Capturing learning and development metrics too often entails asking the wrong people the wrong questions at the wrong time.
Line leaders are a CLO’s most important customers. They judge the spending trade-offs that determine learning’s budgetary fate, and they base their decisions on what learning leaders call level 4: Did the learning affect the bottom line?
By and large, line leaders are not happy with their learning function’s performance. According to the 2011 CEB L&D Team Capabilities Survey of thousands of line leaders, 77 percent were dissatisfied with learning and development results. A mere 24 percent agreed that learning and development was critical to business outcomes. Only 15 percent thought learning was effective at influencing talent strategy; 14 percent would recommend working with learning and development; 52 percent would not; and 34 percent were passive.
The way to succeed with line leaders is to involve them in governance. Acknowledge that they are learning customers. Gain their support by planning with them. Monitor trends in their learning and development assessments. Use their feedback to make improvements.
What’s the appropriate yardstick to measure the confidence and loyalty of line leader customers? I propose that CLOs adopt the net promoter score methodology developed by Fred Reichheld at Bain & Co. and Satmetrix.
The net promoter score measures loyalty based on one question: “How likely are you to recommend our service to friends and colleagues?” Scoring is from 0 — not likely at all — to 10 — extremely likely. An open-ended question often follows to provide guidance for corrective action.
Here’s how it works: Survey your customers. Calculate the percentage of detractors — scores 0 to 6 — and the percentage of promoters — scores 9 to 10. Your net promoter score is the percentage of promoters minus the percentage of detractors. Passives — scores 7 to 8 — don’t count.
According to Reichheld, author of the Harvard Business Review article “The One Number You Need to Grow,” net promoter score correlates directly with differences in growth rates among competitors.
Customer loyalty increases profitability. It’s less costly to keep a customer than to acquire a new one. Loyal customers who talk up a company lower the expense of gaining new customers.
Reichheld and his peers tracked more than 10,000 net promoter scores at 400 companies. This one simple number explained the growth rates in industries as different as airlines, Internet service providers and car rental companies.
Now that we’ve determined who to ask — line leaders — and what to ask them, let’s turn to when to ask.
My Internet service provider asks if I would recommend its service at the conclusion of every support call. Many online merchants ask the question immediately after taking an order. CLOs should wait six months before asking. Unlike a consumer product, it takes a while for lessons to sink in or be forgotten.
You may be wondering why net promoter score hasn’t taken the world by storm. Reichheld thinks maybe market research firms can’t find a way to make money administering something so simple. And simplicity is the score’s hallmark, so much so that it represents a phase change in how we regard metrics.
The prime directive of any organization is to create customers. The net promoter score shows how the organization is doing in terms all managers and workers can understand. It points to relationships that need improvement. Practitioners actively intervene to convert detractors into promoters. Insiders call this “closing the loop.” Some companies factor it into calculations for incentive compensation.
As Reichheld said, “The path to sustainable, profitable growth begins with creating more promoters and fewer detractors and making your net promoter number transparent throughout your organization. This number is the one number you need to grow. It’s that simple and that profound.”
Jay Cross is CEO of Internet Time Group and a thought leader in informal learning and organizational performance. He can be reached at editor@CLOmedia.com.