Meaningful ROI for a Learning Organization: Metrics to Catch the Attention of your CEO
Kevin Cookman of The Chalfont Project talked about ROI from a different perspective than we usually hear. A lot of what The Chalfont Project does is taking the principles of psychology - human behavior - and building methodologies around them to help organizations with behavior and change. One of the biggest things psychologists know is that behaviors get ingrained when the behavior reduces pain. It isn't the reward model that most people assume. One of the best aspects of this talk was that Cookman managed to talk about Theory of Constraints without necessarily using the language of TOC. I am seeing more people with this ability, from Hal Macomber to a portfolio management book.
How does this apply to organizations and return on investment? The best path to ROI is to find out what is causing pain in the organization and show how your project acts to reduce that pain. Cookman then focused on learning projects and hammered away at some dearly-held beliefs. Based on research by Nick Bontis (can't find a good reference - the graph was interesting), there is no connection between education (formal or on-the-job) and "knowledge generation," and this is consistent across a number of industries. Education also has no impact on employee morale or employee satisfaction. All of these are arguments typically made in ROI studies.
So, what is a person to do? Realize that there is no intrinsic value in knowledge or in training. The value comes out in the point of use of the experience and knowledge of the person. If the team can describe how this point-of-use value translates into value for the company, then they are on their way to describing something that the CEO will understand. Back to the first set of thoughts: if you can show how your project will remove pain for the CEO, it will get funded.
Cookman specifically talked about an assessment tool called Expected Value of an Activity (a very simple example), which company leadership use all the time to help make decisions when there are no clear answers and the information tends towards the qualitative. Cookman argues that this is the case for e-Learning and knowledge management programs. He also suggests that your finance person should be able to help you construct a good EVA analysis.
JF Goldstyn of Harvard Business School Publishing e-Learning also spoke in this session. He focused on their e-Learning process and their Four Pillars of Implementation: Strategy, Marketing, Integration & Customization, and Blending. He is also going to make a number of the HBS Publishing e-Learning tools available with his slides on the conference website.