There’s no doubting the ROI generated by L&D initiatives, but only a few organisations have taken its true value to heart, writes Barry Johnson
Few people would disagree with Dutch business theorist Dr Arie de Geus, who once proclaimed: “learning is a critical organisational competency.” But how many organisations have actually committed to reaching that aim – let alone reached it within every one of its departments and functions?
It is clear that in elite organisations the value of learning has been measured and determined to be worth the investment. How this measurement is done varies with – and sometimes within – each organisation. While no single method appears to be best, it does appear that the value of the learning outcomes must be measured and defined by the businesses themselves.
Consulting giant Accenture, for example, undertook an independently verified study into the ROI of its own L&D programme, concluding that “for every dollar Accenture invests in learning the company receives that dollar back plus an additional $3.53 in measurable value to its bottom line—in other words, a 353 percent return on investment in learning. The ROI study made it clear that enterprise learning is a strategic initiative of the highest importance.”
A learning ethos pays for itself: it is an investment. In order to maximise that investment, L&D must be integral to the company’s culture, reinforce the company values and, through that, consolidate the ‘bottom line’. Simply put, trained people make profits.
Organisations face rapidly changing technologies, pressures from international competition and the challenge for talent or even for basic skills. So perhaps we must seek a better way to implement learning.
This revolution has been around for a long time. Peter Senge, a senior lecturer at the MIT Sloan School of Management, described learning in his book, The Fifth Discipline, as “one of the defining aspects of being human. Truly profound learning experiences change who we are – we change through learning. All learning involves thinking and doing, action and reflection. Learning changes what we can do [and] it is always active.”
Meanwhile US futurist Jay Cross– who popularised the term ‘e-learning’ – has concluded that only 10 to 20 per cent of formal organisational training transfers to the job. But, he says, informal learning– which usually happens without design or strategy – accounts for about 80 per cent of organisational learning.
So what is the magic solution? Sadly, there isn’t one yet, as much more work still needs to be done in this area. Chris Argyris’ theories of single and double loop learning give us a clue. The only question is: how do we put the theory into operational reality? The type of shift from the scientific reality of neuroscience to the reality of organisational learning that we have already seen is now seeping into L&D units. The future is now for L&D.
Barry Johnson is a non-executive director at Learning Partners Ltd.