Learning and Development professionals need to view ROI (return on investment), specifically with its “levels,” as a theoretical ideal and not a practical exercise worthy of the effort. For more than 15 years, ATD’s State of the Industry surveys report only 3 percent of all companies try to evaluate training beyond Kirkpatrick’s Level 2. It’s time to step away from “it’s looked good on paper for 30 years.”
The core dream of ROI is that you can accurately measure training’s impact on the business. For those of us in the insurance industry—where “data” is king, including oodles of collected but unanalyzed data—this can be a particularly challenging concept to express: “We know this training is the right thing to do for our business, and we can’t quantify how much it’s the right thing.” Practices that improve any kind of learning impact already exist in L&D’s toolkit.
Go back to Robert Mager’s classic performance analysis flow chart, or Allison Rossett’s book, First Things Fast, and especially Rob Brinkerhoff’s High Impact Learning and Success Case methodology. The message of all three: Ask better business-outcome questions up front, be assertive and clear about expectations with your client, and be as concrete as possible about what’s reasonable to expect of learners. Need more evidence? Here are a few practical reasons and big-picture arguments against ROI.
- ROI on training programs involves too many variables to result in a high level of confidence. All investments are risky to some degree, and even more so when people’s egos and behaviors are involved. Say you present ROI data on a successful training program and point to Sam, who went through the program and was recently promoted. Maybe that training was exactly what he needed when he needed it, and he received effective coaching from his manager to apply the new skills or behaviors. Or, it could be that Sam just learned he has a new baby on the way and is now worried about doing well in this job, so he’s a little more “engaged” at the moment. Try to prove it was the training.
- Beyond black-and-white technical training, ROI is not “proof”; we can show evidence but not proof. Discuss up front whether the time spent training is worth the investment, including what it takes for people to absorb and apply new behaviors.
- Chasing ROI isolates rather than integrates the development of people into the business. Some managers are better at developing their people, but pushing ROI is the perfect excuse for a manager who sees training as a waste of time. When L&D is forced to carve out ROI (sometimes code for “prove your worth as a function”), it belies the goal of an effective partnership with the business. L&D teams truly in touch with their business clients are not just order takers; all players should know how everyone contributes to ultimate business outcomes.
- The “I” in ROI is for “investment” so start there: Is this topic or program the right thing to invest in? If yes, then the investment has passed its first hurdle. Is it focused on a business outcome we can articulate and agree on? If it not, move on . . . there are plenty of other priorities. If the organization has an L&D function, presume a level of trust and build your execution and business credibility to extend that trust so L&D professionals can do what they do best without the ROI nonsense.
- Ask the “5 Whys” or “How will you know?” questions. It has to make sense up front, to the business: Does it meet a business need? Does your client understand what can and can’t be done? If not, that’s your first training assignment. Talk about what you would see or hear differently if training were successful. Ask how it contributes to saving or making money. And ask how the client is preparing themself and their managers to coach to new skills or behaviors post-training.
- An aspirational partnership result sounds like this—Business: “We wouldn’t have achieved our business goals without the work of L&D.” L&D: “Thank you for involving us from the beginning, being a thoughtful partner, and engaging your people in their development.”
Use L&D’s time more wisely than chasing ROI. Regularly use SMEs, case studies, and role plays pulled from on-the-job experiences. Offer coaching to managers, including coaching on recognizing efforts to apply newly learned skills. And follow up with learners in their own settings (staff meetings, work visits, and so forth) to see how things are going. What’s sticking? What’s being left out? How does that inform your next effort?