Last year, organizational behavior scientist and author Tom Peters told the Knowledge at Wharton podcast “It is more important than ever to train people … I call training ‘investment number one.’ I believe it entirely. Differentiation is always possible — in a six-person organization, or in a 60,000-person organization.”
Even though training should be “investment number one,” and enterprise training spend exceeds $300 billion globally, few learning and development (L&D) functions have a plan for how they will meet business goals. Even fewer organizations evaluate their progress against their strategic goals.
In fact, few senior executives can answer the question, “How much are you spending on training?” Even fewer can answer, “What value are you gaining from your training investment?”
Running training like a business helps L&D organizations generate clear business value through everything they do. It means a transformation from a sluggish cost center to an agile, valuable and flexible cost service that internal customers gladly pay for. It means understanding that line executives are training’s customers, and their needs and goals must be the top priority. It means applying the same high standards to training — both in how it operates and what it produces for customers — that apply to manufacturing, sales and other disciplines.
Running training like a business deliberately and immediately reconnects training to core business objectives, creating a training organization that:
- Focuses on meeting business needs, not just on conveying content.
- Measures success by its customers’ success.
- Operates on a variable-cost basis, where the customer pays for use.
- Achieves a high level of operational efficiency.
- Never stops improving.
Forward-thinking companies have reinvented their training organizations around the concept of running training like a business — and they have tangible successes to show for it. These corporations now know what they are spending on training and what that investment yields.
While running training like a business may not be easy, the view is worth the climb. Organizations can start their journey with a short self-assessment of where they are today. This self-assessment measures an organization’s learning and development capability maturity on 11 key factors:
- Business linkage
- Measurable impact/return on investment (ROI)
- Pay for use
- Learning resources
- Access and service
- Operational excellence
- Competitive advantage
The assessment then scores the L&D organization on these key factors, giving them a starting point to understand their strengths and weaknesses and prioritize improvements.