Consider this example:
You’re a learning content provider with another awesome training idea. You’ve put lots of thought into the content itself, the design of the program and materials, how it should be delivered and all of the wonderful results the business should see afterwards. You pitch it to the business leaders and once again, you receive pushback. They seem not to understand what a homerun this can be and after you’ve responded to all of their questions, they allow you to deliver a scaled-back version of what you envisioned but expect the same results. What went wrong?
One problem could be that you were speaking the wrong language. Learning leaders and executive stakeholders sometimes can communicate differently. Learning leaders understand that behavior change can drive business results, but it takes some time. Most leaders understand that time is money, and they are well aware of the costs of taking people out of production. So when the learning leaders paint this rosy picture of smile sheets that may drive behavioral changes, the operations leaders are still left asking, “How will this make our business perform better?” Even senior learning leaders are quick to boast about an improvement in performance when they are asked about the return on the investment (ROI), but training impact measurements are not the same as ROI.
Most learning leaders are familiar with Kirkpatrick’s 4 Levels of Training Evaluation and are eager to speak about all of the evaluations that they perform pre- and post-training to show just how effective their training program was. Some learning leaders are even savvy enough to package their results into charts and graphs that make it easier for leaders to track improvements. What learning leaders often fail to do is communicate how training impact translates to business results, and how those business results translate to increased profits or lowered costs.
In many cases, leadership is mostly concerned about the financial benefit of training. And if training’s impact on the bottom line is not effectively communicated, leadership can be left making decisions based on a predetermined amount, carved out into a training budget that only exists to prove that the organization is “committed to the development of its employees.” In order to convince leadership that the proposed learning initiative is “worth it,” learning leaders need to speak the language of their stakeholders. When they can confidently do this, they will realize increased interested in, and acceptance of, their training ideas.
Though there is a correlation between the impact of training and training ROI, they are not synonymous. While the impact of training can be communicated in many ways and tied to several business metrics, ROI, in its simplest form is calculated using this formula:
ROI (%) = [(Monetary benefits – Training Costs)]/Training Costs x 100
Though there are models that dive deeper into the relationship between factors by industry standards, measures of learning and development (L&D), and other metrics resulting in tangible ROI, this simple model opens the door that allows learning leaders to communicate more effectively with other stakeholders.
A communication gap that exists when learning leaders discuss ROI is a misalignment between each group’s interpretations of the return (R) and the investments (I). If a learning leader wants to effectively communicate the ROI of training, there must be alignment on what other teams need out of the learning initiative (outputs or returns) and what resources will be needed in order to execute the initiatives (inputs or investments). Another consideration that needs to be made in this process is who are the returns for and what have they invested?
In most instances, the business is being asked to make an investment and as a result, they expect a return. But what about L&D’s investment and its desired return? Learners’ expectations and investment in learning can also be overlooked as well. If there is not clarity about the breadth of the investments, then it is impossible to forecast the returns or whether the returns are worth the investments for everyone involved.
So what are the steps to achieving the necessary alignment that would improve the adoption of your learning initiatives? Let’s take a look at five steps to proving training’s ROI.
- Conduct a learning needs analysis. A learning needs analysis is an When possible, speak with stakeholders, internal and external customers and subject matter experts to gain perspectives from impacted groups. Seek to understand the problem and the audience. A learning needs analysis should help you identify the desired business outcomes and the trainable behaviors that drive them. In this step, identify the benefits of addressing the root causes of the problems and begin to monetize them when possible (e.g., if the solution can reduce production times by 2% and that equates to $1,000, what does the company gain by implementing a solution?).
- Develop a training solution. This may include off-the-shelf content or a custom-developed solution. Ensure that the learning objectives are developed to support business objectives. Just because a session may be “cool” to learners doesn’t mean that organizational leaders will feel the same. This does not necessarily mean you have to start from scratch. Just be sure to place emphasis on the topics and outcomes that align with business objectives. In this step, determine the costs associated with development and delivery of the training solution.
- Communicate a detailed training plan. This is your opportunity to demonstrate your commitment to partnering with all stakeholders to drive the results that are relevant to them. Set SMART goals and communicate the returns in terms that validate your understanding. Speak the language of the business and be prepared to address their concerns. In this step, you can forecast results to ensure that the desired investments align. Be thorough and open to negotiation. In this phase, you should also be prepared to communicate any investments that go beyond the training event itself.
- Carry out your training plan and adapt as needed. This is the phase in which, as a learning professional, you may already know how to do. Keep notes about your observations during this phase.
- A debrief of the process is just as important as the debrief of a meeting or a classroom activity. Communicate your successes, opportunities and any observations that you made during the process. This is your opportunity to demonstrate your commitment to the success of the organization, not just to the success of the learning initiative. Many internal and external training content providers neglect to follow up after the initiative has been executed. In this phase, stakeholders and training providers can measure and compare training’s impact to business results. Take the time to understand any real correlations that can be drawn and take credit where credit is due.
Training managers have to look beyond solely measuring training’s impact in order to truly understand their training ROI. The language disparity between L&D and the rest of the organization has always been a common challenge. When learning leaders want to pitch their ideas to stakeholders and leadership, they will find the most success when they learn to speak the same language.
Learning impact measurements do not equal ROI and the use of fancy L&D language can be insulting to other stakeholders when you make the assumption that they do not know better. As Peter Drucker famously stated: “You can’t manage what you can’t measure.” If you take the time to measure the true ROI of your learning programs, you can position yourself as a true stakeholder in the business’ success, poised to claim your rightful seat at the table.