A new organizational symptom of COVID-19 has recently been discovered: frozen learning and development (L&D) efforts.
While the new symptom might not be directly impacting the bottom line yet, and is not a universal symptom, such symptoms have been known to significantly hamper recovery efforts for years after a crisis. Treatment is needed to stave off long-lasting negative effects. Yet, most decision-makers fail to recognize the seriousness of the symptoms and stop investing in L&D in favor of defensive posturing to preserve resources.
It’s understandable. The number of people out of jobs rivals the Great Depression. How in the world can organizations invest in people when furloughs and layoffs are so widespread?
L&D budgets are under scrutiny. This is a common mindset and only 34 percent report having confidence in current L&D plans, yet there is growth in spending toward technology training and adaptation. Again, understandable given our remote work locations.
Organizations are making a long-term, costly, and perhaps, a never-recovering mistake by slamming on the L&D brakes.
“Financial blinders” are preventing organizations from looking at alternative ways to continue L&D efforts. If you are in L&D, you are likely shaking your head in agreement. Yet you are likely a primary contributor to blocking such investments in good times and now it is coming back to haunt you in bad times.
One might ask how, or why? Most L&D efforts are never connected to business outcomes and lack a demonstrated return on investment (ROI).
McKinsey estimates organizations that connect development programs to important outcomes yield an 8X ROI over those that don’t. Seems to be a no-brainer, but magic pills do not exist. As Thomas Edison said, “Most people miss opportunity because it comes dressed in overalls and looks like work.” L&D is hard work. We need programs targeting skills that have been documented to connect to business outcomes—outcomes like revenue, customer satisfaction, turnover and productivity.
Case Study in L&D
Take for example Progressive Insurance, which is working hard to develop its most important resource during these unique, pandemic times. Actually, they never stopped doing so.
Lori Niederst, Progressive’s CHRO, is spearheading this effort: “Six years ago, we launched our multi-cultural leadership development program. I am pleased to say it is still going strong during COVID-19, but we have shifted to a virtual academy. The program includes some traditional training, coupled with experiential learning assignments that allow our leaders to roll up their sleeves and solve real business problems. For example, a recent cohort was sponsored by our finance organization and tasked with developing metrics to improve our sourcing practices. The result was an improvement in operational outcomes, a significant cost savings and an education for some of our best and brightest on how our finance organization operates. In addition to these benefits, promotion rates for graduates of this program are two times that of their Progressive peers.”
Niederst continued, “We refuse to let this crisis stall our long-standing, promote-from-within talent strategy which requires a commitment to invest in L&D, regardless of the business environment or the challenges we face.”
Aim for the Right Target
Some organizations might not be at the L&D level of Progressive; most are not. The trick is to accurately identify what to focus on (this is usually not what you think it is).
Using predictive analytics, I have been helping companies document the impact of skills and competencies on business outcomes. For example, lots of organizations use 360s to develop leaders. 360s are fantastic tools, but they are not going to grow leaders in-and-of themselves—you have to know how to wield the tool and where to apply it.
Handing a 30-page report to a leader with numbers and qualitative feedback is not going to cut it. Leaders can easily get lost, not knowing where to start, or worse, thinking they have to tackle everything in the report. Not anymore. We can directly link employee data to business outcomes. With pinpoint accuracy, we can target high-impact but low-scoring competencies so leaders can focus on developmental activities that drive business outcomes. On top of that, dashboards can be built that contain AI-driven action tips (proven and time-tested tips) that leaders can personalize to address low-scoring, but impactful competencies. The result is L&D that promotes competency mastery that connects and drives critical business outcomes, removing the guesswork. L&D just got a seat at the business-partner table, so funds can start thawing and recovery can begin.
For example, one organization was working on empowering their workforce. Empowerment scores were generally high across the organization, yet not having much impact on outcomes. Once we ran predictive analytics matching employee data to business outcomes, we found empowerment wasn’t a key driver of outcomes. Communication was the number one driver, closely followed by relationships, servitude and leadership self-awareness.
The organization wasn’t missing the target, it was aiming for the wrong target! The organization shifted gears, focusing on analytically identified and impactful drivers of business outcomes. The result was a significant increase in outcomes and a significant reduction in turnover. How? We targeted leaders as change agents and provided them dashboards that clearly showed them what to focus on based upon their individual scores for impactful drivers, highlighting what they should be focusing on right now. The dashboard was created to allow a deep library of action tips to be matched to competencies based upon leaders’ respective competency scores. Leaders can personalize action tips, set target achievement dates, and are encouraged to share their business focused action-plan with their one-up and team to build support and accountability. As we tracked these plans, we found those that built support and shared accountability were three times more effective than those that did not. This is a critical piece of executing targeted L&D plans.
As we continue to work through this pandemic, we must also work to better understand how the pandemic is impacting organizations’ most valuable and irreplaceable resource: humans.
One thing organizations need to do right now is to identify the correct L&D target(s). Firms need to link employee data to business outcomes and shift L&D funds to the right target. This will not only help in lean times, such as we find ourselves now, but also when the good times return—and they will.
We cannot sit by and ignore L&D. If we do, organizations will suffer (for years to come). Progressive is a shining example of persevering and continuing to grow leaders under difficult times. How will you rise up and meet this critical need? The first step is linking L&D to outcomes that matter and aim for the right target.