In any business, understanding your return on any particular investment is paramount if you are to assess it’s effectiveness to generate bottom line business results and learning and development is no different. About 12 years ago, whilst I was working for PWC. As part of the learning & development team we got into the concept of Return On Investment in Training (ROIT) and we found that, even using conservative estimations of value and extremely comprehensive estimations of cost, good training delivered several multiples of value. But the numbers were always estimations, and so ROIT perhaps never gained the traction within the function that it perhaps should have.
For the last 5 years I’ve been working primarily in ‘experiential learning’ programmes, i.e. those where participants receive facilitation and coaching against specific learning goals, whilst working on real live projects. These projects are sometimes within their business and sometimes in the community, sometimes both – but in call cases, there are real stakeholders who are expecting real results, quite apart from the participants’ learning. These programmes have been orders of magnitude more effective for participant learning and development than any classroom training, simulation or case study I’ve ever worked with.
As a result of the fact that participants are working on live business projects, they simultaneously achieve learning outcomes and generate revenue and/or cut costs. In other words, as a function of their L&D programme, they’re directly impacting the bottom line of their business. In the case of one client I’ve been working with for a number of years, they believe that their experiential learning programme has achieved a return on investment of over 450%.
There’s a ‘win-win-win’ here. Experiential learning programmes (1) are orders of magnitude more effective than other learning programmes, (2) directly boost the bottom line and (3) are clearly and directly measurable in terms of ROI, as opposed to being estimations. The old ROIT methodologies used back in the late ‘90s were robust – however, perhaps the weakness in uptake wasn’t in the methodology of measuring the ROI, but in not using experiential learning in live projects as the basis for our programme design.
- To what level of accuracy are you able to measure the financial return to your business as a result of your learning programme?
- When looking to design (or even redesign) your learning programme(s), to what extent do you and your suppliers include experiential learning?