Learning and development (L&D) managers must be able to translate how learning efforts relate to business expectations. If you expect to build credibility within your organization, then it is time to start showing your business credentials.
L&D managers often ask, “What do we need to know?” Less than actually going back to obtaining a business degree, identifying the most relevant business topics relating to learning is overwhelming and, at times, intimidating.
Your role is not to become a business expert, but a learning expert. But to effectively interact with the needs of your organization, you must be business literate or, as we like to say, business savvy. The good news is that you are not alone. Others in various internal business activities face the same challenge.
While there are a myriad of business topics to know, let’s focus on the ones that you must know and apply quickly.
Don’t panic. Being strategic is actually good news for L&D. Why? Your company mission is the one thing that matters most to leadership. Everything operationally drives to achieving the mission. Be aware of this when interacting with business leaders, but especially as you move up the hierarchy. There are two reasons for being strategically aware:
1) Strategy is how your organization achieves its mission. The path for every work/job objective will (must) eventually contribute to achieving it. It is easy to conclude, then, why leaders preoccupy themselves with strategy.
2) The mission is your learning strategy “cheat sheet.” An explicit mission provides insight to the priority business activities. Essentially, your leaders are giving you the answers on what business areas they expect to see performance improve.
Most of your budget and efforts should investigate a) the areas of improvement within each business area, and b) how your contributions will improve employee performance. This will help you to effectively allocate resources to business areas that drive operational growth. Focus on the mission and you will not go wrong.
Every organization, even non-profit ones, is under tremendous pressure to produce positive financial results. For leaders, it is about stakeholder “accountability” or how your efforts contribute to helping primary business activities achieve profitability.
In recent years, many L&D methodologies have attempted to financially account (or measure) training’s impact. But business leaders don’t expect training to have a direct financial correlation with financial results.
First, leaders see training as a cost center. This doesn’t mean L&D is less important. It means that training, as with other internal business roles, support profit-center activities. Cost centers are accountable. The difference is that training (a cost center) must demonstrate improving profit-center performance.
Second, training is an expense. Leaders will never see this differently. Let’s get into their heads (hint, it’s from an accounting context). Training occurs for a specific period and results from future periods can’t be proven tangibly.
Think of it this way: A training activity is similar to how leaders treat marketing efforts (another cost center). Like training, when marketing conducts an advertising campaign, sales increase for the specific advertising period. Naturally, sales will also occur post the advertising campaign but how to prove this? You can’t. It is the same for training.
It is often assumed that leaders equate “expensing” training with the validity of the learning effort. This is false. Intuitively, leaders recognize that past training efforts contribute to future improvements. This is not the same as how they want you to account for it financially.
There is one exception to the “training seen as an expense” rule. In recent years, technologies in L&D grew significantly. Leaders consider purchases for LMS’, e-learning hardware/software, laptops, tablets, etc. as capital investments.
They evaluate theses types of purchases by how they will contribute to long-term growth. Capital investments do not contribute directly to profitability but act as “tools” to facilitate it. Think of it this way: Evaluate an LMS investment in the same manner leaders evaluate constructing a building or purchasing equipment.
A former boss taught us to “sell what people want; not what you want to sell.” Sage advice in business and life (trust us, try it with your spouse). In L&D, we try too hard to convince internal buyers (leaders and employees) why training will work and what it will do rather than what they expect as business outcomes.
Why do so many worthy L&D initiatives fail? It is the same reason as why so many of the best products no longer exist (remember Betamax?). People want to convince other people that their solution is substantial. But what buyers want is a solution to their problem, not how good your solution works. Those in L&D call this Level 4 evaluation or business impact.
Essentially, accounting doesn’t tell leaders how well they create financial statements. Marketing doesn’t shout about the nuances of campaigns. Production doesn’t insist on showing how products are made. So, why does training insist on explaining learning methodologies to achieving training results? Just show business (Level 4) results. Your leaders don’t need or want to know the details unless they ask.
For some reason, L&D managers believe that business leaders focus solely on financial results. Yes, leaders concern themselves with financial performance, but they also recognize what it takes to drive strong financial results. And that is by building effective internal processes that leverage knowledge and the capability of employees.
L&D managers must show their business acumen. Identify your leaders’ business objectives, align and work with other internal business activities, and focus on integrative learning solutions rather than proving the methodology. It’s time for L&D to be seen as an operational business partner rather than a functional after-thought.