Chief Learning Officer- September 2008

21,300 sales consultants received the training while 13,700 did not. The ﬁnal term in the equation is , or what is known in statistics as the “error term.” The important thing about the error term — and what makes a statistical analysis so critical to measuring value — is that it contains the total effect of “everything else.” While we may not know everything contributing to the error term, what we can measure is the cumulative, or aggregate, effect of all that other “stuff” going on. It is all captured in the error term. In statistical analyses, the conclusions about the strength of the relationship between intervention X and the dependent variable is relative to the size of the error term. In some cases, when the error term is especially large, it is impossible to say that the value created was a result of the learning intervention and not something else. In the Chrysler study, there was 99 percent certainty that the 15.6 incremental-vehicle impact was related to the training and not something else. This is a very powerful conclusion, one that empowers the learning organization and senior management to invest the needed resources to create the potential value. The last item on the executive priority list is innovation, an outcome critical to the survival of organizations in the 21st-century global economy. Wikipedia has an interesting approach to the innovation issue. The key concept of that deﬁnition of innovation is experimentation: “The essence of an experiment is to introduce a change in a system (the independent variable) and to study the effect of this change (the dependent variable).” All of this brings us to the goal of the discussion, namely the progression from costs to value. The essence of the conversation is that measuring value created is not only desired, but possible. What it will take is innovation on the part of the learning leaders. That innovation needs to take place in the form of a commitment of between 1 and 5 percent of learning resources to design and conduct experiments that address items 1 and 2 above. This namely derives a management consensus on outcomes and their value and analyzes the results of the experiments in terms of the statistical signiﬁcance of the intervention relative to everything else as captured in the error term. If we are able to accomplish this as a learning community, we will not only move beyond costs to value but also fulﬁll the charter to innovate. What could conceivably be more valuable in the end? CLO 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. transform experience into knowledge, and knowledge into peak performance. Our executive development programs are unlike others in that they use your experiences and the experiences of others to help you sustain a new level of professional performance. We call it Leveraging the Power of Experience. Learn more about this approach and ﬁnd a program to reach your performance peak at www.ExecDev.unc.edu Open Enrollment Programs • Executive Development Institute • Negotiation Skills for Eﬀective Managers • Leadership Eﬀectiveness Workshop • The Business of Human Resources • Financial Analysis for Non-Financial Managers • Women in Business: Transitioning to Leadership (New!) • Advanced Financial Decision-Making • Driving Proﬁtable Growth with Strategic Innovation (New!) http://www.ExecDev.unc.edu http://www.execdev.unc.edu http://www.execdev.unc.edu

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

Chief Learning Officer Editor’s Letter Contents Connections Imperatives Selling Up, Selling Down Strategies Take Five Lifestyle Learning: Improve the Bottom Line With Behavioral Education Tracom’s Social Style Model CLO Profile IOL: Determining the Impact of Learning Communicating With the Boss About Impact Mission Accomplished? Measuring Success of Corporate Universities Borrowing Measurement Practices From Investors Value Creation With Human Capital Investment Business Impact Analysis at Chrysler Learning or Performance Enhancement: Which Is It? Best Practices in Global Project Management Training Case Study Business Intelligence Advertisers’ Index Editorial Resources In Conclusion

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