Tuesday, December 11, 2007

Beyond ROI

This is a subject I have touched on during the discussions around the recent Corporate Learning Trends and Innovations (CLTI2007) conference.

My mail at the office today included the December issue of inside learning technologies, which I gather is not yet available on line (have you signed up for the LT2008 exhibition and/or conference, yet?). The lead article by Donald H Taylor addresses the issue of the value of learning and ROI.

My gut feel on the subject of ROI is that it is just too difficult to quantify. There are just too many other variables that may impact the situation - the learner may read a book in his leisure time that profoundly influences his behaviour, or he might attend a life enrichment seminar , or hear a powerful sermon at church. He might meet a new love interest, or become a parent. All these things happen outside the workplace, but have the potential to impact profoundly on his workplace performance.

And the move towards performance support will do nothing to firm up those blurred lines, as we see learning becoming more and more seamlessly integrated with the day job.

To use an expression I have probably already turned into a cliche: how do you know where to position your ROI chisel so that you can hit it with the budget hammer?

Donald's article draws this rather wonderful comparison:

Does the IT manager ever feel obliged to justify their department through a ROI analysis of the value of each PC and the time spent maintaining it? Of course not.

The message from IT is simple: "If you want to run the business, you have to invest in IT. No IT, no infrastructure, no business. Of course, we can discuss costs and other details, but the role of the department is non-negotiable."
As I keep saying: you either believe in the value of L&D for your staff or you don't. End of. Either way, you'll find a way to make the numbers support your argument.


Harold Jarche said...

I liken learning to morale. In the military, time & resources are given to the maintenance of good morale, and any good soldier can tell you whether a unit has good morale. Even though morale cannot be accurately measured, it is considered important. Morale can be measured at a macro level (good, fair, bad), and that has worked well for centuries.

My suggestions - keep the bean-counters away from the T&D function, focus on performance and watch a few key indicators.

Anonymous said...

Excellent analogy, Harold!

Good suggestion, too, only in my experience, it tends to be the bean counters that run the organisation, so they're usually the ones to whom one has to apply for budget. The progression from CFO to CEO seems to be far easier than that of C-anything-else-O to CEO.