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The value of learning: is ROI still up to the task?

The question of the value of learning and the L&D work is now more critical than ever. Triggered by the global crisis, organisation are looking for efficiencies and as a result are re-evaluating their activities. If L&D does not manage to convince decision makers, it stands the risk of being one of the early contenders for execution. It has happened before, and it could happen again. 

Traditionally, return on investment (ROI) has been an instrument of choice for capturing the value of learning. Used to review and measure health of financial investments, it is perceived as a manifestation of support and commitment to the future learning projects. Whilst numbers are indeed a healthy measure of performance, I am concerned with the one-sided representation that ROI attributes to learning. I fear that a story based solely on numbers may not be enough to convince decision makers at this point. 

In the world of tangible assets, ROI is the king. The challenges arise when attempting to deal with intangible, remote or even continuous benefits. Let’s use an example of buying a car. Buying a car is often viewed as an investment due to its high worth and value. As a customer, one might choose to invest in a particular vehicle for its technical specifications as they lead to a stable performance and durability. As a result, the vehicle would require little or no maintenance suggesting high and sturdy returns on the original investment. At the same time, there are buyers for whom owning a car is more than just a technical performance. It is associated with making a statement, belonging to a community, having a feeling or even representing a status. Quantifying a perception of status or an experience is more challenging as they are defined subjectively by each owner and value placed on these attributes rests within the notion of ownership, personality and emotion. What is perceived as a value by one, may not be valued as much by another. 

I see no difference here with the L&D work. The purpose of the L&D work is to transform/ change performance through ideas, habits, mindsets, behaviours or skills and, similar to cars, learning can also generates tangible and intangible deliverables. Both are essential for a modern business that holds a “social enterprise” at its center, an organisation that combines its profit and growth with a focus on a positive and sustainable impact. ROI is involved in capturing the former by the means of the following process: it starts with isolating the learning instance, then proceeds to describing its impact in a set of measurable outcomes and then captures it using some objective data points.  For instance, an ability to write better software (training instance) affects the processing speed of acustomer support center (impact) and as a result increases its response ability by 10% (data points). The 10% increase in performance efficiency is then calculated against the costs associated with generating it, and there we have an ROI on learning.

Though the final number can be financially sound, it is only temporary accurate and, more worryingly, is applicable only to the scope originally defined during the isolation step of ROI. Consequently, the ROI value indicator overlooks remote, continuous and emotional values that can be associated with learning like a feeling of self-worth, appreciation, belonging and confidence. It is also rather shortsighted to account for the  fluid intelligence, known as an ability to reuse and apply new knowledge to other, different context or circumstances. How can L&D capture these outcomes and what kind of instrument can help integrate them into the value story about learning?  

When thinking about a possible solution, a recent conversation with the senior HR professional comes to mind. To my question about measuring the value of learning and he replied: “you [L&D] deliver the work that your CEO wants and you describe it in the way he likes. If he likes numbers, you give him numbers. If he likes quotes, you give him quotes. It is only the matter of the choice of the language … and then he added … but you can’t use numbers to convince a CEO to invest in learning even if they add up.” His thoughts made me realise that the value of learning rests within the individual perception of learning, and in order stay relevant L&D needs to engage with it directly. The instrument that could help do that is a value proposition framework.

Value proposition is an approach that comes from the marketing and it represents a statement or a promise made to a customer that describes benefits of the product/service they can expect. Moreover, it is a combination of customer-centric activities and communications that clarify to the customer ‘what is in it for me'. It is flexible enough to include an array of benefits ranging from financial and digital to emotional and opportunistic, but at the heart it holds a commitment to relieve pains and/or creates gains for the customer. This commitment is a promise that seals expectations from the product/service in the eyes of the customer and managing these expectations becomes a central concern for the product/service owner. Therefore, a value proposition is an instrument of continuous customer communication and engagement, and in my view it is the approach that would allow L&D to be relevant and convincing.

What is in it for me?

What is in it for me?

There are several prerequisites that L&D must put in place to set value proposition in motion. Firstly, there has to be an understanding of L&D customers and clarity on the kinds of needs and problems they are facing. Secondly, there has be clarity on portfolio of L&D products/services offered to the customer. Thirdly, there has to be series of personalised messages developed for each customer segment communicating what can L&D products/services do for them. These stories can be filled with facts, numbers, emotions, quotes of experiences that are relevant to customers and instrumental to their understanding of how the L&D product/services help with their professional challenges. Lastly, these stories should be written and told in a language used by the customer so that it is easy to comprehend and relate the inherent value.

In my view, adopting the value proposition approach would allow L&D to build relationships across the organisation and to position itself intelligently and strategically with the C-suite decision makers demonstrating a rainbow of values. There must be an end to the era of learning reductionism and fragmentation. The future is with the holistic and all encompassing approach that rests on customer centricity,  communication and storytelling so that the next time L&D finds itself in the Boardroom, it manages to tell a compelling story.