This is
not to suggest that the article is completely without merit. But it is more about selling the idea of
training to stakeholders than it is about evaluation. It starts off with an equation – ‘ROI = (V1 –V0)’. This should not put off those who find such
equations too complex; it is really an obvious point dressed up as a
mathematical formula. V0 is the value of
the business now, V1 is the value after the training being planned and the ROI
is the difference, hardly rocket science.
Apparently IBM and other IT companies ‘live and die by’ this rather obvious
equation and believe it to be essential to make a business case for major
investments. This is certainly true in
principle but hardly a great revelation and it does not address the key issue
of how that difference in value is isolated and evaluated in a training
context.
So what
is there in the article that is helpful?
The main point - sometimes disguised in language that masks its power
and simplicity - is that, during hard times, training budgets have to be
justified and sold effectively. The good
sales person will be aware of the triggers that engage those who control the
funds available. And the best way to convince
most senior people that the investment is justified is to put pound or dollar
signs on the benefits.
Apparently
the author’s organisation has been collecting data on sales people over a long
period, to determine what differentiates the great from the good. The conclusion is that great sales people
focus on value to the recipient, which apparently most HR and Learning
professionals fail to do. Because we may
have reservations about the validity of ROI calculations, we do not bring them
into the key conversations around training investment.
It has
to be admitted that the author has a point here. The cynics – or realists?: - may have serious
doubts about the validity of pre or post ROI calculations in a training context
but this should not prevent them from talking about likely benefits and their
relationship to the investment. The
even more powerful argument is that you will achieve this much more effectively
if you understand the key performance indicators of those whom you are trying
to convince, preferably measures that are easily quantifiable. The ‘conversations with customers’ will then
be much more focussed and positive.
The author
argues that the essential need is to initiate a dialogue with key stakeholders,
identify the value generating KPIs on which they are measured and encourage
them to think in terms of value creation.
The conversations should avoid mentioning training directly but instead
focus on the ways in which the behaviour of participants will be changed. These need to be narrowed down to two or
three variables which should be the focus of the conversations. There must also be an understanding of the
blockers and the challenges that are likely to get in the way.
All this
does not mean that ROI has to be proved; it means that the stakeholders’ eyes
have to be opened to the potential benefits.
You do not need to promise that every participant will deliver a return;
instead you might say that ‘it only needs one person to gain a new customer or
make a 1% efficiency improvement to pay for this course’. The author suggests that the use of ‘what if’
scenarios is the best way of making this point, though the long and rather
simplistic conversation contained in the article feels more like a space filler
than a genuine example.
My
overall assessment is that this article has some useful tips for those who are
trying to sell investment in training to sceptical and reluctant stakeholders,
in particular how to position conversations around the benefits rather than the
costs. It does not say anything about
the much more difficult task of proving at a later stage that these benefits
have been delivered, without which there may be disappointment for the
stakeholders who were convinced by the selling pitch. This is only a criticism because the title of
the article leads readers to think that it is about delivery of ROI, which is
what initially caught my attention and made me choose it for review.
So
maybe, on second thoughts, the author’s labelling of the article in very much
in line with its content; though there may be doubt about the long term value, his
short term sales technique is pretty good!
Read the article;
