Chief Learning Officer - February 2008 - (Page 12)

business impact Obstacles to Measuring ROI Michael E. Echols, Ph.D. The very first question that emerges from these market results is that if measurement of impact is held as such a high priority, what’s stopping organizations from actually doing the work? For a few years now, Bob Lee of WebEx, Dennis Brown of SkillSoft and I have been traveling the country interacting with learning leaders in the Chief Learning Officer magazine Breakfast Club series. These discussions have largely focused on the business impact of learning. At these Breakfast Club meetings, which usually last more than two hours and have involved literally thousands of individuals in more than a dozen cities in the United States, we heard a lot about the real measurement challenges facing learning leaders. Obviously, measurement of the business impact of learning is a widely discussed topic in our industry. Pick up any learning publication, and you’ll probably find some variation of the statement that measuring impact is critical. Unfortunately, surveys that track how many organizations are actually measuring impact show very low results: Typically, between 5 percent and 20 percent of respondents answer affirmatively. The very first question that emerges from these market results is that if measurement of impact is held as such a high priority, what’s stopping organizations from actually doing the work? In a study released in October 2007 titled “Measuring Success, Aligning Learning Success with Business Success,” The eLearning Guild provided some valuable insights into the challenges learning leaders face based on a survey of 900 organization leaders. The report shows that while 20 percent of the respondents stated that they were able to measure what they wanted, only 10.9 percent have data that shows the measurement approach provides value to the organization. That same study further revealed what is blocking the measurements the vast majority of leaders say are so important to business. The two responses of greatest importance to this discussion were: 1. “Other priorities are more important” (40.4 percent). 2. “Lack of know-how, expertise” (31.2 percent). So how can there be such a wide gulf between what is almost universally agreed to be a high learning industry priority and the actual “state of the industry” as reflected in many learning surveys, including this one? The answer to this and related questions will be the heart of this column, as we explore not only what is, but also what can be. The challenges to actually measuring business impact from learning and development are real and substantive. Considerable energy has already been expended in the debate over ROI, with many of my friends in the industry taking a totally contrary position to the original assertion in the title of my first book, ROI on Human Capital Investment. In that book, I used real data with rigorous mathematical modeling to show the very attractive financial return to both the employee and employer resulting from securing a bachelor’s degree in the American economy. The work was rigorous and valid, as far as it went. The caveat is that it did not cover all human capital investments. There are many learning expenditures that do not involve a bachelor’s degree. Today, I am in the camp that holds ROI to be a business impact measurement that lies in the future, even though I firmly believe that we will eventually get there. Why I believe that to be the case is the subject for a later column. For now, it’s reasonable to simply address the barriers that block the measurement of business impact. As we wrap up this month’s column, I will leave you with the assertion that, contrary to the practice of many e-learning professionals, there are very few things in our global economy today that are more important than measuring the impact of learning and development expenditures, what I call “human capital investments.” February 2008 I www.clomedia.com I Chief Learning Officer 12 Michael E. Echols, Ph.D., is the vice president of strategic initiatives at Bellevue University. He is the author of ROI on Human Capital Investment. He can be reached at editor@clomedia.com. http://www.clomedia.com

Table of Contents Feed for the Digital Edition of Chief Learning Officer - February 2008

Chief Learning Officer - February 2008 Editor's Letter Table of Contents Business Impact Trends Best Practices Effectiveness Guest Editorial Learning Solutions Home Depot: Building Better Associates CLO Profile Environment Realizing the Vision of “One Philips” Tactics Sun Microsystems’ Next-Generation Worker Video Game Recruiting Tool Productivity The Regence Group: Blended Measurement Human Capital NASA: A Case Study in Technical Leadership Development Case Study Business Intelligence Advertisers' Index Editorial Resources In Conclusion

Chief Learning Officer - February 2008

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