How to measure ROI when it comes to training and development

Gareth: Alex in the world of learning development training, one of the things that constantly get spoken about is of course, the return on investment, how difficult it is to measure and as an ex-Accountant or maybe once you’ve done it, you always are one. I think one of my key things is making sure that we can absolutely measure the returns on any training investment.

And I remembered only recently, a participant from a program said she did a couple of things differently that she hadn’t done before. When I quizzed her about how much it was worth, the deal she got, she said a couple of million dollars and I know the gross margins that business works off. They just paid for everybody’s sales training, basically. So, a huge return just from one example.

So, I’d just be curious, Alex, from your experience, what is it about and what are the things we need to do to, make sure we do get a clear return on invest?

 

Alex: It’s a great story. And an illustration that training works, when, it translates to behaviour change. So just hold that thought for a second.

But that’s what we do. That’s our industry. That’s why the careers that we’ve forged for ourselves Gareth and, why we work in this business.

It’s really interesting that it often doesn’t work, so training doesn’t work, because it doesn’t translate to behaviour change. And you’re comment about return on investment is really, really important. And one process that we always do with organizations with whom we partner is, have the conversation before anything happens about what they want to change, what are the measures they want to change. And the key thing is that the holy grail, if you will, is the business performance So, let’s be really clear about what the measures are that you want to do. But there are many other measures as well that you want to change, you want to change observable behaviour. You want people to change the language they’re using around a given topic. You want to see coaching in action. Those four indices, if you will, are the important things for us to lay out and be really clear about which elements we want to shift and how we want to do that.

And if you have those conversations upfront, you’ve then got a framework against which to measure. You can then start to observe your return on investment and get a sense of it.

 

Gareth: I guess that’s quite interesting isn’t it?

 

Alex: Yeah.

 

Gareth: Of course, there’s something about the what, i.e. the the actual numbers, the sales numbers, and the profitability numbers. But you might have just had a lucky year.

 

Alex: Yeah.

 

Gareth: It’s how the behavioural change is coming across, which I guess the importance there is it’s the behavior that’s repeatable. And that’s what gets the return up even more.

 

Alex: Absolutely. And ultimately we’re training people to help them change their behaviour to a more positive behaviour in the context of sales, for example, we know that those behaviours are gonna make it more likely for them to change the business results because, well, the two are absolutely directly connected. Yes, there are other factors like market performance or product quality or all those other things that will influence rate of sales. But ultimately, getting your customers to say yes to your ideas is what sales is all about. And you can measure those behaviours. Knowing that those behaviours are the behaviours we desire in order to drive that top line.

 

Gareth: So, I think the key messages here are, measure it, what are the key things you want to change, not just the returns, but also the behaviour. So, it’s a mix of the what and the how and set that out upfront and have the confidence to measure that.

 

Alex: Absolutely. Spot on.

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