Where is the money? Show me the money?

In Jerry Maguire, Tom cruise is asked by one of his clients to ‘show him the money’. In the context of the film it is completely understandable that he is asked to focus on this after all he is a commercial person and needs to show results.

Why is it then that a large majority of organisations do not ask this question either before, during or after learning and development and/or coaching programmes are implemented. This is amazing for a number of reasons, including the fact that change and the need to drive business results are often the major reasons for learning and development interventions in the first place.

Over the years, researchers have indicated that as little as 40% of organisations assess the financial return on investment of development programmes. This is in stark contrast to the 80% or so who regularly evaluate the participant’s reactions and nothing more.

Kirkpatrick’s model of evaluation dating back to 1975 is still useful as a four-level approach to ROI:

• Learner reactions to the training programme at level one
• Evaluating the learning and acquisition of knowledge at level two
• Job application and changes in behaviour at level three
• Observable business results at level four

However as the following survey, conducted by Training Magazine in the US shows the amount of evaluation drops off significantly through the four levels. It would appear that the focus within the UK is not that different either.

What is interesting about the broad trends we see? Organisations appear to concentrate on the easy stuff and measure what is most obvious using ‘happy sheets’.

Some business sponsors and HR professionals actually believe that it is more trouble than it is worth to measure ROI. And yet, other functions have proved that intangible benefits can be measured very successfully indeed. So what is the problem with learning and development and coaching interventions?

It is our belief that sound business cases and positive outcomes need to be demonstrated and that much can be done to effectively evaluate and map the outcomes of any solution or intervention. However evaluation in this area is often perceived as difficult, expensive and time-consuming – in short most organisations do not invest in ensuring that the investment they make in their people is really generating the returns they desire.

At Quo, we believe that good, solid follow-up is the key to identifying ROI. More often than not, once participants have filled in happy sheets and left, evaluation trails off very significantly. In our experience this is a missed opportunity, which is why we, as much as possible, build follow-up into client interventions we design and implement. We strongly believe this is the way forward and have successfully assisted our clients to build ROI tracking into their programmes from the very start and to maintain this throughout.

We define ROI in broader terms and in many ways the traditional financial measure based on historical data needs to capture more than just the bottom-line results of euros, pounds and dollars. Quo has found that there are at least a dozen ways to identify return on investment, both in qualitative and quantitative terms. We advocate that ROI includes:

• Delivery of strategic goals
• Maintaining competitive advantage
• Growth of new markets and innovation
• Payoff from interventions, e.g. time saved
• Productivity
• Longevity of employees and reduced turnover
• Morale and engagement of employees
• Ideas and insights generated

By doing it this way, we challenge the traditional objective to simply control costs incrementally, rather than boost a return on the investment.

Quo has worked with clients to design and implement solutions and interventions that are of strategic importance to their businesses. For example:

In Talking Human Capital with Professor Gary S. Becker, Nobel Laureate states “The most successful companies and the most successful countries will be those that

manage human capital in the most effective and efficient fashion – investing in their workers, encouraging workers to invest in themselves, provide a good learning environment, and yes, include social capital as well as skills and training”.

Gary Becker touches on an issue that is close to our hearts at Quo. Unless you put something in, you will not get something out. There is little point in implementing an intervention and hoping it will fly rather than sink! It is critical to:

• Understand the end goal in terms of contribution to business performance,
• e.g. financial return, retention and growth of customers and people
• Work back from business performance, making it easier to identify the value of doing something about it
• Address environmental factors, e.g. line manager and sponsor engagement, to ensure support and challenge to pay back the investment
• Ensure the solution/intervention is keeping pace with the business need and does not constitute a ‘second-hand’ solution

Without this approach the solution will be seen as yet another initiative at best. In many such cases, people just play along with it until it withers on the vine. It is not surprising that this happens because of course, it has happened before.

Quo has cracked the code in our approaches to optimise and identify ROI. Our track record in level four evaluation puts a different spin on ‘many happy returns’ where our learning and development and coaching interventions are concerned. How great would it be to tell a success story every time we invest in our people?

If you want to join the few organisations who want to succeed at level four, talk to us about what you want to achieve and let us help you get to your destination quicker than you thought possible.