Designing for ROI - High-impact learning interventions

At the Learning & Development Summit by HRD Australia , I asked a crowd of 80 people to raise their hands if learning ROI is still part of the conversation in their organisations. Only 5 people raised their hands.

And when I asked the five – which of you are having success in these ROI conversations, only 2 kept their hands up.

Ok, looks like this is an area of opportunity.

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Or is it?

From an earlier panel discussion, Shawna Murray (Macquarie Group) and Gerry Marcus (Colliers) both started the ball rolling by suggesting that L&D can do more in finding clarity around the outcomes we seek and what are we really measuring from the programs we run. Game on!

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?And for context, ROI is nothing new – it has been around since the time I stepped into L&D. So, is it still relevant? I think it highly contextual – it might not be a priority for all, and there are many factors in play.

But I’m inclined to think – if you are struggling to justify the work of L&D to the business, then having ROI at the centre of learning is key to anchor the value proposition of your work as an L&D professional.

A disclaimer though, this isn’t a gold standard on learning ROI – if you want that, go sign up for a training with the pros; this is more of my take and sharing of lessons from my journey in talent development. And ROI may not be right for your organisation – if your leaders aren’t even asking for it OR prioritising it, why should you? Some food for thought, but we shall talk more about that …

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Issues we face in learning

There are still business leaders with antiquated perceptions of learning, but stop me if you’ve heard of these before:

·???????? I need another teambuilding session

·???????? I think my team needs this skill(s)

·???????? We have some leftover budget, so …

·???????? I’ve got this cool vendor proposal, can we proceed?

·???????? Oh, something happened, so let’s react to it

And if that doesn’t get you all cringed up, then how about these?

·???????? Just give me something, any training will do

·???????? Isn’t learning just training? What’s with the fancy language?

·???????? Not holding high standards for L&D people and vendors to deliver ROI from training

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Now, think of some recent training that you’ve run. Did you come across any of the issues below around the learner, content and/or impact?

And lastly, people tend to forget sometimes that when we send people for learning (or training they might say), it costs the organisation TWO things:

Do you ask yourself this question – was the learning worth the time and money?

Does the business ask you the same question? ??

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Talking about learning impact

As Ben Franklin can tell you from as far back as his time, telling and teaching someone isn’t enough, involvement is critical for true learning impact.

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The Kirkpatrick model for learning evaluation has been around for a while, but in many of the organisations that I’ve work in (or worked with as a consultant), many are still stuck at Level 1 and 2. Part of the problem here is that Australia is very assessments focused – which looks mostly at Level 2 and short term L3. But even for those who do L3 evaluation, the challenge is stretching L3 to be more embedded into culture/behaviour and sustainable. And it gets more challenging when you are working in very lean L&D teams or those with less experience.

Level 2 is the attainment of Skills and knowledge

Level 3 is the change in attitude

Competence is when we have all SKA in place:

Results is the ability to perform and that is dependent how the consistency of competence

And when Results are aligned with business goals, this will inevitably lead to ROI

Defining ROI – What is it?

ROI is simply defined as Return over Investment. The equation below will easily explain it:

And the issue with ROI is, if we don’t aim or plan for ROI then we simply can’t measure it.

And therefore, if we can’t measure it, sure as well that we can’t claim to have learning ROI. In simple terms, we need to define the desired Return and Investment in measurable forms.

When defining your ROI, it’s useful to have the four dimensions of scorecards/ KPI in mind, see below:

So let’s take an example of a financial scorecard item/KPI; say that digital marketing is a key initiative for your organisation where it’s aimed to bring in say, $10mil in revenue. And you may probably list out the number of variables that ae critical to achieve that, e.g., strategy, partnerships, etc. with learning being one of them too.

Ok, now for Learning attribution - So, amongst all the items identified, assign weightage on how important each are. Say in this example, your organisation assigned a 15% weightage on learning.

If your organisation achieves that goal, the Return (or Benefit) for learning is $1.5m.

Now, the costs for training say for example would be $250k for trainers and $150k for productivity loss.

So the calculations for ROI should be as follows:

Similarly, the same can be applied to other scorecard dimensions e.g., Customer, Internal Process or People. During the conference, I shared an example for learning related to reducing employee turnover.

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Designing for ROI

To ensure that we can measure training ROI, here are some tips for you to consider:

?Be clear on your ROI goals – what are the outcomes you want? How are these goals tied to the enterprise scorecard? How will it be measurable?

Clarity of what data we need – how will you collect it? How do you ensure that the data is valid?

Benchmarks available – if possible, and for credibility’s sake, seek to benchmark the outcome against the industry gold standards or from a profession perspective e.g. IT, accounting, engineering, etc.

Degree of learning attribution – we talked about it earlier, so please debate this with your stakeholders and get their signoff before you start on the design of your program. This is imperative.

Account for time to embed learning – consider the time required for people to apply learning and getting to the desired level of performance. And also, to sustain it. This can be anywhere from 3 to 12 months.

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Conversations with stakeholders

Chances are, your stakeholders may not have set such high standards for any form of ROI from learning. In your conversations with them, please consider the following:

?Are your learning outcomes strategically aligned with broader business goals? What can do to enable better alignment?

Does your program has a clear sponsor? Sponsorship by leadership is important to drive accountability, ownership and drive for any form of learning

Do you have clarity of the desired impact from the sponsor? Impact needs to be defined and agreed with the sponsor

Have you clarified on how impact will be measured? Ensure that outcomes and measures are discussed and endorsed by the sponsor

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As most of you know, learning in organisations broadly consist of On-the-job experience, informal learning, and formal learning on the ratio of 70:20:10. However, as I alluded to earlier, most leaders think of learning as just training which sits in the 10%.

Therefore, if we want true impact and ROI, learning needs a blend of 70:20:10 to enable application, so it’s important to think about what needs to happen after training to ensure application and sustainability.

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Lastly, it is also about cascading the message down to the L&D team directly. Ensure that all people involved (L&D, SME, vendors, instructional designers, etc.) are clear about:

In other words, we need to provide clarity and hold ourselves accountable with ROI as our own KPI.

I end with a quote from Leena Patel on ROI …

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