Long- term Return on Learning Investment
An organisational culture that nurtures learning enhances the team’s capabilities and potential, and increases overall business performance.
In this article Deepak Chandra, Associate Dean, CEE , reflects
on the strategic importance of investing in learning for
an organisation.
As a senior leader the topmost concern in one's mind
would be the continuity of his/her organisation both in
the short term and in the long term. As the economic
environment becomes more globalised and
inter-connected, the size of opportunities and risks
are also growing multi-fold. Increasing competitive
pressures and new entrants have forced organisations
to increase the speed with which they respond to the
demands at the marketplace.
While availability of capital and good strategic
planning can ensure that the organisation keeps
growing at a desired pace, continuity of the
organisation largely depends on the people who are
manning the key positions, and are expected to do
continue do so in the near future. As the
organisation grows in size and people, it becomes
more important to enhance the overall capability in
the organisation at a rate faster than the rate of
change at the marketplace.
Continuous learning is one of the key drivers to
build organisational capability. And whatever is
critical needs to be measured and monitored to
ensure that it is on the right track. A chain of
impact described below must be evident if the
particular learning programme is adding business
value. All stakeholders-sponsors, designers,
developers and facilitators - must be closely
involved in the programme to understand this chain
of impact.
|
Level |
Measurement Focus |
| 1. Reaction and Planned
Action |
Reaction to the
programme, including plans to take action;
e.g., Relevance, Importance, Usefulness etc. |
| 2. Learning and Confidence |
Learning how to
use the content and materials, including the
confidence to use what was learned; e.g.,
skills, knowledge, capacity, competencies,
etc. |
| 3. Application and
Implementation |
Use of content
and materials in the work environment,
including progress with implementation;
e.g., extent of use, task completion,
actions completed etc. |
| 4. Impact and Consequences |
The
consequences of the use of the content and
materials expressed as business impact
measures; e.g., productivity, revenue,
quality, efficiency, etc. |
| 5. ROI |
Comparison of
monetary benefits from the program to
program costs; e.g., Benefit/Cost Ratio (BCR)
ROI (%), payback period |
Most of the organisations have been
traditionally obtaining feedback from the
participants at Level 1 and 2 in earlier years. With
the changing business trends like significant
growth, increased competition, executives realise
that providing learning opportunity is valuable,
logically anticipating a payoff in important
bottom-line measures, such as productivity
improvements, quality enhancement, cost reduction
and customer service.
As a result, measurement and evaluation have been
changing and evolving across organisations and
cultures. The following trends have been identified
through personal interactions and interviews with
few CEOs / key executives from various organisations:
-
Organisations are increasing
their investments in measurement and evaluation;
-
Evaluation is an integral part
of the design, development, delivery, and
implementation of programs;
-
The increased focus on
measurement and evaluation is largely driven by
the needs of the clients and sponsors of
learning programs; and
-
Organisations with comprehensive
measurement and evaluation systems in place have
enhanced their program budgets.
Learning typically impacts the
capability and the potential in people, and
therefore return on learning investment can focus on
these two in process parameters. As in the case of
any investment, a sufficient amount of investment
must be carried out before any returns are visible.
Let me elaborate this through a grid depicting four
different scenarios that might be there in your
organisation.
Grid 1: Potential and Capability matrix
Based on the distance to be traversed from the
current state of the organisation, learning
investment has to be made accordingly in order to
ensure that new capability is built in the
organisation and that it generates exponential
returns on learning investment.
At CEE, we are continuously studying organisations
that have adopted practices at Application &
implementation, Impact and ROI levels. So the golden question is how much investment is
justified in the learning. Well our simple answer
is depends on how much the sustenance of your
organisation is of importance to you.
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