IS YOUR L&D FUNCTION ADDING BUSINESS VALUE?

From the desk of Sue Todd...

5 questions that will help you determine whether or not your L&D programs are adding to business success.

Before answering the 5 questions, first consider these:

How can you really know if your L&D programs are highly relevant to business success or are just considered “nice-to-have”?

How might you predict if your L&D budget will be…

• dramatically slashed in an economic down turn?
  
• reduced by less than other support functions?
• increased to counteract other drags on business performance?

What’s the likelihood your senior executives are beginning to think they need to install someone with a business background to lead the learning function to redirect its focus toward improved business performance?  CorpU’s 8th Annual Benchmarking Study of 225 organizations shows that more than 52% had a new leader assigned within the last 18 months, and more than 36% said team members were replaced with people who had a stronger background in business than in learning.

If you answer the following 5 questions with complete honesty, you’ll get a good idea of where you stand in terms of how much value the organization “perceives” your function provides.  Notice the word “perceives.”  Since there are still no agreed upon and defensible quantitative formulas to prove a dollar value of a training benefit (not until we have a version of Generally Accepted Accounting Principles for Talent), we have to at least be certain the organization’s perception is that we are adding significant value.  Perception will be the reality senior executives rely on to make funding decisions.

Even though the learning function was always a strategic player at HSBC, it required a step back to look at the larger vision to determine if funds and resources could be spent better in other areas. HSBC's Regina Nowlan believes that it is up to learning professionals to define the learning strategy and alignment to business strategy. Think about the following questions and answer them fairly.  If you don’t think your results are where you’d like them to be, we’ll offer suggestions on how to improve in the May 27 CorpU Weekly.

Driving Learning Strategy

1. Are you providing good insights to senior business leaders as they try to cope with managing talent as a critical business asset?
   
   Nearly every aspect of business, our previously held ideas on economics, and even traditional monetary systems are in tremendous flux as the world copes with the impact of value shifting from physical, tangible assets to the value inherent in knowledge and networking. The Internet and the global economy are causing significant upheaval in our traditional management principles. Many companies we were to admire for being “In Search of Excellence” only a few years ago, find they’ve fallen behind competitors now.
   
   Rather than pursuing simplicity, compliance and conformance, new business models will need to take advantage of creativity, complexity and some say, chaos. Ideas, knowledge, innovations, and good judgment are critical business resources moving forward. How well do you understand this shift? Are you providing counsel to leaders to help them shift their thinking? Is your own team being innovative in ways it will help the organization leverage its talent resources? What books are you reading? What seminars are you attending? How well do you understand the value of the resource you now are in charge of developing for the business?
2. What is your market share?
   
   Consider the organization’s entire investment in Learning & Development. The corporate learning function manages or advises on the spending of some percentage of that total investment for enterprise-wide programs and services. Business units set aside funds to invest in L&D. How much do they invest with you? What’s the likelihood they’ll bypass the corporate function to negotiate with an external partner without your knowledge? You can track market share on all programs delivered, learning technology solutions, delivery services, logistics and so on. What is your current market share of those?
   
   It’s possible that functional groups like sales and IT manage their own L&D budgets due to the technical nature of those. Or, a highly decentralized organization may put funding accountability into Business Units. But do these other areas adopt processes you’ve developed? Do they use the technology solutions your team provides? Do they seek your advice and counsel to improve curriculum, or follow your methods to measure and improve their programs? Perhaps you add value as a solutions integrator by researching and helping to select partners, supporting delivery and assessment capabilities, and assembling program elements into a cohesive, performance-focused curriculum.
   
   Although it’s unlikely that corporate L&D teams – especially in large organizations - have full accountability for the entire investment – you can begin to see your value by monitoring your total market share.  Determine if it’s increasing or decreasing by monitoring how other L&D functions are spending money on your programs, and adopting the technologies and processes you recommend.
3. When do you learn about important corporate initiatives?

   Timing is an important factor in determining your value.  If you are the nearly the last group to know about a strategic imperative – as though someone finally recognized just before launch that training might be needed to support a proper rollout – it says a great deal about what business leaders think of your value.  If you are engaged in planning meetings around strategic imperatives, that’s better. 

   However, if you take part in strategy discussions to learn first-hand about objectives that are critical to success, and are consulted on how to prepare the work force and transform skill sets, then you’ve become a strategic resource that’s critical to success.
4. What metrics do your business customers monitor to decide if they’ll do business with you again?

   A CLO who had worked with a large financial institution recently said he used to ask business customers what metrics they followed to determine if they would do business with his corporate learning function in the future.  He recognized that traditional training metrics didn’t provide a clear answer on customer loyalty. 

   Measures many L&D groups use today track the value of a single training event or program.  These types of measures may be valuable at the pilot stage as a gauge for improving the final product.  But they don’t speak the language of the business and probably aren’t good predictors of satisfaction with business leaders. 

   It may be important to understand a variety of success drivers.  Sales activities are typically more straight forward than others.  We can monitor a sales person’s call volumes and close rates to see if they are improving.  What metrics are important to R&D business customers or to managers as a total population?  Always ask yourselves: “Who is our customer?” Then decide how to measure customer loyalty for each customer segment. 

5. Which questions are you trying to answer for the CEO?

   The CEO doesn’t lay awake at night praying that his organization has delivered some number of hours of training to employees.  But no one’s thinking that hours of training is a valid value metric anymore, right?

   Try to put yourself in the CEO’s shoes.  Is he worried about a successful migration of the business to China, India and other emerging economies?  Is the company hoping to increase market share by working more closely with supplier or partner networks?  Is growth stifled by siloed thinking and behavior?  Is the company getting too little benefit from recent acquisitions? 

   If these are the questions on the minds of senior executives, how can you ensure that your programs contemplate those imperatives?  To what degree are ideas, tools, case studies and role plays infused with the business critical initiatives?    

If you’ve considered these questions and need guidance on how to improve your value, look for the CorpU Weekly on May 27. We’ll provide ideas about how you can improve the degree that your team is adding value.

Sue Todd, CorpU President and CEO