18 July 2019

Learning Impact: Tying Learning Impact to Business Goals

Dani Johnson
Co-founder & Principal Analyst

TL;DR

This article is the 2nd in a series of 7 articles highlighting how learning leaders should be thinking about learning measurement.

“Instead of worrying about my learning ROI, if I can show a business leader where to impact behaviors to add $1.4MM to their net profit, it gets their attention.”

Andy Webb, Director of Training, Applied Industrial Technologies

The single biggest piece of learning impact advice we found in our literature review and in our conversations with leaders was to ensure a link between what L&D functions were doing and measuring and overall business goals.

Granted, we know of exactly no L&D functions that intentionally work against business goals. Most are cognizant of business objectives and do their best to fulfill them. The difference between the average organizations and the more evolved organizations appears to be how they prioritize. Average L&D functions tend to triage based on squeakiest wheel or easiest fix, generally driven by priorities of individual business units. Evolved L&D functions are much more thoughtful with their priorities: they develop strategies to impact overall business goals and move the strategy forward. How do they do it? There tends to be three things they understand:

The overall direction of the larger organization.

Not surprisingly, it’s difficult to have a positive impact on the direction of the organization if you don’t understand the direction the organization is moving. Evolved L&D functions tend to be tied into the rest of the organization, its challenges, and its overall goals. Understanding these things puts them in a better place to ensure the right kind of employee development is happening in order to ensure the skills and knowledge necessary to meet the challenges.

This isn’t always easy. L&D has long been seen as a cost center rather than a competitive advantage, and as such, are not often considered crucial to those conversations. However, instead of worrying about their credibility or getting the proverbial “seat at the table,” more evolved L&D functions actively join the conversation.

How leaders are doing it:

One leader we spoke with said that they often find themselves being more forceful than they would like: they invite themselves to strategy discussions early on in projects to ensure that they can have a stronger impact – rather than waiting for leaders to come to them (which often happens as an afterthought).

How success is being measured.

Evolved L&D functions don’t just understand their own metrics, but the key performance indicators (KPIs) used by the larger organization. Understanding the general direction and challenges the organization faces is one thing; understanding how those things are being measured is another.

Understanding the metrics that are important to other business functions will (or at least, should) affect the metrics that L&D functions use. For example, if customer satisfaction is a goal for the organization or business unit, L&D functions will likely focus on improving those scores.

One organization we spoke with told us that they were approached by a business unit that was trying to promote the sale of a particular product by their inhouse sales team. The measure that the sales department was using was how many of the products were sold through the inhouse sales team.

L&D put together a short program teaching the team about the product and administered an assessment to ensure that the team had the knowledge to deliver. But the numbers didn’t improve. However, their understanding of how success was being measured and the product knowledge of the team helped them find the root cause of the failure: another department was offering a bigger incentive to sell something else instead. (As it turns out, the sales function was measuring the wrong thing: instead of measuring sales, they should have been measuring times that the product was offered).

Getting other businesses to share information on KPIs is often also more difficult than it sounds. A few of the organizations we spoke with told us that leaders of other business functions were often reticent to even discuss KPIs. They were not seen as a consequential or influential part of the business and were worried about their data being mishandled. But some are figuring it out.

How leaders are doing it:

Derek Mitchell, one leader we spoke with, spent the first three months of his tenure in a new role speaking with leaders from other business units to figure out what was important to them and understanding the KPIs that were important to the business units so that they could come up with a strategy that helped move the needle specifically on those KPIs.

The need for collaboration.

Evolved L&D functions understand that learning and development isn’t just their job; it’s everyone’s job – from senior leadership down to individual contributors – and they tend to do a better job at collaborating than their average counterparts.

Notice that we said “collaborate” and not “serve.” While many L&D functions see their customers and clients as internal (the business units and their leaders or the employees), evolved organizations put themselves on equal footing with leaders of other functions and work with them to come up with solutions that can move the business forward.

How leaders are doing it:

Rachel Hutchinson, Director of Learning and Development at Hilti, Inc., told us that they make sure they’re constantly staying connected to what is the core business. And they do it in two major ways.

First, L&D professionals go on field rides with the company’s sales team at least once per year. This gives them the opportunity to talk to customers and to see what challenges a person on the job faces. In turn, this gives them a better understanding of the critical skills and skill components they need and how they can best meet those needs and measure success.

Secondly, L&D professionals focus heavily on building networks within the organization. They have found that good relationships with stakeholders are crucial to both getting their buy in in order to drive change and to get a firm understanding of the business problems they face.

Rachel feels that focusing on these two things keeps the L&D function in step with the business – something critical in an age where business priorities can change on a dime.

Tying to business results is not just the first and most prevalent pattern we saw among organizations where learning has an impact; it’s also the most important – the holy grail if you will. As organizations continuously rely on data to make good decisions, L&D functions cannot afford to be left behind. Starting with understanding the goals that all business functions are working toward gives them a target and a direction for their efforts.

Questions to ask.

  • Does our L&D function understand our organization's top three priorities for this year? For the next three years?
  • To what extent do the metrics our L&D function tracks align to the metrics or KPIs that are important to the organization?
  • What are we doing to ensure that we remain lock-step with the larger organization?
  • How often does our L&D function actively collaborate with leaders in other functions to solve organization-wide strategic challenges?

The need for collaboration.
Read the introduction to the Learning Impact Study results: Having Impact, Not Just Showing It.

Written by

Dani Johnson
Dani Johnson

Dani is Co-founder and Principal Analyst for RedThread Research. She has spent the majority of her career writing about, conducting research in, and consulting on human capital practices and technology. Her ideas can be found in publications such as Wall Street Journal, CLO Magazine, HR Magazine, and Employment Relations. Dani holds an MBA and an MS and BS in Mechanical Engineering from BYU.

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