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Accountability7 Reasons to Measure Learning ROI

One big reason to measure learning? The boss wants it.
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By Jack J. Phillips and Patti P. Phillips

In the Chief Learning Officer Business Intelligence Board 2015 Measurement and Metrics Survey, 36 percent of chief learning officers surveyed report they use business impact data to show training impact; 22 percent of the CLOs use return on investment data for the same purpose.

Some 23 percent of respondents plan to implement ROI in the next 12 months and about 10 percent plan to implement it in the next 12 to 24 months. Also, 18 percent plan to implement it with no particular time frame. This means about 50 percent of CLOs plan to implement ROI in the future.

Your organization must be ready to address the challenge. Taking a more serious approach to measurement requires moving to impact and ROI analysis, connecting programs to business measures, and isolating program effects from other influences. A few projects might need to measure financial ROI as the impact is converted to money and compared with the program’s cost. When learning leaders pursue serious evaluation on key programs, the payoffs are huge.

Here are the seven reasons to do it.

1. ROI can make programs better. The No. 1 reason to measure impact and ROI is to improve programs, particularly ones designed to add value to the business. Whether the program has a negative ROI or a positive ROI, this analysis will provide information to improve them. In essence, evaluation at this level leads to optimization where a higher return on investment is attainable. Ultimately, this can lead to allocation, stakeholders investing more in programs that deliver more value.

2. ROI helps you keep programs, not eliminate them.When a program has a clear business connection, it will stand the test of time. A negative program does not mean you eliminate it. Instead, it is usually improved to deliver more value. It is rare to kill a program because of a negative ROI.

3. ROI proves that you have an impact. Most team members want to know they make a difference and that they contribute business value to the organization. Having a credible analysis that connects learning to impact and isolates the program’s effects from other influences is satisfying. It is even more satisfying when the results show a positive ROI has been delivered. Reporting a positive ROI allows learning to move from being perceived as a cost to being perceived as an investment.

4. The boss wants it. For executives, the No. 1 desired category of results from programs is business impact; No. 2 is ROI. Contrast this with the number of learning and development functions that actually provide that level of results; it is easy to visualize a huge gap.

5. ROI can protect your budget. In tough economic times, budgets are often under scrutiny. Programs could be eliminated. Thestrategy is simple: To continue funding or increase funding, show the business value of current and proposed programs. Impact and ROI is a must. With this approach, many organizations have reported progress in maintaining and enhancing their budgets, even in downturns.

6. ROI helps to build key relationships. To survive and thrive in the learning and development function, you must have key relationships, particularly with important executives and administrators. These executives support you, provide your funding and request projects and programs. They need to see business value for what you do. Showing the impact and ROI is a great way to be perceived as a business contributor, and that will help create these necessary relationships.

7. ROI can build the support you need. We frequently hear comments that operating units will not allow access to data, or that managers do not support learning programs. These are often midlevel managers who see learning as a disruption, not as an investment. They only support what they have to. The problem might lie in the results that we show to this important group of people. Connecting learning to impact is often connecting to their key performance indicators. When you do that, you will get their attention and more than likely, their future support.

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