Evidence of impact
The Learning and Development (L&D) function is under increasing pressure from business leaders to provide meaningful metrics that demonstrate its value to the organization. Over the years, L&D has measured the number of courses it offers, employee satisfaction with its courses, the number of employees they take, and how many hours people have spent learning. None of these metrics are strategic for business.
Ironically, boasting to business leaders about how much training is happening and how well people like it can be risky. The productivity of an employee while doing the course is zero. Executives may question whether excessive training is reducing productivity. So, how can L&D tap into a matrix that will satisfy its funders?
A learning and performance ecosystem is fueled by strategic initiatives and metrics that are most important for leadership. Convincing executives to invest in creating skills, processes, content and technology that enables a comprehensive ecosystem needs to be justified. The best way to build strong sponsorship to grow and sustain your ecosystem is to focus on business metrics.
Human performance metrics
Can L&D prove that it has a direct impact on earned revenue, unit sales, customer loyalty and other business metrics? It can’t. It can only provide evidence of impact. The best evidence is that the human performance metrics link data about an L&D solution, which links to the business metrics. It all starts with a clearly defined and measurable business problem.
A manufacturing company is managing its inventory inefficiently, increasing costs and shrinking profit margins. The executive in charge asks L&D if it can train people to manage inventory better.
Should L&D respond with a series of new courses on Training Needs Analysis and Inventory Management at the request of the executive in this example? Not in the ecosystem. An analysis of the need for training assumes that training alone will solve the problem. It explores what people need to know in order for them to work. It will be a traditional training response.
Ecological responses are different. It has a keen focus on applying performance analysis to focus on business issues, how it is measured (business metrics), key job roles and tasks that most impact business issues and how they are measured (performance metrics).
Performance analysis is critically important for ecosystem projects. This is the stage where L&D explores all the specific issues of business issues, including what should happen, what is happening and why. This is the stage where L&D identifies business and performance metrics and its solution will definitely have an impact.
Step 1: Define business problems and metrics (s)
Performance analysis involves talking to people at all levels, including executives, managers, and employees, on the store floor. Everyone has a piece of mosaic. The role of the performance analyst is to capture all the pieces and see what images emerge. The image describes an effective ecosystem solution and identifies metrics used to provide evidence of its impact.
The analysis begins with a clearly stated problem statement and the metric business leaders use to measure it. A good way to get started is to have a brief, concise conversation with the business leader who requested L & D’s help.
Question 1: What is the nature of problem with inventory management?
Answer 1: There should be sufficient inventory. If it is not available in time of need, it retains production. If it waits too long to be used on the shelf, it takes up too much space and can be difficult to track.
Question 2: How do we know we have a “just enough inventory” problem and how do we know when it is no longer a problem?
Answer 2: The business metric used to measure this is called “hand day”. Our goal for this metric is 3 days, no more variability than 2 days At the moment, the average number of “days in hand” is 17 It varies greatly and varies greatly depending on the factory and production line
Question 3: What factors can contribute to the problem and who can we meet to learn more about the role involved?
Answer 3: You should meet …
Through these first conversations, you are allowed to continue performing performance analysis by defining a problem, meeting business metrics, and other key players. At each meeting, you may ask to meet with additional people until you have enough information to recommend an ecosystem solution.
Step 2: Identify human performance problems and metrics
The next step is to determine what role human performance plays in causing problems, how performance is managed, and what role the work involved is involved. Your meetings with different levels of management and non-management will allow you to get answers.
Question 1: Which human performance challenges have the greatest impact on having adequate inventory?
Answer 1: The three big problems are forecasting, shipping and tracking our inventory. It is difficult to accurately predict how much inventory will be needed based on sales estimates. We ship much faster when inventory is not available when and where it is needed. We don’t always know what inventory we have because it has been incorrectly classified or misplaced.
Question 2: How do we measure these problems?
Answer 2: We have metrics for forecast accuracy, shipping efficiency and inventory accuracy.
Question 3: What is the role of work involved in forecasting, shipping and inventory calculation?
Answer 3: Plant Manager, Inventory Manager, Sales and Inventory Planner and Freight Administrator.
This information may require discussions with managers and experts in various fields. But, once you have it, you’ll find the keys to your ecosystem project: work with performance metrics that affect business metrics.
Step 3: Determine what causes human performance problems
Finally, it is important to talk to people in the affected job roles to list the factors that contribute to these problems. If the list goes on, call a panel of business experts who can prioritize their impact on performance metrics.
- People do not follow proven procedures for sales inventory operations planning.
- Ineffective and untimely communication with sales.
- Shipping vendors are not responsible for late shipments.
- People have different opinions about whether an item should be classified as raw material, ongoing work, or finished product.
In our example, the business metric is “days in hand” which describes how long inventory is available before use. Human performance metrics are predictive accuracy, shipping efficiency, and inventory accuracy. They measure what people do. Businesses own these metrics and they link between performance and business metrics. L&D can now design and implement a solution. L&D can measure the types of solutions adopted and used by people in key job roles identified during performance analysis.
Performance analysis identifies metrics that will create a chain of evidence to demonstrate the strategic impact of L&D solutions. An effective way to visualize this chain of evidence is to have a dashboard that looks at business metrics, performance metrics and L&D solution metrics side by side. By using the metrics in this way, L&D enhances its business efficiency, builds credibility with business leaders and enhances its value for the business.