Optimizing Investments in Learning

by Peggy Parskey, Associate Director, Center for Talent Reporting & John Mattox, II, PhD, Managing Consultant, Metrics That Matter

You might wonder why L&D leaders need guidance for optimizing investments in learning. Recent research from The Learning Report 2020 (Mattox, J.R., II & Gray, D. Action-Learning Associates) indicates that L&D leaders struggle to convey the impact of L&D. When asked what they would do better or differently to communicate value to business leaders, 36% of L&D leaders indicated they would improve processes related to communication. More telling though is, 50% indicated they would improve measurement. To convey value, leaders need a story to tell. Without measurement there is not much of a story.

This is where Talent Development Reporting principles (TDRp) are so relevant. It begins with a measurement framework that recommends gathering three types of data: efficiency, effectiveness, and outcomes. Efficiency data tells the story of what happened and at what cost. How many courses did L&D offer? How many people completed training? How may hours of training did learners consume? What costs did we incur? Effectiveness data provides feedback about the quality of the learning event (e.g., instructor, courseware, and content) as well as leading indicators of the success of the event (e.g., likelihood to apply, estimates of performance improvement, estimates of business outcomes, and estimates of ROI). Outcomes are the business metrics that learning influences such as sales, revenue, customer satisfaction, and employee satisfaction. TDRp recommends gathering data for all three types of measures so L&D leaders can describe what happened and to what effect.

The table below (Table 11.1 in Learning Analytics) shows a variety of measures for each category.

Key Performance Measures for L&D

Source: Learning Analytics ©2020, John R. Mattox II, Peggy Parskey, and Cristina Hall. Published with permission, Kogan Page Ltd.

In addition to this guidance about what to measure, TDRp provides guidance on how to report results using methods familiar to business leaders. Using these measurement and reporting approaches, L&D leaders can tell a robust story to business leaders that they can connect with.

In April 2020, Learning Analytics, Second Edition (by John Mattox, Peggy Parskey, and Cristina Hall). The book helps L&D leaders improve the way they measure the impact of talent development programs. The second edition includes a chapter on Optimizing Investments in Learning, where TDRp is discussed in detail. TDRp is featured heavily in the book because it helps L&D leaders connect their efforts to business outcomes by measuring the right things and reporting them in a way that business leaders understand.

In Chapter 11, the authors connect TDRp to the Portfolio Evaluation methodology. This approach implies that business leaders are interested in how learning and development programs impact four business areas: growth, operational efficiency, foundational skills, and risk. By aligning courses with one of these business areas and using TDRp, L&D leaders can demonstrate the effectiveness of the courses in preparing the workforce to improve each business area (portfolio).

The book also provides guidance on how to use TDRp to spur L&D leaders to act on the data they report. The book indicates L&D leaders need to shift reporting in three ways to make it more actionable (see graphic below). Reports should provide:

• Analytics that improve business decisions
• Insights that link to evolving business challenges
• Information that connects talent data to business impacts

Using Data to Spur Action

Source: Learning Analytics ©2020. Reproduced with permission, Kogan Page, Ltd.

Another critical aspect of conveying a meaningful message that drives action is to tell a compelling story. Chapter 11 of the book includes three critical elements of a data-driven story:

• Scene Setting—Connect all data and results back to the desired business outcomes and goals.
• Plot Development—Emphasize logical and clear connections between learning results and outcomes; focus on the central message of the results, not peripheral findings; and note any areas where L&D is creating value for the organization.
• Resolution—Clearly and succinctly outline the justification for key findings; suggest improvements, recommendations, and nest steps. Continue the conversation on how to help L&D improve.