As we prepare to weather a recession for the remainder of 2020 and next year, many projects and programs have been reduced or, worse, eliminated. Learning professionals must be able to show the value of programs, projects, and initiatives to prevent further cuts from disrupting our businesses. The best way to survive and even thrive in the current economic downturn is to actually measure the impact and ROI of your major programs to ensure that these programs deliver the business results that executives and sponsors want and need.
The new normal
Amid the pandemic, the pressures and challenges are vivid and real and can be condensed into these important realities.
There is pressure to curtail or eliminate programs. Executives will continue to ask about the value of programs, and in most executives’ minds, the value is the impact it is having on the organization. For expensive projects, some executives will ask to see how that value translates into monetary benefits compared with the cost of the project, which is ROI, a key metric for top decision-makers.
There is pressure to connect major programs to the business. Key funders, sponsors and supporters expect you to be relevant and drive important business measures. Whether in government or business, there are always business measures. These are often key performance indicators for the top of the organization, as well as throughout the organization. Your major programs will need to connect to those important measures credibly and efficiently.
You have to do more with less. With limited budgets and fewer resources but greater expectations, you must be efficient and effective with your processes to make sure that you can deliver value with minimum investment.
Soft programs are more at risk. The so-called “hard projects,” those connected directly to production, quality, sales, logistics and IT, have less risk because the value is sometimes obvious and the benefits are easily recognized. The soft projects will be in a more precarious position. Projects involving culture, change management, leadership, communications, empowerment, customer service and engagement may be at risk because their values are not clear to executives and the owners of those projects may have not taken the steps to show the business value very clearly.
Forecasting ROI before implementation will be a common approach. The best way to obtain approval for a new project is to conduct an ROI forecast, showing the expected monetary benefits compared with the projected costs. The challenge is to make sure that this analysis is credible and conservative. In an ideal setting, the ROI forecast will be less than the actual ROI in a follow-up evaluation. This confirms that the forecast was credible and conservative.
The journey to business results involves the entire team and not just those involved in measurement and evaluation. In the quality field, there is a saying: “You cannot inspect your way to success. You have to change the system to deliver quality.” The same is true for L&D. You cannot measure your way to success. Measurement and evaluation uncover weaknesses in programs and processes, which means that changes must be made. These are often changes that spread throughout the program cycle and across different roles and responsibilities. It is difficult for the evaluation team to facilitate those changes. Therefore, it is best to design for the results you want and share the challenge and responsibility to do that with the entire team. A team effort is truly needed to deliver the value of your function. Important new programs should start with why, a business measure. And the proposed program must be the right solution. There should be smart objectives, not only for reaction and learning, but for application and impact. This provides the focus you will need to design for and deliver results.
Virtual learning must be effective. With so many learning programs now shifting to virtual delivery, we need to ensure that it is working, particularly at level 3 (application), level 4 (impact), and maybe even level 5 (ROI). Unfortunately, there is a problem with many virtual programs breaking down at Levels 3 and 4 — not delivering application and impact.
10 actions to take now
This situation requires recalibration and reevaluation of how your organization delivers solutions and measures results. All key roles and responsibilities, including the latest benchmarking, technology and know-how, must be involved to be successful. More specifically, you need a new strategy for value — more precisely, a new evaluation strategy — including these actions:
1. Assess the current status of delivering results as a baseline. Be proactive and tackle the evaluation challenge. Drive the evaluation initiative, and don’t let executives drive it. When an executive requests ROI, the timeframe for results will be short, you will be on the defensive and ROI will be on the executive agenda. You want to keep the evaluation on your agenda so you can control the process.
2. Set specific goals for delivering and measuring results that involve the entire team. Goals should be set for the percent of programs evaluated at each level each year. The recommendation is reaction — 100 percent; learning — 60-90 percent; application — 30-40 percent; impact — 10-20 percent; and ROI — 5-10 percent.
3. Assign the various roles and responsibilities to make it work. Identify each team member’s role and function. In the beginning, if you take steps to start with the why with business measures, select the right solution to improve the business measures, expect success, and use that expectation in the form of objectives to design for the results, then you won’t have disappointing results at the end. It’s not just the effort of the evaluation team; every stakeholder has a part in designing for and driving the results desired for the program and participating in using the data for process improvement.
4. Build the capability of the team to make evaluation feasible, effective and successful. There are many options available to build the ROI capability your team needs. Webinars, workshops, boot camps and certification sessions are offered regularly, either in-person or in virtual formats. Books, case studies and articles are also widely available. Free tools and templates can be downloaded from ROI Institute’s website.
5. Develop simple yet usable guidelines, tools and templates to make it efficient, consistent and repeatable. Shortcuts can be applied within the ROI Methodology process using tools, templates and job aids to enhance efficiency and effectiveness.
6. Use technology in a smart way to make the process more efficient and timely. Basic technology programs and readily available software can help achieve a thorough ROI evaluation, proving that it is possible to conduct a successful ROI evaluation on almost any budget.
7. Adopt preferred practices in planning, data collection, analysis and reporting. Taking this step will provide the structure, philosophy and instruction for evaluation within the entire organization while also increasing the efficiency and effectiveness of your evaluation process.
8. Involve the management team and provide briefings, emphasizing their roles to make the program or project successful. To survive and thrive in the learning and development function, you must have key relationships, particularly with important executives and administrators. These executives support you, provide your funding, or request projects and programs. They need to see business value for what you do. Showing the impact and ROI is a great way to be perceived as a business contributor, which will help create these necessary relationships.
9. Report the results of the evaluation to all stakeholders. Communicate results to key stakeholders — reaction, learning, application, impact and perhaps even ROI data form the basis for a powerful story. Storytelling is critical, and it’s a much better story when it includes business impact.
10. Measure progress and make adjustments. Designing for results usually drives the needed results, but there’s always an opportunity to make the results even better. This involves improving the program so the ROI increases in the future. Increased ROI makes a great case for more funds. When executives see that the program has a positive ROI, it will be repeated, retained and supported.
When you update your evaluation strategy to address each step, your programs are almost guaranteed to deliver positive business results. Because you have ensured they are connected to the business, they are the right solution, everyone knows what is expected and everyone has designed for the results, you eliminate or minimize the risk of failure. And fear of results is the No. 1 barrier to ROI evaluation.
This approach places you and your organization on the path to success, shifting the evaluation process from reporting results to driving the results you want and need. For a copy of an actual evaluation strategy plan, contact ROI Institute at email@example.com.