How to Frame the Learning Discussion at Budget Time

Budget season is almost here at many organizations and that means learning leaders need to think about how to frame their case for next year’s budget. There are different approaches depending on what senior leaders expect

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from learning and how rigorous the budget process is.

In most organizations leaders expect (or at least hope) that their investment in learning will contribute to achieving some of their organizational goals. In some cases, learning may be absolutely essential to achieving the organization’s mission (e.g., the military). In most cases, however, organizations would survive (muddle through) without investing much (or anything) in learning. Employees would eventually learn how to do their job and some might even learn how to do it better or at lower cost.

So, most organizations don’t “have” to invest in learning, but they do. Why? There are several reasons.

First, leaders may believe that the right learning for the right employees can help achieve the organization’s goals more quickly and at lower cost. In other words, learning leads to higher productivity and lower overall costs. For example, sales training programs should equip the sales force to better sell the features and values in their products and services which will result in higher revenue, higher market share and higher profit.

Second, leaders may believe that their investment in learning will improve their competitive position in attracting and retaining the best talent. (Or, they may simply feel compelled to provide a minimum level of learning to attract and retain their existing quality of talent.)

Third, leaders may believe that investing in employee learning and development leads to higher employee engagement, which in turn leads to greater discretionary effort by employees as well as higher retention levels and an advantage in recruiting.

Last, some leaders may believe in investing in their employees simply because it is the right thing to do (whatever that means!). I would never advise basing your budget request on the last reason, although many L&D groups seem to do exactly this. They assume it is their “right” to have a budget and it should always be bigger. After all, we are talking about investing in people, the organization’s greatest asset, so no business case is needed, right? Just give us the money!

Even if your senior leaders believe this and are willing to give you whatever you request, I would strongly suggest an approach based on the assumption that your leaders believe in the first reason provided above, namely that learning will help them achieve the organization’s goals.

To make your case, carefully align learning initiatives to the key organization goals and secure agreement with senior leaders on the expected contribution or impact of learning on those goals. In short, build a business case for your learning investment and incorporate it in a business plan for learning.

And, if your leaders also believe in the second and third reasons above (talent and engagement), then build that into your business case as well for an even stronger argument. Your business case may be qualitative or quantitative, but at least you will have addressed your leaders’ reasons for investing in learning.

At a minimum you will have a great discussion about learning with your leaders and your organization will be much better for it.

About The Author:

David Vance is the former president of Caterpillar University, which he founded in 2001. Until his retirement in January 2007, he was responsible for ensuring that the right education, training and leadership were provided to achieve corporate goals and efficiently meet the learning needs of Caterpillar and dealer employees. Before this position, Vance was chief economist and manager of the business intelligence group at Caterpillar Inc., with responsibility for economic outlooks, sales forecasts, market research, competitive analysis and business information systems. He now consults with organizations on learning and performance issues.

Reprinted from Chief Learning Officer magazine

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