‘Going back to the start with ROI’ by Jane Massy and ‘Learning to think like a CFO’ by Neil Twogood, Training Journal, April 2010

I have combined these two articles because neither was worth reviewing on its own but together they provide a sharp contrast and raise interesting issues.

At MTP we briefly worked with Jane Massy, when she presented at one of our joint workshops on training evaluation; we had heard of Jane and of Tom Phillips following their work on the ‘ROI’ approach which was creating interest at the time. We remained unconvinced about the originality and depth of their approach to evaluation, perhaps because, as an organisation with a strong finance orientation, we did not see the ROI methodology as sufficiently rigorous to justify that label.

This article does nothing to change that view, indeed if anything it strengthens it. There is some good advice but it is countered by much that is theoretical and difficult to apply. There is a statement early on with which we would very much agree; the belief that the role of participants’ line managers is critical to any evaluation of training and its credibility. However there is little advice about how they can be engaged; it is often difficult enough to get managers interested in supporting the training, never mind the extra commitment necessary for consistent evaluation.

At this point we move over to the second article by Neil Twogood. His approach is much more pragmatic; he believes that, in most organisations, the CFO is the person you need to understand and influence if you are to gain agreement to major investment in training; you need to present it as a business case because that is the way that the CFO will see it.

The initial thrust of the article is that the key need is to form a good relationship with the CFO, to use the right language, to lay out clearly the assumptions and to anticipate the challenges and questions that he/she will come up with; for instance the main risks and sensitivities, the alternatives, the links to strategy and business objectives. The checklist of questions on the final page of the article is impressive and comprehensive; in particular the question - what will be the impact on the business if we don’t invest? This is just the way that a good CFO will think.

But just as I was thinking that this was a welcome practical contrast to the Massy article, it fell into a similar trap by recommending that the CFO be given a crude ROI calculation to justify the investment. Much as I understand the desire to make such calculations and realise that they can look good to less sophisticated audiences, the CFO is the last person you want to give a simplistic ROI evaluation. He is likely to ask awkward questions like:

• Is this the incremental cost or the full cost and why?
• Have you included the cost of the time of participants?
• How do you know what would happen if the course does not run?
• Have you taken into account the cost of capital?

Unless you are confident to answer these questions and believe that such a discussion will add value, you should keep ROI evaluations well away from the CFO. He/she is much more likely to be impressed by an understanding of the broader business implications and the need to deliver changes in behaviour, rather than questionable financial calculations.

To read these articles go to:

http://www.trainingjournal.com/tj/2831.html

http://www.trainingjournal.com/tj/2832.html