Learning professionals typically don’t operate like the rest of the company: They promise a world-class learning experience and ask for a budget and forecast the number of people they’ll affect.
But when senior executives are deciding where to invest within their company, the criteria they typically use is return on investment. Therefore, a disconnect exists between what the CEO needs to make valid decisions and what learning leaders present.
One answer to this dilemma resides in the Predictive Evaluation (PE) model.
By using techniques from the likes of finance and marketing, the model predicts value, measures against those predictions, uses lead indicators to stay on track and reports in a format executives are able to understand.
It assesses the business value of training in a straightforward, compelling way, and interweaves outcomes and leading indicators to move from an event-driven function to one that predicts success.
Predicting learning’s value is similar to the approach executives use to decide what equipment to purchase or products to launch. Lacking sufficient information, decision makers fail to support learning programs that have the greatest potential for producing significant value to the company.
When executives decide to spend money in learning and development, they evaluate their options on the basis of financial returns to the company. The PE approach allows companies to predict results prior to delivery, decide whether the benefits are worth the investment, and, if the choice is to move forward, evaluate and report so the corrective actions are implemented as needed.
The methodology allows companies to predict impact, adoptions, projected success rate and intentions that will enable them to begin adoption.
One essential component that makes predictions realistic is to get help from others.
Learning leaders don’t create predictions; instead, they facilitate the process, working with experts to create predictions and forecast value.
Therefore, assemble a steering committee and walk them through the methodology. A key benefit is that the steering committee owns the data and presents it to decision makers for approval.
Working with a team of experts — staff from the lines of business, such as human resources, finance, instructional designers, target audience members and performance technologist — creates what is called a given course’s “impact matrix.”
The impact matrix is a rectangular array of intention goals and beliefs, adoptive behavior examples, business results and external contribution factors that, when combined using certain rules, predict learning’s value. Since it’s created by a steering committee, it draws a direct link from learning to business impact.
The impact matrix documents the following on the course being predicted:
• Goals that participants should author during learning.
• Beliefs that participants should have upon completion.
• Adopted behaviors that employees should demonstrate on the job.
• Frequency of adoption.
• The value of the adopted behavior annually.
• External contribution factors — the percentage that other influences beyond learning contribute to results.
• The predicted impact a set of participants will produce over time.
Predicting learning’s value provides data on its merit and worth. Merit answers the question: Is the learning doing what it’s supposed to do? Worth answers the question: Does it provide value beyond the event?
Determining learning’s merit and worth — along with predicting ROI — allows executives to view it on a level playing field with other company investments. However, it’s not the silver bullet, as any forecasting activity has benefits and drawbacks.
Using a series of proven tools and techniques, learning’s value can be accurately predicted. The calculated impact is aligned with a given course’s design and provides a best estimate of return.
Armed with this data, executives can now make an informed decision: If they train, they’ll know what return to expect.
Predicting learning and development’s value in a given situation helps companies understand the significance of the financial impact that it provides to the organization. That allows executives to use financial analysis to maintain fiscal discipline and make sound business decisions.
Dave Basarab is a senior learning executive and the founder of Dave Basarab Consulting. He can be reached at editor@CLOmedia.com.
