Business leaders, managers and owners are often conflicted when making decisions on whether to and how much to spend on developing their people. A key concern is whether their decisions to invest in training their people will give them an appropriate return for the business. Research conducted by McKinsey & Co underlines why they can be hesitant to invest with only 25% of business leaders surveyed believing that training measurably improves employee performance.
The fact is that, in today’s fast changing business world, if you’re not investing appropriately in your people (and the business), particularly to address emerging trends, meet needs, and to address capability gaps, then in all likelihood, your business will be going backwards.
So, what can and should be done to assist, support and ensure that any decision to invest in training is the right one for your business and how can you ensure that your learning strategy is aligned to your corporate strategy?
In this article, I outline the 3 critical steps that, if followed, will ensure that your learning strategy is aligned with your corporate strategy and should achieve an appropriate return on your investment in people development.
The 3 critical steps are:
1. Establishing a joint accountability between business leaders and the specialist learning and development (L&D) function to achieve the organisation’s objectives
2. Developing a scorecard containing multiple and appropriate measures to track performance
3. Tracking the progress of the L&D plan in supporting the achievement of the business’s objectives
In the book, “The Oz Principle”, the authors, Craig Hickman, Tom Smith and Roger Connors, assert that “When everyone is accountable for achieving organisational results, and not just doing their job, the right things tend to happen.”
In a nutshell, what Hickman, Smith and Connors are referring to is joint (or collective) accountability. In the context of the organisation’s L&D strategy, where an organisation is of sufficient scale to have a specialist L&D function, joint accountability means co-ownership of the organisation’s objectives as they relate to the L&D plan. It means that business leaders and the Head of L&D are mutually dependent on each other.
From a practical perspective, this means that the Head of L&D will be an active participant in meetings and workshops relating to the development of the business (or business unit) strategy to ensure that they gain a deep and clear understanding of the business’s objectives and what they are seeking to achieve from its capability building program.
And, it also means that, even though the L&D plan will, in the main, be developed and delivered by the L&D team, all aspects of the plan require the active involvement of business leaders. This includes, active involvement in:
• Setting specific business objectives
• Defining the specific needs of the business
• Identifying the organisation’s capability gaps that need to be addressed
• Considering and agreeing the investment to be made
• Determining who needs to be developed and when
• Agreeing the most appropriate development/training delivery mechanisms
Once the L&D plan has been developed and agreed, business leaders must remain actively involved in the implementation of the plan. This includes:
• Opening new courses and articulating to their participating team members the business objectives that the training has been designed to achieve
• Checking in on how the training is progressing
• Closing courses and encouraging their participating team members to use their new found skills when they return to the day-to-day roles and to provide feedback on what they liked, what they’ve learnt and what could be improved
As the famous management consultant and educator, Peter Drucker, often said: “What gets measured, gets managed.”
The second critical step to ensure alignment of the L&D strategy with the corporate strategy is to determine the most appropriate measures to track performance. The challenge here is that the task of measuring and assessing the effectiveness of training and the L&D plan (as a whole) is not an easy one. This is due to the fact that there isn’t necessarily an immediate causal relationship between training interventions and individual and overall business performance.
As a result, businesses sometimes default to creating measures that are just too simplistic (eg. number and percentage of people trained by department and region, hours of training per employee per year, completion rates by course, completion rates on time, cost per training hour, average evaluation ratings per participant) to track performance effectively.
While all the above measures do provide some useful information, none of them provide sufficient meaningful and relevant information to assess whether there is an appropriate return on the business’s L&D investment.
Numerous models have been developed over the years to try and assist business leaders to evaluate the effectiveness of their L&D interventions and their L&D plan as a whole. The model most widely used is the Kirkpatrick model as enhanced by Jack Philips. Under this model, evaluations are undertaken at 5 levels:
Level 1 – Reaction
Evaluation is based on survey type feedback from trainees at the end of each training intervention. Level 1 evaluations are the most simplistic with the survey asking questions such as: Did you enjoy the training? Was the training worthwhile? Did the training meet your expectations?
Level 2 – Learning
Evaluation is based on a test that measures the trainee’s work pre and post training so as to demonstrate that trainees have mastered a particular skill or knowledge from the training undertaken
Level 3 – Behaviours
Evaluation is based on 360-degree review assessments on the degree to which the trainee’s behaviour has changed as a result of the training undertaken
Level 4 – Results
Evaluation is based on tangible and measurable changes to specific business outcomes with efforts made to relate the changes to the impact of the training intervention by using forecasting models, trend line analyses and control groups
Level 5 – Return on Investment
Evaluation brings in the cost of the training and calculates the actual return of the training investment
Clearly, evaluations become more complex, require more effort and take more time to complete as you progress through the levels from Level 1 to Level 5. However, organisations that have the greatest success in aligning their L&D strategies with their business strategies are the ones that are able to consistently measure effectiveness across all levels. Organisations that do this, typically create L&D scorecards containing measures across each of the 5 levels. And, the best way to do this is to create a comprehensive scorecard that contains multiple and appropriate measures to track performance.
In keeping with joint accountability and co-ownership of the L&D plan, the final step in the alignment process is to for business leaders and their L&D counterparts to meet to regularly review the scorecard and track how the L&D plan is progressing towards achievement of the agreed business objectives.
As with all plans, if anything isn’t tracking as intended, this needs to be discussed on a timely basis and, where change or refinement is required, jointly consider options and agree actions on next steps and the way forward. These regular review meetings between business leaders and their L&D counterparts are also opportunities to discuss and new needs that may be emerging due to evolving trends in the market and to build these into the L&D plan as necessary.
So, in summary, to ensure that you get an appropriate return on any investment you make in developing your people, it is critical:
• To ensure that your L&D strategy supports and aligns with your corporate strategy and business objectives
• (If your organisation is of sufficient scale to have a specialist L&D function), to establish a joint accountability between business leaders and the specialist L&D function to achieve the organisation’s objectives
• To develop a scorecard containing multiple and appropriate measures to track performance
• To track the progress of the L&D plan in supporting the achievement of the business’s objectives
If you’d like to discuss how we can help to support you with facilitating and structuring your strategic planning needs, please get in touch.
Strategy, Change Leadership and Business Transformation Specialist
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