve into some kind
of dashboard equivalent which answers the question ‘what has learning done for
the organisation this month/quarter?’
·
Learning Governance. Over time a governance structure can develop. The
strategic decisions about learning priorities and learning investments tend to
be made by a Board of senior business leaders, in line with strategic business
goals. L&D or HR become responsible for executing the decisions made by the
Board.
·
L&D resourcing. The size and shape of the L&D team is
determined as much by their contribution to business benefit as their cost. The
division between internal resources and external service providers will change
as we understand where the value is greatest.
·
Talent Management. Finally we may even develop a view of talent
management that includes the increased valuation of employee skills resulting
from development activity.
Benefits
As a result of this shift, learning wins the support of senior management because it’s talking their language (and to be blunt, helping them get their bonuses).
·
Learning gets commissioned based on its expected contribution to
business benefit, rather than its cost. And further cost-cutting proposals can
be countered by a corresponding reduction in business benefit.
·
L&D has a yardstick against which to measure any incoming
requests: how will it make our organisation better?
·
This shift
gives L&D strategic direction that is linked tightly to business goals.
Here the benefit is not that we do stuff differently, rather that we do
different stuff. We only do the stuff that contributes to achieving strategic
business goals, everything else gets left behind.
Kevin Lovell
Learning Strategy Director
Kevin Lovell
Learning Strategy Director
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