Measuring business impact: a vital opportunity for L&D teams
Posted on 5th October, 2017 by Ben Miller
LEO’s research into learning analytics highlighted the appetite among organisations when it comes to measuring the business impact of learning. But how can L&D professionals start to measure effectively, and why is it such an invaluable part of organisational success? In this discussion which took place at NextSteps 2017 in London, Piers Lea, Chief Strategy Officer at LEO, and Donald H Taylor, Chairman of the Learning and Performance Institute, explore this key L&D need and outline its huge potential for learning teams.
Donald H Taylor: Why is the business impact of learning so important – and why now?
Piers Lea (above): I think there are a number of reasons why it’s important. Obviously, as pressure on budgets becomes ever greater inside large organisations, it’s very important that L&D is able to demonstrate its impact to business.
DHT: Is it more important now than it ever was, or is it easier?
PL: This is a subject which we’ve all been talking about for a number of years and probably failing to deliver on. We now have the capability and the tools in the market to be able to actually correlate the impact of learning.
DHT: When you say correlate, are you talking about finding data, for example on performance, and correlating that with learning activity?
DHT: Not to prove, but to correlate something between the two: so this happened, and then this performance impact was seen?
DHT: Are you already doing this?
PL: Yes. It’s something that is happening in pockets across the industry. The main thing that we’re looking for is to put in sustainable strategies. If you look at the history of how, for example, return on investment studies have been done, they tend to get frozen in time, meaning they lose their usefulness.
DHT: They are transactional – they represent one particular event.
PL: And they tend to be a snapshot. What we’re looking to do is to put in the right thought process and systems to support that thought process, which will allow people to be able to predict what is going to happen next, to use a big data approach and look at requirements.
DHT: Which is the greatest challenge: the implementation of the technology to do what we need to do with the data, or the new mindset?
PL: At the moment, the technology is, for the most part, there. We’re able to see that and there are now some great examples of this. The main thing is that there is a requirement to think through and put in place a strategy for how to measure the business impact of learning. Organisations have been able to get away with not having a documented learning strategy on occasions. We find lots of organisations that do not. But if you’re going to make business impact measurement work as a strategic tool inside an organisation, then it has to involve the rest of the business in ways that perhaps don’t currently happen. The strategy has to be formed with the involvement of the rest of the business.
DHT: Who needs to be on-board in the organisation for that strategy to be adopted?
PL: Clearly, this needs to get support from leadership. We’ve done some research into how much leadership is actually demanding business impact measurement: it is still low but it’s growing quite fast, and in some cases very immediately. We had one organisation who were asked to demonstrate the business impact of learning and the value of their learning investments.
DHT: Somebody suddenly said, “show me it’s working”?
PL: They were given 28 days to do so.
DHT: Oh my goodness.
PL: It’s obviously slightly extreme, in that particular case. This is definitely something that we believe is a growing trend. We will release new research every year now, to see what the pressure is. I think it’s actually up to L&D to make sure that we’re leading the way in this and not lagging behind. We’ve got to be using data in the way that organisations are in so many different ways.
DHT: What happens if L&D does lag behind?
PL: Business will go round L&D to get it done. I think we’re seeing this already. There’s a huge opportunity for L&D to get involved, with the zeitgeist being change already – from what we can see, of 350 organisations we surveyed [in LEO’s research], more than 86% of the people who responded said that they wanted to use learning analytics to improve the quality of learning. That’s a resounding response that I don’t think we would have gotten a few years ago. Where you’re talking about a strategic direction, when you mix learning with work – because everything’s going faster and getting more complex at the time – then you need to weave the learning process into management structures and the way that management operates in the first place
The role of setting that up, enabling it and creating something which is sustainable and the requirement, therefore, to deliver learning, is a huge thing to organise and requires a lot of people. The thought process is that learning is moving to become much more central to business strategy – that’s what we believe will happen. If you’ve read a book called Black Box Thinking [by Matthew Syed], you will know that we all learn from failure. As L&D, we have to know what is and isn’t working. At the moment, we know some of it but we don’t have a really clear picture of it, and it’s essential that we have that.
DHT: Now we have got the technology and the data, it’s incumbent on us to put it to work.
PL: We also have a much wider understanding of what would be called ‘big data approaches’. As opposed to the laborious efforts of doing an ROI study, which one might have done in the old days, what you do now is start collecting the data and look for the patterns in that. It’s a different way of thinking about it. The first thing to do is to work out how to start collecting that data in the first place.
Then you can start looking at that data and working out what’s good and bad, and progress to look at advanced data evaluation by bringing in other correlating data from the business. There is a stepped process to go through but it’s very important just to start on the journey now because it takes a few years to start building up enough meaningful data.
DHT: Can everybody in L&D do this?
PL: I think it’s where the will is, isn’t it? We know from our research that although there are always going to be some priorities that stop people from measuring business impact, the desire is definitely there. L&D can do it but, as we see from the Towards Maturity data, there is a clear recognition of a shortage of skills in terms of the ability to organise and analyse data.
DHT: What are the biggest priorities that L&D people have got for their time?
PL: What we see is that it is always about moving on to the next thing. Whereas somebody might try to look at the effectiveness of what they’ve been doing, the demand from the business is actually to get the next thing out. At the moment, that’s often in the area of compliance and making sure that the roll-out is done. The point about the kind of strategies we’re talking about is that once you’ve made that first step and put the strategy in place, it should work in a self-sustaining way. Rather than a massive effort, it becomes ‘business as usual’ – you start reaping the rewards and see where the investment is going.
That could mean putting in a negotiation programme and monitoring where the margins are improving in a certain area. You can very effectively go into a pilot launch mode and then roll things out. That might take six months or a year, but you have a programme to do that, and to make sure that the large investment that’s going in, particularly for global initiatives, is going to pay back.
DHT: Is this the greatest priority for L&D at the moment? Is it the future of learning and what we should be focusing on?
PL: Certainly, in terms of what LEO, NetDimensions, gomo and the wider Learning Technologies Group is doing, we believe that the ability to deliver results is the main focus. Delivering results means that you have to have proof of results which you can take to a board. In terms of a vision, we want to be moving learning to the heart of business strategy because that is where we see learning going as the industry develops. There’s a view [echoed by Deloitte’s John Hagel] that the reason why large organisations will continue to exist is for their ability to be able to scale learning. I think that’s quite an interesting view. If that is one of the key areas for competitive advantage and one of the key ways of delivering efficiency, then it’s an incredibly important subject.
If you’d like to speak to LEO about your measuring business impact needs, contact us today!
Want to know more about setting your measurement strategy? Read LEO’s Insight, ‘How to define your business impact measurement strategy’.