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February 2011
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TD Magazine

Organizations Lag Behind in Measuring Learning’s Value

T+D FEBRUARY 11 // Intelligence //

Organizations Lag Behind in Measuring Learning’s Value

By Phaedra Brotherton

A new survey shows that more than half of organizations aren’t linking learning to financial or business outcomes, but they are interested in learning how to do it.

After years of discussions about tying learning to business goals, more than half of organizations still aren’t measuring the effectiveness of their learning programs, according to a new survey by ESI International. When asked why they weren’t measuring the business impact, between 33 and 50 percent of respondents said that they hadn’t been asked or required to do so.

In the study, “The Measurement Dilemma: Tying Learning to Business Impact and Financial Outcomes,” more than half of respondents said that they do not measure the impact that training has on business and strategic goals. Slightly less than half (49.3 percent) said that they do measure their initiatives for business impact. Study respondents included learning and development decision makers in government and private organizations in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific region.

“I think that for years, organizations were willing to believe that if we put a learning program in place there would be some benefit to the organization and to the individual,” says Raed S. Haddad, senior vice president of global delivery services at ESI International.

But things have changed.

“Without a consistent measurement methodology and the dedication of resources to measure, organizations can’t tie learning engagement to
concrete financial and value outcomes, though that link certainly does exist,” he adds.

Organizations, however, do report being interested in tying learning to financial outcomes, but they aren’t sure how to do it or even what to measure. When asked, “what do you most require to better measure the business impact of learning,” 35.5 percent said they needed a “better understanding of methodologies to measure impact.”

Respondents also cited the lack of qualified staff, the absence of a standard approach, and lack of executive buy-in as top barriers to measurement.

For the 49.3 percent of respondents who were measuring for business impact, the top three reasons were to increase quality, increase productivity, and increase employment engagement. Specific measures, such as ROI and increasing revenue, were least likely to be selected, according to the study.

In addition, the methods used to measure the effectiveness of learning were largely anecdotal or qualitative. Haddad suggests using both quantitative and qualitative evidence and taking a “VOI” or value-of-investment approach to get a well-rounded look at training’s effectiveness and contribution to business goals.

A consistent, systematic method for collecting and analyzing data before and after training initiatives will allow for better decisions in selecting and investing in learning resources that support business goals, says Haddad.

“At the end of the day, if 80 percent of people who took a class do not think that they’ll be able to apply what they learn, or they don’t think that the training will have a business impact, you’re probably not using the right strategy,” Haddad adds.

T+D FEBRUARY 11 // DIVERSITY //

Intelligence2

Diversity Is Driving the Bus

By Ann Pace

Organizations that view diversity as a business driver perform higher than those that keep it in the compliance camp.

High-performing organizations tend to frame diversity as a business-relevant issue and have a more
inclusive definition of diversity than their low-performing counterparts, a recent i4cp study concludes. The report, “12 Diversity Practices of High-Performing Organizations,” shows how successful organizations in today’s workplace are thinking about and implementing diversity practices.

“High-performing organizations don’t necessarily look at diversity as filling the numbers or building compliance,” notes John Gibbons, vice president and general manager of research and development at i4cp. “Instead, they adopt a strategic way of understanding their market and creating an organization that reflects that market in a variety of ways, beyond how we traditionally view diversity.”

Ten years ago, an organization’s definition of diversity encompassed primarily ethnicity, gender, and disability. Today demographic change and globalization are redefining the workplace, and organizations must respond by identifying new markets and the talent pools that help to provide access to those customers.

Many companies are broadening their understanding of diversity to include social or caste affiliation, regional thought, and global experience. Twenty-eight percent of higher-performing organizations report that they include all groups in their diversity definition, compared to 15 percent of their lower-performing counterparts.

Higher performers also place greater emphasis on diversity recruiting and are more likely to concentrate training on diversity skills—specifically, employee skills and recruiting—while lower performers focus on awareness and compliance. Surprisingly, 76 percent of higher-performing organizations do not calculate a return on their diversity investments.

“It’s not that they don’t measure; it’s just not ROI that they’re measuring,” explains Eric Davis, associate editor for i4cp. “Higher-performing organizations are moving the bar to measure things that are important to them and that reflect their community or customer base, such as education, background, and culture.”

This shift away from measuring ROI was one of the report’s unexpected findings. Gibbons observes that many human resource and learning practitioners still respond to diversity initiatives with a compliance and efficiency lens. What differentiates high-performing organizations from the low performers, however, is their talent- and strategy-based impetus for diversity.

“These organizations try to establish that diversity is the way things are done and part of their culture, not another requirement to add to a manager’s job,” Davis says. “This [driver] needs to be combined with inclusion to create an atmosphere where everyone can bring their best selves to work, participate, and be more engaged and productive.”

Additional findings from the survey show that higher-performing organizations make diversity an important consideration in developing succession plans, are more likely to budget for diversity initiatives, are less likely to compare diversity metrics against minority representation in the community, and are more likely to conduct an annual CEO review th

T+D FEBRUARY 11 // COACHING //

Intelligence3

Organizations Need to Leverage Leaders As Coaches or Teachers

By Eileen McKeown

A new study finds that most organizations do not value leadership development programs that include senior leaders as teachers or mentors.

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Now is the perfect time to leverage senior executives as effective leadership development tools. With scores of Baby Boomers delaying retirement in the hopes of a rebounding economy and better retirement income, organizations need to take this time to transfer the knowledge of these leaders to their leaders-in-waiting, according to a recently released report by The Human Capital Institute (HCI) in partnership with Lee Hecht Harrison (LHH).

According to “Leaders Developing Leaders: Capitalizing on the Demographic Gift to Revive Your Leadership Development Program,” organizations should use this extra time with senior leaders to adopt a “Leaders Developing Leaders” leadership development program. According to HCI, this strategy “leverages the use of seasoned leaders as in-house coaches and teachers, with programs built on the theory that senior leaders are uniquely positioned to espouse and teach the leadership values and skills of organizations.

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Programs are aimed at building the talent leadership pipeline by compelling senior leaders to become the teachers, coaches, and mentors for the organization’s future leaders.”

However, implementing this program can be complicated. Of the five major barriers the report identified as hindering effective implementation, lack of time and lack of accountability were the clear winners. Nearly 60 percent of survey respondents reported that a lack of time is the primary obstacle that leaders face in participating in the development of emerging leaders, and more than half (51 percent) of survey respondents agreed that organizational leaders are simply not being formally held accountable for their contributions related to developing others. Lack of skills (38 percent), lack of interest (30 percent), and lack of information and infrastructure (23 percent) rounded out the bottom spots.

“When senior leaders are actively incorporated into the development of emerging leaders, companies reap the benefits,” according to HCI. “Profitability increases, productivity improves, and employee engagement and organizational culture grow considerably.”

Time is of the essence, because the report cites that more than half (52 percent) of respondents agreed or strongly agreed that current leaders in their organization plan to retire within the next five years.

“We cannot underestimate the looming talent crisis, which has been delayed, but has not disappeared,” says Peter Alcide, president and chief operating officer of Lee Hecht Harrison.

“Strong development strategies are the key to success for organizations that are serious about fulfilling their future leadership needs internally,” Alcide says. “Forward-looking companies that are competitive players in their industry make leadership development, and more specifically, ‘leaders developing leaders’ programs, a top priority. Leveraging your seasoned executives in preparing the next generation of leaders just makes good business sense.”

T+D FEBRUARY 11 // MANAGEMENT //

Intelligence5

Skills Development Increasingly Critical for UK Managers

By Paula Ketter

Recent survey finds that managers in the UK will look to improve employee engagement and their own skills development in 2011 amid concerns over lack of manpower and loss of key talent.

Many managers in the United Kingdom remain committed to improving employee engagement, with almost 40 percent planning to increase training and development opportunities in 2011. This is according to “Future Forecast: Expectations for 2011,” an annual end-of-the-year Chartered Management Institute (CMI) survey of UK-based managers. With morale suffering in many organizations, the report finds that more than 42 percent of managers say that they will be making improvements in their internal communications strategy to combat employee engagement. Another 38 percent of respondents report that they plan to enhance opportunities for training and development.

The survey of more than 800 managers exposed many challenges for organizations in 2011. More than 40 percent of managers do not believe that their organization has the right
people in place to fulfill business objectives in 2011.

Compounding the lack of skills is a lack of talent—35 percent of managers believe their organizations have lost talented people as a result of the recession, and 42 percent believe that workload is a key factor in people leaving the organization.

“The quality of our managers will be vital to building the success of this country’s economy, and professional, qualified managers will be crucial if organizations are to survive the tough times and succeed next year,” says Ruth Spellman, CMI chief executive.

“With almost half of UK managers expecting further redundancies in 2011, the case for continuing to invest in management training has never been stronger,” Spellman says. “Business leaders will need to be actively looking for alternative ways to continue to develop the skills of their staff, despite restricted budgets.”

Managers, according to the survey, are planning to develop their skills in strategic decision making, networking, coaching and mentoring, project management, and communication. On average, each manager plans on improving three skills in 2011.

“Inspiring leadership will be at a premium in 2011, and managers will need a strong skills base to develop success,” say authors Paul Hutchings and Patrick Woodman in the report summary. “Both organizations and managers have a responsibility to continue developing their management and leadership skills. But with most managers planning to develop skills connected to decision making and networking, some may be neglecting team leadership skills at a time when these abilities appear to be badly needed.”

When asked how they would develop these skills, more than half of respondents indicate continuous professional development programs. Another 40 percent are looking to in-house training, and 31 percent would seek development through mentoring.

“We know that 2011 will be another difficult year for managers,” Spellman adds. “The imperative now is to make sure that [they] are supported through training and dev

T+D FEBRUARY 11 // FAST FACT //

Employee Engagement Correlates to Career Advancement and Training

A survey finds that employee engagement needs to be part of the everyday culture of an organization, not addressed only through annual surveys.

Fewer than one in three (31 percent) of employees worldwide are engaged, and 17 percent of employees are disengaged, according to a new study of 11,000 employees by BlessingWhite.

While the “Employee Engagement Report 2011” study showed that engagement levels around the world remained stable when comparing early 2008 with mid-2010, more employees are looking for new opportunities outside their organization now than in 2008. (A 2009 Study by Hewitt Associates found that low-engagement organizations’ total shareholder returns are 44 percent below average.)

When asked what would improve their job satisfaction, employees listed opportunities to apply their talents, career development opportunities, and training as the key drivers of satisfaction. But one of the most alarming facts in the survey states that creating an environment that supports high performance—the item that has the strongest correlation to engagement levels—is the item that received the least favorable response in the survey.

Employees who trust their managers or executives are more likely to be engaged. Trust in executives has a stronger correlation with high engagement than does trust in immediate managers.

“High engagement drives the discretionary effort and innovation required for organizations to thrive in any economy,” says Christopher Rice, CEO of BlessingWhite. “Our research shows, however, that executives struggle with leadership behaviors that fuel engagement. Managers, too, are not necessarily doing the things that matter most.”

T+D FEBRUARY 11 // INFOGRAPH //

Top 10 Drivers of Employee Engagement

According to a 2010 Kenexa Research Institute WorkTrends Report “Exploring Leadership and Managerial Effectiveness,” the top 10 drivers of employee engagement are:

About the Author
Phaedra Brotherton is a trained career development facilitator and certified professional resume writer. She is former manager of ATD’s Career Development Community of Practice, and was previously senior writer/editor for ATD.
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