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Calculating Return On Investment Of Your Training Initiatives

System Components That Will Generate a Positive ROI

We believe that the following program and learning system design elements can have a meaningful impact on your ability to create the infrastructure needed to generate a positive ROI in your organization. Please consider these as a starting point for your discussions of how to demonstrate that training can generate measurable improvements in both individual and organizational performance.

Management Development Starts At The Top: We understand the important responsibility your executives have in developing the management talent of the company. Executive involvement and support are essential to creating a learning culture. We have found time and again that the management and leadership strengths and weaknesses of the executive team are reflected in the practices employed by managers through out the organization. Therefore, if executives fail to address their own development opportunities and persist in using practices that undermine performance, it is nearly impossible to make the necessary changes with managers lower in the organization. They will tend to mirror the practices used by those higher than they on the organizational ladder. This has been confirmed numerous times from data obtained through organization-wide management and leadership surveys that we have conducted.

Further, when senior executives are themselves accountable for organization-wide improvement in management performance, they will spend the time and devote the resources to get results. When this responsibility is delegated i.e. abdicated, it is very difficult to gain the support needed to create organization-wide commitment. Training departments can provide the tools and infrastructure to support the executive team's goals and objectives, but they cannot bring about enterprise-wide improvements in management performance alone.

We believe, therefore, that it is essential to offer an integrated multi-level management training curriculum so that senior level managers participate in the development process and are in position to guide and support the development efforts of their direct reports. Further, organizational survey data must be collected and presented to the executive team so they understand the scope and nature of the development gaps of their management team and are in position to take appropriate action to close the gaps between their most effective and least effective managers. We believe that it is essential for your senior executives to play a leadership role in creating a learning culture in the organization. They must set the climate for this change and must hold managers at every level accountable for making improvements in their management and leadership practices.

We believe that your training department and your executive steering committee needs to collaborate and define the leadership roles that your executive team will play in this process. One idea, for example would be to seek a senior executive to "sponsor" a particular course. The executive would be responsible for making sure the program relates directly to the company's business goals and that participant Action Plans are implemented and progress measured.

A Diagnostic Approach Ensures That Participants See The Need To Change, Are Committed To Training And Are Prepared To Direct Their Own Development: A key philosophical underpinning of effective management training is that all development is really a matter of self-development. We have found that this methodology encourages participants to see the need to change and to take responsibility for their own development. Therefore, you may find it worthwhile to utilize assessment instruments to provide people with feedback on their work practices so that they can better understand the impact their management, leadership, or team practices have on the performance, motivation and development of others. These survey tools are essential to the process of self-directed development.

Further, we believe that managers should attend training only if they 1) believe that they have a development need, 2) are committed to addressing the development need and 3) think that both their effectiveness on the job and their work unit performance will be enhanced if they develop the specific competencies covered by the training program. As such, we recommend that candidates for any given program be allowed to decide for themselves whether to attend or not. This step will ensure that every participant is committed to the training process. In this way, your company will not waste its resources forcing every manager to attend a given training program even when certain managers are not committed to the process. We have found that too many training organizations take the "one shoe fits all" approach or believe that they know what every manager needs without first assessing their current competence or determining their willingness to learn. Training departments in general need to move away from a "sheep dipping" approach where all managers are required to move through a prescribed core curriculum to an approach that focuses on identifying competency gaps of managers in order to determine what courses should be taken. The first step must be diagnostic rather than prescriptive. Managers should not be required to attend specific programs. Rather, training courses should be offered as part of each manager's "Individual Development Plan" and where every manager works with his or her immediate supervisor to determine which programs might be appropriate to attend.

An important step in the process, therefore, is to identify the core competencies required to succeed in your company and to assess each manager's development needs so that the company's training resources are used to support the development of your managers by enabling them to enroll in those courses where they perceive they have a development need and when they are ready to address it.

Customized Program Materials Help Link Management Development To The Achievement Of Organizational Goals: The more directly training objectives are linked to the achievement of current organizational goals the greater the alignment will be between the company's operating objectives and its' training initiatives. Most training programs are focused on specific behavioral objectives that may only indirectly relate to the organization's business goals. Programs can successfully support the achievement of organizational goals if their objectives are modified and custom case studies added to the content. These custom cases and related exercises help participants tie the development of important workplace behavioral objectives to the achievement of key business unit objectives. This level of customization does not have to be extensive or costly, but it will further improve your ability to demonstrate a positive ROI from training. The key outcome of this effort is that participants are better able to generate Action Plans that not only help them develop a core competency to enhance their personal effectiveness on the job but also help them exercise that newly developed skill in order to address specific business issues and improve organizational performance.

We have found that providing participants with custom course materials helps them better understand how the content of the training program applies to them. Customized program materials are a great aid to ensuring participant understanding and acceptance. Most importantly, they build a bridge from the classroom to application back on the job.

Training Contracts Between Participants And Their Immediate Supervisors Hold Participants Accountable For Making Improvements In Their Performance After Training: Quite simply we recommend some form of "Learning Contract" be developed. These agreements between participants and their immediate supervisors lay out what each will do to ensure that there is a payoff from training. They reach agreement on the roles they will play, the steps that they will take and the results they expect to achieve. These contracts serve as personal commitments and a road map of what the participants and their immediate supervisors will do as a result of the employees' time away from work.

We recognize that "Learning Contracts" need to be crafted in a way so that they pose no unnecessary administrative red tape for the two parties. We do believe that they will help clarify expectations and further raise the prospects that the Action Plans developed in your training programs will be reviewed, approved, implemented and supported back on the job.

A Clearly Defined Role For Managers To Play In Reviewing And Approving Action Plans, Following-up And Supporting Plan Implementation and Measuring Progress Provides A Level Of Organizational Support Required To Achieve Results: If everyone is committed to demonstrating that training leads to measurable performance improvement, then you must be prepared to put in the infrastructure to ensure that learning is applied on the job and the results achieved are measured. Two important aspects of this are 1) managers need to be told that they have a critical role in the process and that they are expected to support the improvement efforts of their direct reports and 2) that they need to prepare summary reports of results achieved so that the organization is able to measure the ROI from its training endeavors.

We recognize that this process cannot be seen as bureaucratic or frivolous. We also know from experience that line management must be responsible for this effort. Time and again when training departments are "delegated" this function, they are really "left holding the bag." Management development is a management responsibility. Making improvements in day-to-day business performance is a management responsibility. Training departments should be responsible for designing and facilitating the reporting system. When results are submitted, training is then responsible for analyzing them and presenting a summary report of the organization's findings.

We believe it is important for training departments to develop a reporting system that has the buy-in of management, is easy to administer, builds commitment to the process and enables the organization to capture the data needed to determine its training ROI.

Readministering Diagnostic Instruments Communicates That Management Expects Participants To Address Survey Feedback And Make A Concerted Effort To Adopt Behaviors That Will Increase Their Effectiveness On The Job: While the Action Planning process will yield many hard financial benefits, we also expect many non-financial benefits to accrue from Action Plans that deal with participant survey data. An important step to take determining whether your training efforts have merit will be to analyze survey results over time. A review of this longitudinal data will help determine the extent to which your management team as a whole improved its management and leadership practices. A comparative analysis of survey results over a period of one year will quantify improvements made and point out remaining gaps that need to be addressed.

We believe that working with your management team to readminister your diagnostic surveys over time will help provide critical data on results achieved and actions that need to be taken to refine or redirect your training and development initiative.

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