Running Learning Like a Business

The concept of “running learning like a business” continues to gain traction. It means different things to different people but in all cases involves bringing a more business-like perspective to the L&D function. Personally, I like to focus most on its implications for the actual management of learning programs and the L&D department.

So, you ask, what does this mean specifically? What would someone do differently? How can you tell if someone is running their operation like a business? I believe there are two primary elements to running learning like a business. First, you need to set specific, measurable goals or targets for every important measure. This becomes your business plan for a program or the entire department. This plan should be created just before the start of your fiscal year or no later than the first month of the new fiscal year. Second, once you have a business plan and the year is underway, you need to compare progress against plan every month and answer two key questions: 1) Are we on plan year to date? and 2) Are we going to end the year on plan? If you are not on plan or if it appears you may not end the year on plan, then you need to discuss options to get back on plan and decide whether to take corrective action. This is what we mean by disciplined execution.

Let’s look at each in more detail. First, you need good plan. Of course, there is lot that goes into a good plan beginning with an understanding of the organization’s goals and discussions with goal owners about whether learning has a role to play. Think of this as proactive, high-level performance consulting where you seek out the senior leaders and engage in good, open discussion to explore the possibilities for learning to help them achieve their goals. Learning will not always have a role, but at Caterpillar we were able to contribute to each of the CEO’s top seven goals each year.

If learning can make a contribution, then you need to reach agreement with the goal owner (like the SVP of Sales) on what the learning program will look like: target audience, timing, learning objectives, type of learning, design, etc. More than that you and the goal owner need to agree on measures of success (like the impact of learning on sales) and on targets for key efficiency and effectiveness measures to deliver the agreed upon outcome (like impact of learning). This would include agreeing on plans for number of participants, completion dates and rates, learning (level 2), and application (level3). This needs to be bolstered by agreeing on roles and responsibilities – what each of you needs to do to deliver the planned measures. For example, how will the goal owner communicate the importance of the learning before the program and reinforce desired behaviors after the program. (We had a written roles and responsibilities document at Caterpillar signed by both parties.)

Second, once the program is underway, you will begin to receive monthly data on the measures you and the goal owner agreed were important. You will need a monthly management report (called a program report) to compare year-to-date results to plan. If you are not on plan, you need to understand why. Perhaps it is just a matter of timing (for example, it took longer to launch than planned) and left alone the program will get back on track and meet plan expectations. This is why the forecast for how the year is likely to end is so important. If the forecast shows you delivering plan, no further action is required. However, if the forecast shows you falling short of plan by year end, then you need to consider taking corrective action as soon as possible. This may involve actions such as redirecting resources toward this program or coming up new plans for the goal owner to reinforce the learning.

Our focus so far has centered on what we call strategic programs. These are programs directly aligned to the goals of the CEO. However, there are typically other programs of great importance, in some cases even more important, than strategic programs. Examples would be onboarding, basic skills training, leadership, compliance, etc. The same thinking applies. Start by creating a plan for each program with specific, measurable goals. Then execute the plan throughout the year with discipline to deliver the plans.

We have just discussed what it means to run learning like a business from a program perspective. The same discipline, however, can be applied to your CLO’s initiatives to improve results across all programs (like improving the overall application rate) or to improve internal process or system efficiency or effectiveness (like improving customer satisfaction with the LMS or reducing helpdesk wait time). In this case, the CLO needs to set specific, measurable goals for each measure she chooses to manage. These measures are captured in the monthly operations report which she and the directors can use each month to determine if the initiatives are on plan and likely to end the year on plan. If not, they need to decide what action to take.

So, this is what “running learning like a business” means to me. This the hard work of managing L&D with the same type of discipline your colleagues use in sales or manufacturing where they set annual targets and do the best they can to meet those. For many, this is a very different way of managing than they do today. Most have plans of some sort, but many are not specific and measurable. Even some who do have good plans do not execute them with discipline by using the monthly program and operations reports to compare progress against plan.

If you are managing this way today, congratulations! I know you see the value in this and ask you to share your stories with others so they can be inspired by your success. If you are not managing this way, consider giving it a try. You can start small. Try it for one program. And/or try it with the CLO to better manage a short list (3-5) of measures for improvement. I am convinced that running learning like business was key to our success at Caterpillar, including support and funding from our CEO and senior leaders.

If you would like to hear more about this concept, join me for a panel discussion on March 23 at 4.15 ET hosted by Corporate Learning Week.

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