How can management measure ROL? Two fundamental metric approaches help to understand the financial impact a Contiguous Integration of Learning and Strategy (CILS) has on the bottom line: the macro and the micro approaches.
Macro Approach
In the macro approach, management measures the overall success of the entire organization in achieving its financial goals. Putting aside unforeseen market forces and economic upheavals, a learning organization that meets the financial milestones set by its CEO and board of directors owes a strong portion of that success to its support of a dynamic CILS company-wide program. With its continuous oversight of the effectiveness on internal systems, regular analysis of data and reports, staff training, and special targeted programs, CILS provides a pathway to the success of nearly every division of the company. The ROI (return on investment) of the entire organization means that the ROL (return on learning) of CILS is strong, as well.
However, this “big picture” approach will require some historical perspective. To measure the overall ROL, the financial team needs to look at the ROI of the organization several years before it made the transition to a learning organization and instituted CILS. Corporate annual reports for several years before the transition should yield the data required. Then the financial team should compare these to the reports from the first two years after the introduction of CILS to get a sense of how the transition affected the overall ROI. Finally, the most current financial performance report, created after CILS has been up and running, will offer a snapshot of the present ROI of the company. Factoring in such variables as inflation and changes in the economy, this historical research should give management a quantified accounting of ROL.
Micro Approach
The micro approach evaluates the ROL of specific CILS programs designed to achieve strategic goals. Once the CEO approves the expenditure for the particular learning program, the financial team can monitor its success on a cost/benefit basis. The office of the CLO should establish mechanisms for evaluating such programs to continue to validate efficacy and improve them through subsequent revisions and iterations. A successful outcome invariably indicates a strong ROL.
Again, key quantitative metric variables include:
- Attendance and participation rates
- Assessment and exam scores
- Performance reviews scores (i.e., manager and peer feedback)
- Individual job improvement proficiencies (i.e., decreased time to reach sales quota)
- Job promotion rates
- Individual job retention rates (i.e., decreased attrition).
- Mentoring, leadership, and skill transfer cascading
- Job satisfaction levels
- Client satisfaction levels
- Cultural motivation
- Product and process innovation
Where the macro approach seeks to determine if the integration of learning and strategy, as a planned tactic, stimulates enhanced returns, the micro approach isolates the CILS contribution as a piece of the solution and measures its direct impact on ROL.
Key Variables
Both approaches to quantify ROL require that an organization view the results on several levels. There is the ultimate level of the macro approach, which analyzes the contribution CILS made to the bottom line ROI of the organization. Then there is the micro approach, which ascertains the impact of CILS on the success of particular programs in addressing the company’s strategic goals. There are also methods to assess the ROL as it affects areas of the operation that are less definable but that are significant to the success of the organization.
External Network: One such area is the relationship between clients, vendors, and outside partners on the one hand and the company on the other. Analysis of the impact of CILS programs on this area comprises the “outside-in” perspective. Are clients happier after the changes made to the company through CILS? Are they more likely to continue and grow their business with the company? Are they more likely to vouch for the company to other potential clients? Have the learning programs made relations with clients and vendors more transparent, efficient, and beneficial? Has the confidence level of outside financial partners, such as investors, shareholders, and financial institutions, in the company’s ability to set and meet its strategic goals and meet its growth targets become stronger? The answers to these questions offer some perspective on the overall efficacy of the learning programs.
Part of what it means to be a learning organization includes keeping in touch with this wide network of professional affiliates and understanding their attitudes regarding the company and its future. Gaining perspective on the organization through the eyes of its outside partners gives management a strong sense of the ROL an organization has achieved. Formal and informal client surveys are one way to gather this information. Regular “check-ins” with key personnel on the front line of client and investor relations is another way gain insights into the company’s industry profile.
Internal Network: The “inside-out” perspective is important to get a “nuts-and-bolts” sense of how well CILS is working internally. The overarching goal of corporate learning is organizational improvement. One of the most dramatic indicators of ROL is the benefits derived from these programs by the staff. To gain this perspective, it is important to assess the performance of the group of employees who participated in the learning programs. Do the managers and other corporate leaders with responsibility for achieving the strategic goals linked to a given learning initiative find measurable benefit from the initiative?
Did the participants gain the progressive skills the program promise to teach? How did their participation affect their morale? What effect does ongoing participation have on retention, promotion, and individual growth?
Once again, both formal and informal periodic surveys will yield this information. Focus groups or even town hall meetings with company management are effective methods to get qualitative feedback from participants and other employees that can be used to inform and improve future initiatives. In more technical areas, employees might be asked to take skills tests in order to measure whether or not the intended skills were learned and how well.
The principal character of any learning organization is self-analysis. Taking the pulse of the organization on continuous basis is key to the evaluation of the ROL. Reactions and results change over time, and an accurate assessment of the value of any learning initiative has to measure those changes.
On an organizational level, of course, basic performance metrics are a critical factor—perhaps the most critical— of assessing ROL. But comprehensive assessment of learning initiatives should employ a broad range of tools that are applied in direct relation to the subject of and the question behind a given assessment. And tracking the long-term satisfaction and success of learning participants—and all employees, for that matter—will provide additional evidence of the organizational return, or lack thereof, of CILS across the board.
Whatever the approach taken to gain some perspective on corporate learning, there are four metrics to measure ROL. They are: financial performance, productivity, targeted skill development (TSD), and growth catalyst. The application of these metrics to the overall organization’s performance or the success of a particular initiative forms the basis for assessing the ROL and the attendant ROI of CILS.
Excerpt from “Learning to Succeed: Rethinking Corporate Education in a World of Unrelenting Change” by Jason Wingard, Ph.D. (AMACOM, May 2015). For more information, visit: http://www.amazon.com/Learning-Succeed-Rethinking-Corporate-Unrelenting/dp/0814434134
Jason Wingard, Ph.D., is dean and professor of the School of Professional Studies at Columbia University. Previously, he served as the chief learning officer at Goldman Sachs, where he was responsible for the strategy and implementation of thought leadership and management development solutions for the firm’s global workforce and clients. Dr. Wingard is also president and CEO of The Education Board, Inc., a boutique management consulting firm. Previously, Dr. Wingard served as vice dean of the Wharton School, University of Pennsylvania, where he led Executive Education and oversaw one of the world’s largest providers of leadership development for managers and executives. He also served as senior vice president of Regional Markets at ePals, Inc., and President and CEO of the ePals Foundation. ePals, Inc. is a leading provider of school-safe collaborative learning products. Dr. Wingard holds a B.A. in Sociology (Organizational Behavior & Social Psychology) from Stanford University, an M.A. in Education from Emory University, an EdM in Technology in Education from Harvard University, and a Ph.D. in Education, Culture, and Society (Corporate Education) from the University of Pennsylvania.
