Portfolio Evaluation: Aligning L&D’s Metrics to Business Objectives

by Cristina Hall
Director of Advisory Services – CEB, now Gartner

Using data built on standard metrics has become table stakes for L&D organizations looking to transform and thrive in a rapidly-changing business environment.

A critical challenge that remains for many organizations, however, is how to prioritize and structure their metrics so that the numbers reinforce and showcase the value L&D is contributing to the business.  It’s important to select measurement criteria which reflect L&D’s performance and contextualize them with outcome measures used by the business.

Applying a Portfolio Evaluation approach to Learning and Development provides the linkage needed to address this challenge. It is a clear, outcome-centered framework that can be used to position L&D’s contributions in business-focused terms, at the right level of detail for executive reporting.

How Does L&D Deliver Value?

Delivering training does not, in itself, deliver value.  Training is a tool, a method, to develop employees’ knowledge and skills so they will deliver more value to the business.  The value that training programs deliver aligns to four strategic business objectives.

Driving Growth

Courses aligned to the Drive Growth objective are designed to increase top-line growth, thus growing revenue and market share.  The organization tracks metrics related to sales, renewals, upsells, customer loyalty and satisfaction, etc., while L&D can track leading indicators in each of these areas based on employees’ assessment of how much these areas will improve based on each training program they have attended.  These courses are intended to drive competitive or strategic advantage by focusing on organization-specific processes, systems, products, or skillsets.  Examples include courses that are designed to increase sales, customer retention or repeat business, new product innovation, or help managers best position their teams for business growth.

Increasing Operational Efficiency

Courses aligned to Operational Efficiency increase bottom-line profitability.  The business tracks metrics related to productivity, quality, cost, etc., while L&D can track leading indicators in each of these areas based on employees’ assessment of how much these areas will improve based on each training program they have attended.  These courses are intended to drive competitive or strategic advantage by focusing on organization-specific processes, systems, or skillsets.  Examples include courses that are designed to increase productivity, decrease costs, increase process innovation, or help managers maximize bottom line performance.

Building Foundational Skills

Courses aligned to the Foundational Skills value driver are designed to both ensure that gaps in employee skills can be addressed, and demonstrate that employees can grow and develop to provide even more value to the business; it’s frequently less expensive to fill a minor skill gap than to replace an employee who is already on-boarded and semi-productive. The business tracks metrics related to bench strength, employee engagement, turnover, promotion rates, etc., while L&D can track leading indicators in each of these areas based on employees’ assessment of how much these areas will improve based on each training program they have attended. These courses tend to be off the shelf content, rather than custom designed content specific to the business. Examples include time management, MS Office, and introductory/generalized coaching or sales courses.

Mitigating Risk

Courses aligned to the Mitigate Risk value driver are designed to shield the business from financial or reputational risk by ensuring employee compliance with specific policies or maintenance of specific industry certifications.  The business tracks metrics related to safety, legal costs, etc., while L&D can track leading indicators in each of these areas based on employees’ assessment of how much these areas will improve based on each training program they have attended.  These courses tend to be focused on compliance, regulatory, and safety training, and tend to incorporate content similar to that of other courses in the organization’s industry.

Become a Portfolio Manager

Every learning asset, whether informal or formal, can be tied back to one of the four drivers of value.  The variety and depth of metric collection and the performance expectations associated with those metrics differ across each of these value drivers, which is why grouping courses or learning assets into Portfolios is helpful.  L&D leaders become investment managers; monitoring and managing assets that are expected to produce comparable results to effect the performance of people, who in turn effect the performance of the business.

Getting Started

  1. Align metrics to Portfolios: what is most important? What data is needed?
  2. Align learning assets to Portfolios: this ensures that the right metrics are collected.
  3. Gather the data: gather training effectiveness data from learners and their managers and combine it with efficiency data from the LMS and Finance and outcome data from the business.
  4. Review, interpret, and share: use the metrics to communicate L&D’s contribution to business goals, confirm alignment, and inform strategic decision-making.

For additional detail regarding the Portfolio Evaluation approach, download our white paper, Aligning L&D’s Value with the C-Suite.

About CEB, Now Gartner

Leading organizations worldwide rely on CEB services to harness their untapped potential and grow. Now offered by Gartner, CEB best practices and technology solutions equip clients with the intelligence to effectively manage talent, customers, and operations. More information is available at gartner.com/ceb.

 

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