If you don’t know if what you are doing is working, then what’s the point in doing it at all?
This question has been bubbling under the surface of workplace training for a long, long time. Nevertheless, organizations have continued to deliver training. Of course, providing employees with the support they need to do their best work every day is the right thing to do. Development opportunities are a key driver of employee engagement. Plus, there is no shortage of company stakeholders requesting training from the learning and development (L&D) team.
Then, why do L&D professionals cite limited budgets as a primary reason they can’t improve their practices? Why is L&D stuck watching other departments introduce cutting-edge tools while they’re stuck with antiquated, unworkable technology? And why is L&D one of the first departments cut when times are tough?
The answer: It’s because departments like sales, marketing and information technology (IT) can answer the big question. They can quantify their value to the organization and, therefore, can build the business case for continued investment. L&D cannot. In fact, fewer than 20% of companies say they are “highly effective” at learning measurement. As long as L&D cannot determine its impact on business results, its value to the organization will be questioned.
A Growing Priority
L&D must fix this measurement problem to move the industry forward. Thankfully, all signs indicate that more organizations are making it a priority. According to LEO Learning’s report “Measuring the Business Impact of Learning in 2020,” 90% of L&D professionals want to show business impact, and — even better — 90% believe it’s possible to do it.
However, there are some major obstacles in the way. L&D teams often struggle to gain buy-in or to collect and access the right data, but the biggest challenge is figuring out how to start addressing this foundational, decades-old problem.
Once again, the answer relates to another department: marketing. A traditional L&D team is a lot like pre-2000s marketing teams, who relied heavily on impressions. They made educated guesses about billboard and print ad placement in order to put their products in front of as many people as possible. Then, if sales increased, they assumed the ads were effective.
The marketing industry has not improved its ability to measure the impact of billboards over the past 20 years. Instead, it took advantage of new technology — the internet — and adopted data-rich tactics that helped it solve its measurement problem. Today, digital marketing helps organizations determine the impact of every campaign in nuanced ways.
L&D cannot just fix measurement. First, we must adapt the way we support employees by applying data-rich practices such as microlearning, adaptive learning and performance support, which embed the learning experience into the everyday workflow and result in greater data volume, value, velocity and veracity. L&D can then integrate this expanded data with key performance indicators (KPIs) to identify the connection between learning and business results.
The Business Impact of Training
Once they have the right data, L&D leaders can ask a new question: How much does training really impact business results? The answer: A lot more than they may expect! In fact, recent Axonify research found that training has an average business impact of 29%. In other words, if you took away training, you’d experience a 29% hit to the metrics that matter most to your business.
There are plenty of non-training factors that influence business performance, including marketing promotions, product launches and process changes. But 29% impact is huge for L&D. For example, if your company sold $50 million worth of product last quarter, you could estimate that $14.5 million was the result of training. That calculation is how you can reaffirm the value of L&D and build a business case for additional investment.
Establishing the value of L&D is just the beginning when it comes to the importance of impact measurement. When L&D can determine what does and does not work, we can proactively improve our tactics on the fly. We can also leverage this data to personalize and adapt the learning experience based on proven results, not just consumption data. Finally, this level of insight will help our stakeholders recognize the importance of learning within an agile organization. They will view L&D as a strategic revenue-enabler rather than a slow-moving cost center.
After all, what executive in their right mind would ever cut 29% of business results?