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Learning with impact:How L&D can deliver better business results

Introduction

L&D is undergoing a quiet revolution.

As organisations strive to find better ways to translate commercial strategy into business results, L&D practitioners are the people they are turning to for help in the transformation of employee capabilities – their human capital.

Of course, many of us in L&D have always seen our discipline in these terms. The problem is that until now, organisations have largely failed to use L&D effectively as a tool to support business transformation.

Now, according to the research which we have brought together in this report, that has changed.

Increasingly, the brief is for L&D to go beyond leadership, management and skills development and take responsibility for transforming behaviour and culture to be better aligned for the future commercial direction of the business.

But to what extent is L&D positioned to grasp this opportunity? And what are the tactics that organisations trust to deliver the results they need?

These are the questions we answer in this report.

Using insight from a panel of leading UK L&D practitioners we provide an overview of the changing agenda for L&D in the year ahead and the issues organisations need to consider in order to ensure they deliver learning with impact.

Brian Helweg-LarsonFounder Profitability

64%Management skills

1 The research: The five challenges facing L&D in the year ahead

WhIch OF These AreAs hAs yOUr OrgANIsATION IDeNTIFIeD As NeeDINg sUPPOrT FrOM L&D IN The NexT TWO yeArs?

43%

26%

A new agenda for L&D

This year two thirds of organisations say their L&D needs will be different from a year ago.

While the need to adapt L&D activity to changing business needs is not new, the difference now, according to the practitioners we spoke to in the course of our research, is the extent to which expectations are shifting around the nature of support that L&D gives to businesses.

As commercial success becomes inextricably linked with the ability to transform and adapt, building the people capability to support change now tops the agenda for organisations.

This represents a substantial challenge for L&D. rather than simply responding to business change – something which this research finds is still the norm in many organisations – the function is being asked to think ahead in order to provide the people capability which will accelerate and enable business transformation. This is vital in allowing organisations to execute their new commercial strategy.

75%Leadership skills

55%Professional skills

55%Interpersonal / soft skills

change management

commercial/financial acumen

Other unspecified

Innovation / product development

32%Project

management

23%supply chain / operational management14%

4%

2 The research

FOr The yeAr AheAD, WhAT Are The DesIreD OUTcOMes yOUr OrgANIsATION NeeDs FrOM L&D?

Improve capability of managers

retain and engage employees

Improve efficiency

Improve customer satisfaction

Other unspecified

Improve leadership capability

support execution of strategy/ organisational change

Develop high-potential employees

Improve professional capability

Improve profitability

54%

48%

33%

29%

21%

9%

34%

27%

17%

3%

Leadership remains a priority for organisations

Although change features highly in the challenges facing organisations, the need to develop leadership capability is as great as ever.

Indeed, as the diagram below shows, the development of leaders and managers is the top priority in organisations for L&D, along with the professional functional skills to do the job.

But alongside this, our research shows clear signs that organisations are focusing on the job of building the capability to support business transformation.

The priorities here fall into three main areas:

• Employee engagement – developing the soft skills to ensure organisations can engage and retain the people they need to support organisational change.

• Managing change – addressing the need for change management and project management skills which can support execution of commercial strategy.

• Business acumen – targeted development of employee understanding of how a business works.

A final key point emerging from our research – particularly from our interviews with L&D practitioners – is a focus on developing leaders throughout organisations, rather than just at the top. so, in the year ahead, the top outcome organisations want from their L&D activity is for managers to have better skills to lead.

The research

WhAT AcTIONs WILL yOU TAKe TO ADDress yOUr L&D NeeDs IN The yeAr AheAD?

58% revise and enhance existing activity

55% Develop a new programme to deliver on business outcomes

39% Full review of L&D

31% More L&D capacity internally

23% More external support

21% get advice in planning

11% Increase L&D spend

6% Other unspecified

2% No change

33%It has a lasting impact on people and organisation

3 Improving the effectiveness of L&D

If delivering commercial transformation represents the future agenda for L&D, there is still a pressing need to recognise the areas where L&D is failing in its effectiveness.

here, our research found that while many organisations (45%) see L&D as critical to supporting business strategy, one it two (49%) think there is a job to do in improving its business impact.

here, L&D faces a challenge in two main areas.

• Alignment to business objectives – despite a wide acknowledgment that effective L&D activity is aligned closely to an organisation’s

business needs, 41% of organisations are failing to adopt this strategic approach to L&D.

• Effectiveness of L&D – just one third of practitioners said L&D is delivering a lasting impact on their people or organisations.

The good news is that organisations are grasping the need to up their game and take action.

In the year ahead our research found the top priority for L&D will be to improve its alignment to business objectives. At the same time, L&D functions say they will take steps to improve monitoring and evaluation of the extent to which L&D activity supports those objectives with 44% of practitioners planning to place a greater emphasis on this in the year ahead.

The research

45%

59%It is aligned to business strategy

51%We are prepared to experiment

to improve effectiveness

49%We could do more to be effective

critical in supporting business strategy

39%We regularly review and improve delivery of L&D

29%It gets the investment

it needs

26%It is proactive in prioritising

development needs23%It can be relied on to deliver

the outcomes we need

hOW WOULD yOU DescrIBe L&D AcTIvITy IN yOUr OrgANIsATION?

Better alignment to business strategy

More effective evaluation of rOI

greater use of social / collaborative learning

Wider use of elearning

Increase use of action learning

More use of smartphones/tablets for learning

Less use of classroom / trainer led instruction

4Improving the relevance of L&D

L&D functions cite a widespread lack of buy-in from leaders and managers as the main barrier to the effectiveness of their programmes, hence L&D needs to mobilise more support throughout their organisation for the services they deliver.

Although a better alignment to commercial priorities and an improved focus on impact for L&D will go some way to encouraging leaders and managers to support L&D activity more actively, this is only part of the answer.

What this means is that when it comes to designing and selecting L&D interventions, practitioners must ensure that they are better targeted and more clearly relevant to the specific issues and challenges employees face in their organisation as they go about their job on a day-to-day basis.

This new agenda for L&D is forcing a refinement and reprioritisation to the L&D mix. generic, off the shelf, tick box learning curriculums are failing to deliver, and businesses are looking at options that are more relevant and hence tailored to their specific business objectives.

WhAT Are The OUTcOMes yOU WANT FrOM L&D IN The yeAr AheAD?

44%

44%35%24%14%12%

5%

The research

Despite the increasing pressure on L&D to deliver more effective support for organisations, just one in ten L&D functions will see their budgets rise in the year ahead.

so while a large number of L&D functions already cite a lack of resources as an impediment to delivering effective L&D programmes, it is a situation that is unlikely to change.

At a time when L&D is also grappling with increasing expectations from their business sponsors, selecting the right L&D mix from the outset becomes critically important.

This isn’t just because organisations need to be sure that L&D will deliver the capability and outcomes they need. An equally pressing issue is that, in the face of commercial

Better alignment to business strategy

More effective evaluation of rOI

greater use of social / collaborative learning

Wider use of elearning

Increase use of action learning

More use of smartphones/tablets for learning

Less use of classroom / trainer led instruction

5Choosing a learning mix with business results

The research

pressure to deliver change, organisations may not have the luxury of fixing a failing L&D programme – it may simply be too late for the business.

so while our research finds that nearly half of organisations are prepared to experiment with the L&D mix, it also shows L&D functions are looking to prioritise tactics which deliver lasting commercial impact.

This means that although e-learning remains an important priority for organisations in the year ahead, there is a bigger focus on learning by doing. Whether this is in the form of business simulations which help employees understand how their behaviours impact on business performance, or social/collaborative learning, where employees work with each other to overcome business challenges, these are the elements where organisations are most likely to invest.

WhAT sTOPs L&D AcTIvITy FrOM BeINg MOre eFFecTIve IN yOUr OrgANIsATION?

Lack of support from managers and leaders 45%

L&D is under-resourced

39%

It’s too generic / not specific to our needs19%

We only deliver the bare minimum of training

18%

It isn’t aligned to future business needs18%

We have the wrong balance of L&D activity

17%

There is a lack of innovation16%

It is over-reliant on elearning15%

employees find L&D activity boring 13%

On

the

job

lear

ning

coac

hing

by

man

ager

In h

ouse

pro

gram

mes

Busin

ess s

imul

ation

s

soci

al le

arni

ng

exte

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ope

n pr

ogra

mm

es/w

orks

hops

e-le

arni

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vide

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arni

ng

69%

57%

53%

30%

24%

19%

12%

3%

One of the most striking findings in our research was the extent to which, when it comes to building the skills and behaviour necessary for business transformation, organisations turn to action learning. Our research found that just under a third of organisations (28%) plan to use business simulations in the year ahead and 15% plan to increase their use.

When we asked practitioners why, they told us they told us this was the element of the learning mix that they trust the most to deliver on L&D outcomes. This is the case even when it is delivered online as a scenario-based serious game where it was rated as the most effective form of e-learning.The confidence in business simulations was backed up by our qualitative interviewees who told us that while they

WhIch DeLIvers LAsTINg IMPrOveMeNT IN BehAvIOUr, KNOWLeDge AND sKILLs?

represent a greater financial investment, they offer superior value to organisations because of the ability to customise learning around the specific needs of the business and their lasting impact on knowledge, attitude and behaviour change.surprisingly, despite the perceived effectiveness of business simulations, the majority of organisations (72%) are failing to consider them as part of the learning mix.

The main barrier to their greater use lies in a lack of understanding of how they work – just under half (43%) of practitioners said they did – and the majority (54%) had never experienced one.

experiencing businesses simulations appears to a critical factor in persuading L&D functions to adopt them: two thirds of those who experience business simulations go on to use them.

The power of action-learning

The research

Conclusion As organisations look for more effective ways to transform the behaviour and effectiveness of their people in order to drive business growth, L&D is increasingly under more pressure to provide a real impact for the business. But if L&D is to realise its potential as a reliable enabler of business transformation, the new focus must be on the business effectiveness of such learning and how it is rapidly adopted and applied. This needs to be acknowledged, recognised and supported at executive level.

It is an exciting time for L&D practitioners but they will consistently have to ensure that their budgets are well spent supporting specific business objectives. This involves much more dynamic design and development methods and a tighter collaboration at the strategic planning phase, which many organisations are beginning to realise, as evidenced in this research.

MethodologyThis report was commissioned by ProfitAbility, a provider of business simulations and learning solutions.

The report was constructed by analysing the results of a survey of 107 learning and development practitioners carried by Training Journal in May 2014.

Further qualitative interviews were carried out with heads of hr or Learning and Development in 18 companies from a variety of industry sectors.

We would like to thank the following companies who contributed to the survey, taking their time to help us with their thoughts and contributions:

DeLarue

Dell

DLA Piper

eDF energy

experian

Jaguar Land rover

Kimberley clarke

southampton Oceanographic Institute

PriceWaterhousecoopers

sony Pictures

skype

Thames Water

Three

TomTom

Unilever

vodafone

Walt Disney corporation

Waterstones

ProfitAbility is a leading provider of learning and development services, designing and delivering customised business simulations for some of the world’s leading companies including siemens,Nestlé, roche, sky and gKN.

To find out more about how you can use learning to deliver a lasting impact on your organisation please contact:

ProfitAbility L&D services LLPstables 1howbery Park WallingfordOxfordshireOx10 8BA

T: +44 (0)1491 821900e: [email protected]