Make Learning and Development Go Cha-Ching

By Justin Wasserman

For some, an impassioned debate continues to swirl around whether businesses take leadership and development seriously.

Discussions have evolved beyond, “Was our training program well-attended, informative and referral worthy?” but questions remain about how well-aligned learning activities are with overall business objectives — and how effective they really are.

Proponents of strong program evaluation argue that learning goals must be aligned with key performance indicators, or KPIs.

Yet, most research in this area focuses on distant relationships or correlations derived from multivariant statistical analyses, survey results and a host of other metrics designed to link learning initiatives and business results.

While alignment with business KPIs is critical, the learning community must take the next step by adopting business KPIs as their own.

This position misses the mark on the true measure of success for learning and development. It also begs some important questions: How can we convert the learning function from a cost to a profit center and become a valued strategic partner in the business?

How can learning and development adopt business metrics such as profitability, top-line revenue growth and bottom-line improvements instead of simply measuring correlations?

Step 1: Reverse Learning Investment Logic to Avoid the ‘Field of Dreams’

Traditionally, businesses make multiple leaps of faith when allocating resources to build leadership and organizational capability.

Paraphrasing the popular phrase in the 1989 film “Field of Dreams,” the “if we build it, they will come” approach assumes that if learning leaders develop a great program, bring in faculty and deliver it well, capability and results will follow.

However, this logic is flawed and fraught with risks.

First, the traditional learning and development approach assumes businesses know and understand what new knowledge and behaviors are required to succeed in the future.

Despite often-numerous “unknown unknowns” in an emergent business strategy — such as untested business models, fluctuating market forces, regulatory changes, shifting customer preferences and unfamiliar markets — static competency models force businesses to act like they have all the answers about the knowledge and behaviors they’re working to develop.

The second assumption is made when leaders believe the function’s investment translates directly to delivering the desired knowledge and behavior change, expecting what is “learned in the classroom” will convert to deeper understanding and knowledge applied on the job.

The final leap of faith occurs when leaders assume new knowledge and behavior changes will produce stronger results.

When the learning and development investment logic chain is reversed, program designers begin with the end in mind and start by asking questions such as, “How can we help our leaders achieve critical results in the near-term, which will force and reinforce changes in behavior and knowledge in the long term? What are the intended business and operational results of developing a particular competency?”

The answers sharpen learning strategies as well as overall business strategies.

Step 2: Move From Action Learning to Results Learning

Most active learning curricula fail to distinguish between completion of well-intentioned activities or milestones and achieving business results.

Emphasis is generally placed on bringing leaders together to work on real business challenges, develop improvement strategies and present recommendations to senior leadership.

But these efforts stop just shy of implementation. Important linkages between learning, capability building and results achievement are severed, and leaders lose the opportunity to determine what it really takes to deliver results in the appropriate organizational context, which could include political dynamics, psychological issues or any barriers to change.

In contrast, some might advocate that “results-fueled” learning and development efforts hold leaders accountable for achieving stretch business results with program participants selected through a variety of methods, such as a cohort model, a business need or skill development area.

When Matthias Bellmann, president of Board Practice Partners, a German consulting firm, took over the learning function at Siemens, an engineering and electronics conglomerate, the company was a siloed organization with an engineering-oriented skill base.

The challenge: to develop the next generation of global leaders. The company had a solid core-learning program, but it needed ways to ensure new learning translated into stronger business performance.

“We realized changing people’s behavior is less about intellectual learning than it is about blasting them loose from nearly impenetrable, self-imposed and often company-rewarded boundaries,” Bellmann said. “We learned L&D can spend months developing the right dashboard and KPIs, and still have zero impact on the business.”

Bellmann, along with Schaffer Consulting, worked to design and commission several business impact projects to tackle Siemens’ strategic cost-cutting learning priority. Cross-functional teams composed of program participants were launched globally, and each was focused on opportunities to cut business cost. In the first year, the teams saved $12 million.

Establishing an effective experiential learning component alone is insufficient. It must be an integral part of overall learning design infused with traditional assessment, classroom and results learning.

Weighing the merits of traditional classroom work vs. results-fueled learning, the dilemma shouldn’t be choosing one approach over another, but how to jointly create the best outcomes.

“CLOs often try to establish effective action learning in a disjointed approach. Rather than one cohesive learning process, action learning is positioned as a competing approach. This is a major mistake,” Bellmann said.

The precursor to shifting learning and development from a cost to profit center is to start by translating broad leadership descriptions or aspirations into desired business results.

But translating desired learning, capability and business outcomes should not be the sole responsibility for learning professionals.

Top leaders must own and engage in the process and be convinced that their learning and development partners have a reasonable approach to improve business.

“My experience is that L&D professionals shy away from the complexity of measuring the ROI on training,” said Kate Hyatt, director of global talent management and organizational development at office-supply retailer Staples. “But if they don’t do it, they risk rendering their role insignificant.

One place to start is by helping their organizations to reduce their corporate objectives to just a small handful and then ask the question: Is our current learning strategy furthering those objectives in a meaningful way?”

Embedding leadership development in strategic business priorities allows learning and development professionals to finally stop asking, “Are our learning activities aligned with the business?” and start asking, “How do we have an impact on the bottom-line — and how big can it be?”

By demonstrating true return on investment, learning and development can reposition itself as a strategic business partner that adds value and drives growth.

Justin Wasserman is a partner at Schaffer Consulting. Reprinted from Chief Learning Officer

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