A question that I am often asked is how trainers
and organisational development specialists can determine the impact that training has on an organisation's bottom line. In
particular I am asked how any return on the investment made in training (and education, development or self-development) can
best be quantified. These are very good questions, and for those people anxious to ensure that their role in an organisation
is seen as making a vital contribution. But the trouble is that we can't quantify organisational achievements against
training activities. There are simply too many factors which contribute to whether or not an individual or team makes
a positive impact on the achievements that an organisation makes - and not all of them have anything to do with the training
that these people receive.
many gurus and government sponsored researchers who contend that training results in a positive return that can be measured
in large percentages or thousands of dollars returned to the company, there is no way in which a training course can be seen
as anything more than a factor in such outcomes.
Sure, turning a widget better, or more often, or to a greater tolerance, might result in an immediate effect which
could be measured in dollar terms, but so what? Who is going to stick their neck out and say that the trainee will continue
to do this after the training staff have gone home? Furthermore, who is going say that turning this widget to the required
tolerance or whatever is not going to cause further problems down the track?
For example, teaching somebody to clean up after themselves might save the company
money in the immediate term, but if the cleaner's union takes their members out on strike as a result then where are
the long term savings?
The thing is,
training only works in the immediate term. Over the longer term there are any number of events, factors and influences which
either change the way the trainee does things (including the warning, heard too often, when they return to the workplace that:
"That's okay in training, but this is the way we do things around here!"), or sees no change occur at all. And if
this is the impact you're trying to achieve, and you can prove that your training course has achieved it, then you've come
up with a positive ROI. But somehow I think you are the kind of trainer that is looking for positive, real, observable and
therefore measurable, results.
And when you think about it, the solution
is so obvious that it could be termed a BGO (Blinding Glimpse of the Obvious).
And here's why . . .
There are two issues often overlooked in the literature about
ROI: Firstly there is a failure to point out that quite often change comes about in an organisation when no training has occurred,
or even when the wrong training has been conducted and people get on and do the job correctly anyway. The second issue is
the question of what, exactly, has been the catalyst for change? Is it the training event or is there some other element
responsible for what goes in an organisation?
First things first: Does training cause positive change?
We know that negative change can occur when the right people are trained to do the wrong thing, or
the wrong people are trained even though they may be trained to do the right thing. We also know, thanks to the Hawthorne
Experiments, that positive change can occur even when the focus is on some other part of the organisation. In other words, change
occurs even though the right people received the wrong training, or the wrong people received the right training, or people
who were not part of the group being trained take it upon themselves to do their work differently. It can be either positive
change or it can be negative, but change happens and often for the darndest reasons. The question is, why?
Because change - positive or negative - occurs regardless of what you do it is difficult
to pin down exactly why it occurs and how it was caused by training. Furthermore, unless your aim is to have a person do something
differently at the end of a training course (note - 'at the end', not 'as a result of') then neither you nor I, nor any of
the so-called experts, can guarantee that this person will have any far reaching impact on their employer's bottom line. We
can't even guarantee that they're going to apply their newfound skills and knowledge back on the job so how can we have any
confidence that we're going to have an impact on the financial aspects of the organisation as a whole?
The answer can be found in whether or
not the purpose of the training has been achieved. The ‘purpose’ of a training event is not the desired training or learning objective. The ‘purpose’
of training can be something as simple as giving staff something to do during quiet periods, or (as
is too often the case) carrying out the training because it is legislated that the organization does so. Most often, however, the
‘purpose’ of any training is to enhance the organisation’s bottom line, its profits if you prefer. And it
is this bottom line that is measured when we conduct an ROI. The trouble is, the traditional approach to training and ROI
analyses can’t show a link between training/learning objectives and the training purpose and here is why so many of
these approaches don't work - regardless of the fancy numbers the analysts display during their PPT presentations.
When the link between the two is severed the purpose of the training
won't be achieved even though the learning objectives may have been. For example, if the purpose of the training is to increase
profitability then unless the people who can actually impact upon that profitability, or the skills that they are taught are
those which have such an impact, then nothing will change. Of course smart people will know where the shortfalls have been
in their training and they will teach themselves what they need to do to achieve the overall purpose of the training (and,
remember, the training objectives may or may not have been achieved) so profitability may occur anyway, but this has not been
as a consequence of achieving the training objectives. In fact research has shown that in some professions up to 60% of the
skills and knowledge needed in the workplace have NOT come about because of training - they've been learned, on the job and
to the standard required in their particular workplace. It is for this reason that many organisations are successful even
though their people have never been trained (by the organisation).
Good people just get on and do good things - include reviewing on an ongoing basis what they know
and can do, what their job demands that they know and can do, and how to bridge the gap between the two. The thing is, is
this what we teach them when we run training events? Sadly, the answer is quite often no which is why some organisations never
progress even though their training budget is well stocked each year.
It is an historical fact that good organisations have gone out
of business even though they have invested heavily in training. Look at the automotive industry in Australia. This industry
has been one of the largest contributors to the national vocational education and training system since its earliest days
but over the years has laid off so many people that it is a small wonder that we have an industry left. Even now there is
talk of protecting the industry through 'encouraging' consumers to trade in their cars every 10 years.
Clearly the training that has been conducted in these industries has either been wrong or it has been aimed at the wrong people.
Either way financially they are going backwards even though they are strong supporters of the national VET system and spend
hundreds of thousands of dollars each year on training. Other industries can benefit from heeding this leasson.
Second point: What exactly is the catalyst of change occurring as a result of training?
Something that ticks me off in every discussion about training
ROI is the way people concentrate on the effectiveness of the training event and not the trainer. It is almost as if they're
saying that to be trained is to be competent, and it really doesn't matter how the training comes across. If the training
or learning objectives are achieved then that is all we need to know.
This is bunkum. In fact, by concentrating on the training event is to overlook the critical role played
by training functions - that is, the collective competence of the training manager, learning supervisors, trainers,
mentors, coaches, training environment, admin staff, training resources, handbooks, manuals, libraries, etc. etc. And yes,
scoff if you will, fresh biscuits at morning tea time and air conditioning that is ‘just right’ do play an important
role in whether or not trainees are capable of acquiring and implementing new skills and knowledge back on the job.
We just have to understand the role that all these play in changes
that occur in the workplace and the positive return that organisations can achieve through their intervention.
Up until the advent of the competency-based movement in the late
1980s I used to struggle with a way of more accurately identifying the link between training/learning objectives and the business
and strategic objectives of the organisations for whom I worked. It was while I was working in the UK on their NVQ system
that I was hit by a BGO (see above) after which the link between the two was so obvious that I'm surprised I couldn't see
it before then.
The link is not direct
(which was the problem I was trying to grapple with) and unless you're experienced in strategic planning you might not see
it at first, but it is there. And, yes, it is observable and therefore measurable, but more on that shortly.
What I found then, and what I work through with
my clients now, is the way in which training/learning objectives can be tied tightly to an organisation's vision and through
this to its business and strategic aims. This means that once the training/learning objectives are being achieved then achievements
in the business and strategic plans follow, and these can be observed and thereby evaluated and measured. It is all in how the training/learning objectives are defined
and the role that the entire training function plays in achieving them.
The simplicity of this system really surprised me - but not as much as the fact that all of the discussions
on ROI overlook it. What's more, it isn't as if this approach is a state secret or anything. When I was pursuing my Ph.D I
found mountains of information about it, but not in the literature which discusses training or education. And that came as
a huge surprise. It is as if trainers and educators forget that their client group doesn't read the same material as they
do - just as, for example, a dentist who doesn't take any notice of what his/her clients eat. (But, then again, modern and
so-called ‘world best’ training for trainers today doesn’t encourage this anyway.)
I started applying this system at both national
and organisational level and was pleased to find that being more careful about the way in which training/learning objectives
are written (and, in VET systems, the competency standards which provide invaluable guidance for the development of such objectives)
I was able to both directly align them with the business and strategic objectives of governments and businesses, and demonstrate
where and how they were being achieved. In
other words, I was proving that there is an ROI in training - it is just that it can only be proved by ignoring the traditional
ways of doing it.
going to reveal any more here about what I do because, after all, I am a consultant and get paid very well for providing guidance
on this. What I will say, though, is that the traditionalists (ie, those who continue to stick to Kirkpatrick's and Phillips'
models) are very quick to raise objections about the way I've gone about doing things. They try, generally using quantitative
research methods and data analysis, to prove that Kirkpatrick's Four Levels of Evaluation and Phillips' ROI can generate numbers
to prove that a positive ROI is being achieved as a result of training. And the business accountants might be greatly impressed
('cos they all love numbers), but if the bottom line isn't improving and the company isn't moving forward then nothing has
been achieved. Worse - if the company isn't moving forward as fast as, if not faster than, its market rivals then it is actually
moving backwards. Just ask the Australian automotive industry.
But fortunately, for me and my clients, we have been able to conclusively prove how my approach works
and their's doesn't. I’ve also been able to save – or generate – many millions of dollars for my clients
while doing so.
Then again, I am very
rarely asked to prove that my approach to training works. The results are so obvious.
Now, if I can just get more people to listen .