The Broken Investment Value Equation

According to analyst estimates, enterprise training spend exceeds $300 billion globally, with over $100 billion being spent in the United States alone.

Yet, very few senior executives can answer the question, “How much are you spending on training?” While the obvious answer may be the cost of your corporate training budget, this does not even begin to account for the total cost of training. Consider the costs of employee time away from work, the cost of poor quality and the lost productivity while employees are in training.


The Business Imperative for Transformation

Becoming more relevant means being intimately connected with the business, and understanding its objectives and goals, opportunities and challenges. It is also ensuring that the right structure and processes are in place to discover business-driven needs. To create more value, L&D organizations need to figure out if learning can be an enabler to move the needle on key business issues or challenges, and then delivering it in a way that makes a difference. The business imperative in front of most learning leaders centers on three key questions for learning and related business components:


Am I organized in a way for value creation?


Am I creating value?


Are my costs under control or at acceptable levels?

If these three questions don’t have good answers, then you have a recipe for transformation.

If L&D organization can get their arms around these three ideas, everything else will follow.

Create more value for the investment being made.

Become more relevant to the business.

Get cost to acceptable levels.

Organizations can then figure out how to do the right mix of fixed to variable costs, the modes of delivery like e-learning or ILT, virtual ILT, and the like. They can determine what vendors to use, how much to spend with them, and how to select them. They can look at the kinds of technologies needed to support efforts and be able to measure whether the technologies are performing effectively.

A Transformation Model for L&D

When considering transformation, it is important to remember that you can’t transact your way to transformation. Transformation requires a leap. Therefore, organizations must think from the goal backward. Our transformation model outlines a set of from-to goals for L&D to consider.

Transformation: The Key Questions to Consider

Like with any transformation it is critically important that you are able to answer questions focused on the current and future state. Questions like how much are you spending today and what are you getting for it? Are you heavy on fixed resources, which give you limited flexibility and scalability and also lots of fixed cost, or are you utilizing the technologies and training approaches that are available to you these days to minimize time of the job? Do you have the right mix of modalities and deliveries? Are you utilizing vendors correctly, and are you leveraging both vendors and resources to deliver what you’re trying to deliver?