With the first day of fall two short days away, vacation days are dwindling and summer’s official close is blowing in budget season — one of the busiest and most stressful times of year for leaders as they’re incessantly asked to do more with less. To ensure next year’s learning and development efforts have an impact on business, learning leaders will have to focus on aligning their efforts to business strategy by carefully selecting development goals. Training, action learning projects and personal and 360-degree assessments need to be aligned to the business strategy as well.
“This process helps you know where your gaps are,” said Kelly Botto, a partner at Camden Consulting Group. “It helps you evaluate what you need to do and justifies your budget. If you can bring your realizations to the leadership team and say, ‘We’re building a development culture and opportunities this way, here’s how they will make a significant impact on our company strategy,’ that will help calm nerves and give validity to L&D efforts.”
After two years of decline, more than half of CLOs reported their 2011 budgets were higher than in 2010, according to a 2011 survey by research firm IDC. Although as recently as May the trend in learning budget changes was looking even better for 2012, July data from IDC suggests economic uncertainty is returning. Roughly 35 percent of CLOs report their budgets have been reduced since the beginning of 2011. While enterprises expect to continue investment in learning management systems, assessment systems and performance management capabilities, they’re eager to use modalities that will make a larger dent in employee performance than the L&D budget.
According to Botto, when considering new development opportunities, learning leaders should consider programs that allow for on-the-job learning at less of a cost. Initiatives such as lunch- and-learn sessions can leverage internal knowledge and talent if learning professionals ask leaders with deep industry or company knowledge to run sessions that focus on specific policy or industry issues. Employees will be given the chance to learn more about the business while discovering opportunities for growth in their own careers.
“In times when the economy and businesses are challenged, people pull back in terms of information sharing, but this is a time when people need more,” Botto said. “In the absence of information, people make their own story. Being able to provide information around where the business is heading, what employees should be anticipating [and] what skills are missing is valuable to employees and something leaders should do to make sure individual contributors have a role in their own development.”
For prioritized planning and budgeting this season, Rob Prinzo, author of No Wishing Required: The Business Case for Project Assurance, recommends following this five-step process:
Step 1: Make a list of all projects, big and small. By developing a comprehensive list, leaders will feel more organized, but perhaps temporarily overwhelmed.
Step 2: Categorize the projects using the following criteria:
• Size: big or small).
• Function: business process or technology.
• Type: new project or part of existing operations.
• Funding required: yes or no.
• Level of effort: high, medium or low.
• Resources: requires additional resources or can be absorbed by existing staff.
• Organizational impact: high, medium or low.
Step 3: Determine which projects are dependent on the following factors:
• Other projects.
• Business decisions.
Highlight projects without dependencies and rate the team’s ability to influence them.
Step 4: Based on the categories and dependencies, prioritize the projects according to the following:
Low-hanging fruit: Small projects with few or no dependencies that have an immediate impact and can be achieved with no additional resources.
Intermediate projects: Small- to medium-sized projects that make a measurable impact with dependencies that can be influenced by the team. Consider breaking up long-term initiatives into smaller projects or break out the upfront requirements into separate projects.
Long-term initiatives: Medium- to large-sized projects that have a significant impact but have significant dependencies outside the influence of the projects team.
Step 5: Put it all together.
Based on all this, a leader should start by developing a plan to knock out the low-hanging fruit. Hopefully, this will clear his or her plate of some nagging initiatives and make room for larger projects when funding is available. If the leader is unable to secure funding for inevitable long-term initiatives this year, he or she should try to get a head start by working on the intermediate projects that are considered pre-work. This strategy will prepare the organization for the larger projects, reduce the overall project time-frame for the bulk of the work and spread the cost over a longer time period.
“Overall there is still a great deal of uncertainty in the business environment, and organizations are still spending cautiously,” Prinzo said. “When defining your plans and budget, make sure that the business benefits are clear, your budget is prioritized in the event that full funding is not available and that you are leveraging technology to reduce training costs where possible.”
By conducting a needs assessment and developing a roadmap that links leadership development to the future state strategy, leaders will have the basis for future budgets that can be adjusted based on actual leadership development executed against the plan.
Ladan Nikravan is an associate editor of Chief Learning Officer magazine. She can be reached at lnikravan@CLOmedia.com.