New technologies are changing L&D and so should the way you approach measurement.
We've entered a new era of L&D. The rise of digital technology, intelligent automation, agile organizations, and the gig economy are some of the many trends shaping the future workforce, and the pace of change only continues to accelerate. As the workplace rapidly transforms, the pressure—and the opportunity—is on L&D to propel talent into the future.
At the same time, these shifts are enabling a host of new approaches and technologies for the L&D function, and L&D is rising to action. From personalized learner journeys with predictive recommendations to user-generated content and social sharing platforms, the L&D function of the future cultivates a culture of just-in-time and continuous learning. Traditional large-scale programs have become just one of many offerings in the L&D portfolio. So why are we still employing a program-centric approach to measuring its value?
The case for rethinking value
Bring up the topic of measurement with learning teams and many jump immediately to discussing the effectiveness of a singular learning program or training course. In a time where L&D is re-engineering catalogs to be filled with microbites and subscription-based content, measuring the effectiveness of every asset has the potential to overwhelm even the most sophisticated learning function. Moreover, the sum of all program effectiveness does not necessarily tell the whole story of the value L&D brings.
Functional scorecards are also full of the old favorites: volume, usage, and attendance numbers—essentially, how much training was available to employees and how many hours they spent away from their jobs to participate. These are a worthy effort that should likely continue to be monitored to a certain degree, but there is a catch: If the programs are not relevant to the business or learner needs, learning attendance is a cost to overall business productivity.
Finally, because L&D is positioned to foster a learning culture, a significant amount of individual learning should occur outside formal L&D-owned programs. Much of the value that is driven by the learning function of the future will be derived by the way it empowers and enables teams and individual employees to fuel their own learning. To assess its full value, the learning function needs to take a new perspective on measurement.
Adopting a new approach to measurement
Fundamentally, an L&D function's measurement strategy should serve two primary goals: to guide ongoing decision making and to showcase value to business leaders. If our approach to measurement is not designed to give us the insight we need to become better—to help us assess what is working and what isn't—we're flying blind and missing a large part of the value equation. Likewise, if our approach does not demonstrate our value to business leaders in a way that is meaningful to them, we lose support of key champions and, potentially, our funding.
At KPMG, we advocate that effective measurement begins with effective strategy and that a business-centric approach to identifying targets and measuring value drives better partnerships and greater impact. When we identify metrics in isolation, we often aren't able to generate insights that enable us to course-correct, and we struggle to find the right data sources for our reports.
As we work with our L&D clients on their functional strategies, we encourage them to begin with business strategy and to ask themselves a series of questions to help them both define L&D scope and priorities and, in conjunction, identify what success looks like and what data points they could use to monitor effectiveness. Like two sides of the same coin, we see measurement and strategy intertwined. When target metrics and key performance indicators are defined as a part of an L&D functional strategy—and this strategy is directly linked to business strategy—L&D functions are able to increase relevance exponentially and get creative with the metrics they monitor.
Question 1: What business objectives are most relevant to L&D and should guide strategic planning for the L&D function?
Business strategy is the North Star for highly effective L&D functions, and we encourage leaders to start by considering the business's direction and priorities: Where is the market moving, and what disruptors are shaping the business's future? What goals are in the annual strategic plan, and does the workforce have the right skills and capabilities for success? What elements of the business are transforming today—from large-scale technology implementations to global restructuring efforts—and what is the effect on employees? Looking to the future, where does the business aim to be in five to 10 years, and how will capabilities need to shift over time? Answers to these questions provide the foundation for functional L&D strategies to drive greater business alignment.
Question 2: What L&D strategic priorities support the core business objectives?
This process of exploring business priorities can illuminate opportunities for the L&D efforts to support the organization's strategic goals. At this stage of the process, establish high-level and directional L&D priorities. For example, in cases where transformation is paramount, L&D may dedicate resources to support enterprise-wide transformation efforts that have extensive effects on employees. In other scenarios, L&D may choose to focus on building future-oriented competencies across the workforce (such as agility, resiliency, and creativity) to help employees continuously adapt to an ever-changing work environment.
Other priorities for L&D may center on the optimization and transformation of the function itself. Is a different model and organizational structure needed for working effectively with the business? Are there operational and process improvements needed within L&D to drive efficiencies? Would L&D technology implementation or consolidation help to advance L&D and, ultimately, business priorities? What do L&D functions need to let go of (such as certain programs, courses, and ways of working) that are no longer serving business needs? It's important to evaluate the L&D function as a business and to drive the same types of operational efficiency as other areas of the organization—doing so garners greater respect for L&D among business leaders.
Question 3: What goals should L&D set to advance its strategic priorities?
Once you have set directional priorities for L&D, it is time to get more tactical and identify the specific programs and initiatives that will advance priorities. Considering the resources you have available, identify what is feasible for your organization to put in place to have a measurable impact. In some cases, you may identify efforts that require larger partnerships with the business itself to truly make it successful.
For example, a company we work with identified that its future success in the market will be largely dependent on its ability to evolve its businesses, products, and services with intelligent automation and other emerging technology capabilities (business objectives). This business priority offers a space where learning can play a key role (L&D priority), and the company is dedicating resources to establishing the Emerging Technology Academy focused on building technology capabilities among business leaders, managers, and decision makers. The academy, with blended learning and action learning features, will also advance technologists' and data scientists' ability to understand the business and to work effectively with business leaders on developing and launching new solutions (L&D goal).
Question 4: What measures will meaningfully demonstrate L&D'svalue to the business?
Finally, once you have established your priorities and goals, it's time to consider the proof points that can help you assess and demonstrate the value you aim to deliver. Consider these proof points both from a business and a learning perspective. Approaching this process in a strategic and creative way can help companies think outside the box of traditional metrics.
In the earlier example, the organization may consider tracking the number of technology initiatives spearheaded over time by the business leaders who participate in the academy cohort. If feasible, they may examine this in relation to the overall number of initiatives spearheaded by all business leaders. The company could supplement these business-centric metrics with assessments of the learner experience, which guide ongoing improvements to course design. As additional highlights, the organization could use the results of action learning efforts completed within the academy program to showcase value.
In another example, one client we worked with prioritized elevating the corporate university's brand by improving its relationship with the business, being intentional about the way its teams interact with learners, and improving the way it runs its business. The leadership team considered the proof points it could use to evaluate success and identified that it could track the number of individuals applying for internal rotations within the corporate university. As the team discussed further, it decided it was not the total of all applicants that truly mattered but the number of qualified applicants—those demonstrating strong performance in their business roles—that is the best measure. This metric is easy to track; the measurement was fully within the L&D team's span of control. And the team could supplement this with other data from the annual employee engagement survey to assess how effectively the L&D team is reshaping the brand.
A new path forward
The metrics directly linking to L&D and business priorities should offer a great start to a scorecard for the future. Take a step back and focus on telling a comprehensive story. Consider the collective value your L&D function delivers—or aims to deliver—to the business and ask, "How are we offering value that may stretch beyond program-specific measures?"
As you build your scorecard with this fresh insight, consider including metrics across the three categories outlined in the KPMG Measurement Framework to drive a holistic approach:
- Service delivery—Are we delivering optimal business value to our customers?
- Operations—How effective and efficient are our business processes?
- Talent—Are we managing our resources effectively internally? How are we affecting enterprise talent?
The future is bright for L&D, and opportunities abound to move out of order-taker roles and into greater strategic partnerships with the business. As leading companies are combining core and contingent workforces and are investing in retraining employees and providing them with new opportunities to foster innovation and drive growth, L&D has a tremendous opportunity to align with these strategies and reposition itself in the business.
To secure this seat at the table, however, it is imperative that L&D teams think about value through the lens of the business and align learning offerings to not only serve the business of today but to prepare talent for the business of tomorrow. A fresh look at measuring value can both improve your relationship with the business and set the stage for even greater growth, evolution, and transformation for your L&D function.
Guiding Principles for Effective L&D Measurement
- Link measurement to enterprise vision and strategy.
- Employ measures and methods within L&D's sphere of influence.
- Incorporate a well-balanced set of measures.
- Bring meaning to metrics through the right context.
- Aim for simplicity and feasibility.
- Drive accountability for collecting data and acting on results.