Measuring What Matters in Learning to Drive Business Impact

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Measuring What Matters in Learning to Drive Business Impact

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Measuring the impact of learning programs is one of the most important responsibilities of HR departments, yet few organizations excel in this area

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      Deloitte Consulting LLP
    • August 13, 2020
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    Overview

    C-suite executives want to know if company investments in learning, training, and leadership programs are advancing strategic business goals. However, most organizations fail to measure what really matters and rarely get the insight they need into the effectiveness of their learning programs. Learning’s true impact on critical business results can be measured. But HR departments need to change their approach to focus on measuring results—not just activities.

    L&D Functions Are Failing to Connect Learning to Business Outcomes

    In a highly competitive environment in which talent and skill development are critical, measuring the impact of learning programs is one of the most important responsibilities of HR departments. Yet very few organizations excel in this area.

    According to our research, 59 percent of companies have difficulty connecting learning to business outcomes, 56 percent say they have inadequate tools for analysis, and 50 percent cannot capture meaningful data on informal learning programs. A mere 5 percent of organizations excel at measuring key metrics concerning learning alignment, efficiency, and effectiveness.

    KEY POINT

    A mere 5 percent of organizations excel at measuring key metrics concerning learning alignment, efficiency, and effectiveness.

    The reason for this is that most companies measure learning backward. They focus on the data they have rather than the results they are trying to achieve.

    The end result, as Figure 1 shows, is that most organizations measure “busy” metrics (e.g., program enrollments, completions) rather than “business” metrics (e.g., business results). In other words, the data that is being captured is not the most valuable to the business, while the metrics that are most valuable for decision-making are generally not measured. Fewer than 40 percent of companies measure the impact of learning on business outcomes such as revenues, cost savings, or quality.

    KEY POINT

    Fewer than 40 percent of companies measure the impact of learning on business outcomes such as revenues, cost savings, or quality.                            

    This approach does little to demonstrate that learning functions are investing resources in a way that drives business impact—the key concern of business leaders who make funding decisions regarding learning programs. These challenges are becoming even starker as companies move toward a continuous learning model in which more learning takes place outside traditional classrooms or other formal settings.

    Key Messages

    Addressing the current shortcomings of learning measurement will require learning functions to adopt a new mindset. A major component of this evolution is a transition from merely reporting data to providing insightful analysis. However, crossing the chasm between reporting and analytics poses many challenges. The process must start with a clear understanding of the business goals senior executives are trying to achieve.

    Understanding the overall goals of the business promotes better alignment between how learners are developed and what executives want to accomplish. Yet our research has found that fewer than 50 percent of companies have a written business plan for measuring and evaluating learning, while only 35 percent specify business impact goals in their plans.

    KEY POINT

    A surprising one in five companies does not even have a business plan for its learning programs. It is hard to measure progress toward a goal if you do not have a goal in the first place.

    Learning functions must embrace the new world of talent analytics. The proliferation of data, both inside and outside the company, enables learning teams to use data science to measure results and make informed decisions. Yet very few organizations (about 16 percent) are using advanced statistics, visualization tools, or social learning tools.

    Call to Action

    CHROs must ensure their departments think of learning as a means of propelling business results. This includes measuring what truly matters, rather than only those activities that are easy to measure. Action steps toward achieving this goal include:

    • Focus on business outcomes. Concentrate on what matters to the business as a whole rather than what matters to the learning function. Do not be afraid to cut those programs that are not achieving results.
    • Push the learning function to gain greater knowledge of the business. It is impossible to understand what outcomes actually matter without a deep, intuitive knowledge of the business itself. Just as with finance or operations, the learning function’s role includes understanding the business. Building relationships with stakeholders throughout the company will build knowledge while improving business alignment.
    • Devote greater resources to measurement and data. The average organization devotes only about 2 percent of its learning budgets to measurement. More than one out of four (28 percent) do not even know how much they spend on measurement. CHROs need to empower a specific learning leader to own measurement and track progress against business goals as part of an overall effort to build a data-driven decision-making culture within HR.
    • Deepen learning and development capabilities and skills sets. Many companies have groomed master “order takers” who create learning offerings on request without a deeper understanding of the goals those offerings are meant to achieve. Learning functions should instead focus on providing what the business needs. Perhaps start by renaming the group to emphasize its actual role—the learning and development function exists to promote performance in key areas that will drive the business forward rather than to merely build a catalogue of offerings. This may also require staffing up for analytics capability.  

    Key Takeaways

    • Measuring the impact of learning programs is one of the most important responsibilities of HR departments, yet few organizations excel in this area.
    • Most companies focus on the learning data they have rather than the results they are trying to achieve. The data that is being captured is not the most valuable to the business, while the metrics that are most valuable for decision-making are generally not measured.
    • Addressing the current shortcomings of learning measurement will require learning functions to adopt a new mindset. A major component of this evolution is a transition from merely reporting data to providing insightful analysis.
    • Learning measurement strategies must start with a clear understanding of the business goals senior executives are trying to achieve.
    • The proliferation of data, both inside and outside the company, can enable learning teams to use data science to measure results and make informed decisions.
    • CHROs must ensure their departments think of learning as a means of propelling business results by focusing on business outcomes, pushing the learning function to gain greater knowledge of the business, devoting greater resources to measurement and data, and deepening learning and development capabilities and skills sets.

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