Training Industry Quarterly - Summer 2008 - (Page 25)

The Value of Learning very business department is being challenged to demonstrate value contributed from the investment being made. Global competition dictates nothing less. Learning is no exception. The challenge for learning and training providers is to demonstrate value as an integral part of any learning investment proposal made to upper management. This requirement applies to both proposals made by the internal training organization as well as proposals submitted by external third party providers retained on a contractual basis. Everyone is being challenged to document the value created. The key question is: “What will it take for learning and training professionals to deliver against the value demonstration requirements being demanded by senior executives?” The answer is rather simple. The execution is much more difficult. Many times management asks to measure business impacts that are extremely difficult to measure – sort of a perspective from 50,000 feet. The challenge for the learning executive is to bring the executive request down to a more manageable level. What Business Outcomes Should Be Measured? Unfortunately there is a major disconnect between what senior management is asking for and what is practical to measure. The comments that I hear from executive leaders are that they want “game changing” actions that can respond to the change they are seeing in technology and global markets. Words like change management, leadership and innovation dominate executive communications. While these might be the broad desire of the senior leaders, the challenge for all parts of the organization, including the senior executives themselves, is to translate these broad mandates into specific, measurable actions. The execution challenge is to define E business outcomes that can be measured and contribute to the broad mandates of the executive suite. Measuring Impact Take innovation for example. There are no documented best practices when it comes to the measurement of the impact of innovation. In fact, a task force of business and academic leaders stated in a January 2008 report to the Secretary of Commerce that impact measurements relating innovation directly to outcomes do not currently exist. The task force identified the development of such methods as a high priority for national policy (see side bar for specific references). So one of the first challenges in deciding what business outcome(s) to measure is to get senior management to agree on what to measure. The challenge is to get them to align around some intermediate business impact parameters that are indeed measurable. In the case of innovation, these might be measurements that contribute to innovation rather than direct measurement of the impact of innovation itself. Case in Point There are examples of such intermediate measurements that are being made today by real organizations. These are all cases where senior management agreement was gained on the approach used. At Halliburton, an engineering company that operates in the harsh business environment of oil exploration and production, the business priorities to be measured are not intuitively obvious. However, the outcomes of importance to Halliburton leaders are clear and are communicated throughout the organization. They are: Employee Engagement Customer Satisfaction ■ Cash Flow ■ ■ It is not at all obvious that this hardnosed engineering company would be so focused on employee engagement – a business outcome some might view as soft. The key insight is that it is not what others might think about the key business outcomes. What is important is what senior Halliburton management deems important to business performance. While it might not work for other companies, Halliburton has hard evidence that employee engagement is critical to financial and market performance. They measure it and they link leadership development programs to the impact of those programs on the employee engagement index management views as important. In another example, research done at the Bellevue University Human Capital Lab, in conjunction with Capital Analytics, found a link between mentoring programs and employee performance at Sun Microsystems. As in the Halliburton example, the initial reaction might be that mentoring programs are soft interventions, something not inherently measurable. At Sun Microsystems, a key step in the research was to relate mentoring to measurable performance improvement agreed to by Sun’s senior management. In this case, the metrics included rate of promotion, rate of salary increases and bonuses. The hypothesis was that those mentored would get more rapid increases in compensation and promotion as a result of the mentoring activity. Not only were mentored employees shown to have higher performance than the control group on the agreed-to business outcomes, the mentees were shown to have similar superior performance. Sun Microsystems senior managers were aligned around the business outcome measurements based on compensation and promotion. In these two cases, measuring business impact of learning interventions is not a refined science where universal “best practices” exist. There is no off-the-shelf solution for organizations to merely plug into 25 Training Industry Quarterly, Spring 2008 / A Training Industry, Inc. ezine / www.trainingindustry.com/TIQ Summer 2008 / A Training Industry, Inc. ezine / www.trainingindustry.com/TIQ http://www.trainingindustry.com/TIQ

Table of Contents Feed for the Digital Edition of Training Industry Quarterly - Summer 2008

Training Industry Quarterly - Summer 2008 At the Editor’s Desk Contents Ezine Email Winning Organizations Through People Before You Buy… Learning Technologies Games & Simulations: Playing to Learn Designing Learning Simulations: Strategies for Leveraging Failure Business Impact 101: The Value of Learning Strategic Alignment: Transforming the Business of Training Meet David DeFilippo Meet Krys Moskal Meet Vince Eugenio Dealing with Death: Learning’s Most Sensitive Lessons Closing Arguments

Training Industry Quarterly - Summer 2008

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