Hilgart and Chip Cleary
sciences companies face changing regulatory landscapes, evolving research
pipelines and shifting access to doctors, caregivers and patients. How do they
excel? Of course, it matters to have a compelling strategy. But what many
believe matters the most across industries is the ability to convert strategy
to reality. In short, organizations thrive based on their ability to execute.
business leaders grow their ability to execute? In large part, a company’s ability to execute
depends on it having the right talent in the right places. In turn, business
leaders depend on how well their companies build talent. Business leaders
expect their core functions
such as sales, R&D, and manufacturing to provide mature capabilities.
Increasingly they now expect Learning & Development (L&D) to provide a similarly
mature capability for building talent. They expect L&D to be able to:
what improvements the business requires in its ability to execute
Target what specific capabilities people
require to make those
the learning investments needed to develop those people capabilities
Systematically manage those investments to achieve the targeted results at
L&D groups are not yet ready to live up to this expectation. This article
identifies key practices that L&D can adopt to contribute more
strategically to their companies’ ability to execute.
A Shift in Perspective: From Service
Provider to Investment Manager
L&D groups view their role as "providing a service” to the
business. Such L&D groups focus
on satisfying their customers’ "demands.” They think in technical
terms about the service they offer. What content should they provide? How often should they run programs?
How much should things
cost? While providing
responsive service is helpful, this perspective forms a barrier. L&D groups
that adopt it come to be viewed by the business as "order-takers.”
This service-driven perspective leads companies to choose learning investments based on when a need surfaces rather than
how much business value addressing it will create. Whatever requests arise first are the ones
that get filled … until L&D caps out its budget. It also forces business leaders to act as the "order-makers” who
must decide whether
launching a new program is a good idea. Finally, it forces
L&D itself to respond to an unpredictable stream of requests, many with short lead times.
Business leaders want learning programs to
target relevant and measurable business results and they do not consider those programs
complete until the results are achieved. It is not enough to run a multi-stage
blended onboarding program for sales representatives. It is not enough to run a
well-regarded leadership development program for high potentials. Rather, L&D
must identify the specific capabilities the business requires and how it will
know that the target population has achieved them. This is hard work. Business
leaders do not have the time or the expertise to identify the "where, when, how, and why” behind
the many potential investments in learning that they might choose to make. They want a trusted advisor
to clarify the decisions they face.
effective L&D groups view their role as enabling the business to define and manage a portfolio
of investments in learning that improve its ability to execute. L&D serves
as an investment manager that provides business leaders with
the learning equivalent of compelling investment prospectuses. Business leaders are the investors who always make the call on
which investments among the
ones presented to fund. Once the business selects investments, then
L&D implements them and closes the loop to ensure that the results targeted
are actually delivered.
If Your Budget Is A Dry Document, Are You Really
Tracking What Really Matters?
When L&D and business leaders adopt this investment-driven perspective, it
permeates how they engage, starting with how they state the budget. Most L&D organizations base their
budget on some form of demand plan. Typically, this demand plan lists development and delivery activities (e.g., "We’ll
create these 27 new
programs” or "We’ll run 10 sessions of this program and
of that one.”)
the typical demand plan shows only activities and costs, it positions L&D
as a cost center. However, when we adopt the
investment-driven perspective, we expand the demand plan to
also give business
leaders visibility into value. The
result, which we call a Learning
specific results expected for
to business goals ("Why are we considering this program?”) and
("What counts as success?”)
include these elements, we shift from talking about "programs” and "costs” to
instead "results” and "investments”. We ask business leaders "Is
this a worthy return?”
Figure 1: The Learning Investment Portfolio
Giving Your Business Leaders a Bird’s Eye
The Learning Investment Portfolio treats each program as an individual investment. Portfolios typically
contain dozens or even hundreds of programs. Given this much detail,
business leaders require a way to step back to evaluate broader decisions about
their learning investment strategy. How much am I investing in advancing the business
strategy versus ensuring
smooth day-to-day operations? How much am I investing in proprietary versus generic
require a portfolio analysis to give them insight into the key investment trade-offs they face. The Value-Added Matrix is the result. It categorizes investments to
show just where the money is going.
The matrix allocates the investment portfolio into four quadrants and
summarizes and totals the
investments in each.
The two quadrants to
the right of the vertical axis contain investments to advance the company’s strategies. We call these
investments Drivers when
they employ differentiated content and Accelerators when they employ generic knowledge.
The two quadrants to the left of the vertical axis contain
learning programs needed to run the ongoing operations. We call these Enablers when they employ
differentiated knowledge and Fundamentals
when they employ generic knowledge.
The two quadrants above
the horizontal axis, Drivers
and Enablers, contain
learning programs that employ content that is unique to the business,
unavailable in the marketplace. These are programs that need to be built using
subject matter experts from inside the company. The two quadrants below, Accelerators and Fundamentals, contain learning
programs whose content is readily available in the marketplace. These are
programs that should be bought and perhaps customized.
the line items in the portfolio into this matrix view improves business
leaders’ control over their learning investments by making crystal clear the
net result of the many individual investment decisions they make.
Figure 2: The Value-Added Matrix
A Concrete Way to Articulate Alignment
agrees that learning programs must align to targeted business results. However,
"alignment” can be a nebulous concept. Everyone knows that they want it. Fewer
are clear on how to get it or even tell when they have it.
found that the key to creating alignment is to focus on business processes. One way to view a company is as a set of
interlocking processes such as product development, marketing, sales,
procurement, manufacturing, collections and so on. Successful companies are
able to master the processes that matter most. In fact, when we talk about a
company’s "ability to execute,” what
we mean is precisely its ability to perform its critical processes at their
alignment, the business and L&D must identify where and how learning
investments will improve the critical business
processes that create growth and profitability. It’s not enough to say, e.g., that we want
to train medical affairs staff to "better understand our products.” Rather, we
must identify what change we expect to see in which business process. Is it
increased first time sales? Is it higher utilization?
How often do your business leaders come to L&D saying something
like, "I want a two-hour
course to communicate the following points!” The problem with simply trying to align to "business needs” is that just
about anything can be framed as one. Most mistakes in aligning learning investments come from being imprecise in what we consider a "business
need” and correspondingly focusing too early on too detailed a level of
We need a
systematic way for leaders
and L&D to
articulate "business needs” to ensure step-by-step alignment between
business outcomes on the one hand and learning solutions on the other. That’s
what the Ability-to-Execute Alignment
Figure 3: The Ability-to-Execute Framework for Alignment
Using the framework, business and learning leaders trace
the chain of causality between end business outcomes and learning solutions through four levels. An investment:
business outcomes by
business processes by
people performances by
a targeted, effective and efficient learning solution.
When a business leader comes to "order a solution,” it’s important to
back up and ask "why?” The framework gives the business and L&D a reliable
map to define alignment.
L&D has targeted a business outcome and articulated alignment, it can then
bring all of its technical capabilities to bear. Sometimes, L&D gets so
involved in implementing the learning solution (and tackling the thousand
problems that crop up) that it never quite finds the time to step back to see
whether it actually delivered the business results it originally targeted. Now
how much of your money would you put with an investment manager who rarely
reports back on your returns?
Figure 4: The Results Contract
found that the key best practice for evaluation is simple: build it in from the
start. Define a Results Contract
before you begin. The Results Contract makes it clear what success actually
means and what achieving it will require from all involved. It states:
Targets for success
Solution to be provided
Responsibilities L&D will bear in providing the solution
Responsibilities that the business will bear in implementing the
After L&D and the business implement the solution, L&D conducts the evaluation and develops a Results Report that
compares actual results
to the targets. Where there are
provides corrective actions to address them and preventative actions to make
the L&D system itself stronger and reduce the chances that a similar gap
will recur on other investments.
Pulling the Pieces
Together: A Comprehensive Approach
Above, we have identified some key practices through which L&D can
become more strategic by advancing a company’s ability to execute. These pieces
form part of what we call the Aligned to Business Methodology.
Figure 5: The Complete Alignment to Business Methodology
The way the pieces fit together is:
L&D and business leaders identify where investments in learning may
advance the business’s ability to execute. They do this by:
Bottom-Up: L&D continually walks
the beat to stay current with the business and identify emerging gaps.
Top-Down: Annually, L&D and the business scan their critical business processes to identify where targeted business
process measures are not being achieved.
When opportunities arise, L&D and business leaders use the Ability-to-Execute Alignment Framework
to align potential learning investments with business results.
L&D enters the investments that result into the Learning Investment Portfolio. Business leaders use this summary to
prioritize investments and track results across investments against their
L&D and business leaders use The
Value-Added-Matrix to evaluate the portfolio in terms of the ratio of
investments that are Drivers, Accelerators, Enablers and Fundamentals. Based on
that evaluation, the portfolio is accepted as the plan and budget for the year.
As the year proceeds, L&D leads a governance process, which
may adjust the learning investments that will be made in response to changes in
As new investments are made, L&D and the business generate a Results Contract to define success and clarify
responsibilities. Then, L&D provides a Results
Report to close the loop and ensure that the results desired are actually
To what extent is L&D making a truly strategic impact in your
company? Would borrowing some aspect of the aligned-to-business approach help?
Tom Hilgart and Chip
Cleary are the co-authors of The CEO’s Talent Manifesto: Align Talent
Investments to Achieve Targeted Results.Email Tom at email@example.com and Chip at firstname.lastname@example.org.