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How to Prove the Business Value of Your L&D Programs

October 15, 2014

No matter your department, or your job function, there’s one surefire way to ensure your programs are funded and you are well compensated as a professional. This is by demonstrating that your efforts produce a tangible business benefit for your company.

   

Unfortunately, this isn’t always easy with a soft science like learning and development.

   

Yet with the right strategy in place, you can demonstrate how your department helps to move the needle on critical organizational goals, and grow your budget in the process.

 

Here’s our 4-step formula for success.

 

1. Identify Individual Program Goals

 

When seeking to correlate your learning programs with business improvements, you must first identify your initiative goals. This is especially important when seeking funding for new programs where the value is unknown.

We recommend aligning your program goals with strategic priorities that are otherwise important to your organization – those big business goals that top-level executives are concerned with.

By tailoring the training programs to move the needle on your company’s big-picture priorities, you will cement the value of your training initiatives in a larger way.

Susan N. Palmer, a Program Director at the UNC Kenan-Flagler Business School, advises that this type of strategic alignment is imperative for modern L&D professionals. She explains, “Make it your business – even a job duty – to know and understand your organization’s strategic priorities and keep those priorities in mind when developing your learning and development programs.”

To learn where you should focus your efforts, Palmer recommends you:

Armed with a better understanding of the key issues facing your industry, you can then create programs which are aligned with the market, as well as your organization’s opportunities and gaps.

  

• Read about your industry and organization on the internet

• Learn about your competition

• Learn how your company is viewed externally and what your customers are saying about you both positive and negative.

 

2. Develop a base-line metric from which to track success

 

After identifying the programs or business outcomes that you hope to impact, it’s now time to find some numbers to track your performance against.

These “key performance indicators” (KPIs) will give you a quantifiable way to demonstrate the efficacy of your efforts.

We recommend looking at the pre-existing KPIs for any given category. For example, if you are looking to develop new sales training programs, you might track individual salesperson contribution to the pipeline as well as overall company revenues. For safety training, it might be the number of incidents.

A key point to remember: The most important metric to any business is profitability. So if you can demonstrate that your programs are somehow (even tangentially) working to increase sales, improve efficiencies, or increase profits, they will be viewed favorably by management.

 

3. Tailor make training programs to influence your identified metrics

 

To begin the process, we recommend that you find a good subject matter expert (SME). A good SME will not only give you a leg up when developing content, but will also give you an insight into your area of interest that would be otherwise impossible.

For example, a veteran sales professional will have a much clearer understanding of the KPIs and critical success factors for salespeople than we, as L&D professionals will. Together with your SME, consider creating a baseline assessment to see where employees are falling short.

For example, if you are looking to develop a sales training program, you might consider measuring your reps people skills, product knowledge and cold-calling abilities.

Your SME can provide insight into the critical skills required of employees within a given position.

After assessing the gaps, you can then build your training content. We recommend beginning with a high-level outline that lists key topics, and then filling in the details around those ideas.

Finally, create assessments that will measure your success. Consider crafting assessments that revisit those topics from your original baseline test.

 

4. Reconcile Training Metrics with Business Metrics

 

As L&D professionals, we’re often preoccupied with training specific metrics, but it’s important to remember that it isn’t your overall enrollments or training completions that will impress executives when trying to tie L&D efforts to business results.

In an article for the American Society for Training and Development (ASTD), John Castaldi, a veteran training professional explains, “In a previous role, when I updated my vice president on training projects, she often answered professionally, yet curtly: ‘John, so what?.’ I took her matter-of-fact response as a career-critical reminder that executives do not care about training activity (such as number of class participants or course satisfaction scores).”

So when reporting to your executives, take care to avoid “so what” metrics. Instead, focus on tangible business results.

For example, if offering sales training, analyze your course completions against improvements in product knowledge and sales tactics, closed deals and revenue generated. When you can show that an increase in training completion correlates with business results, it will be clear why your programs are valuable.

To further demonstrate the value of training, The ASTD recommends supplementing data with participant comments to increase credibility.

 

A Tool to Help

 

Thanks to a recent update to our Exceed LMS, you can create dashboards that will analyze training metrics in tandem with business metrics, and report on the results. The recent update allows you to sync with data visualization tools such as Tableau and GoodData, or sync with Google Drive to create your own customizable reporting dashboard.