Last week I introduced the evolving reporting standards for L&D called Talent Development Reporting Principles (TDRP). This week I want to discuss the three recommended statements in more detail. Next week, we will look at the three recommended reports.
The three statements are intended to organize and standardize all the important L&D measures just as the income statement, balance sheet, and cash flow statement do for accounting measures. The statements provide information about the basic measures needed to manage the learning function. Each statement will have the same columns: last year’s results, this year’s plan, year-to-date (YTD) results, and YTD results as a percent of plan. The statements may have additional columns but these are the minimum. These statements should be produced at least quarterly and, in most cases, monthly.
The first statement is the Business Outcomes Statement which brings together the key goals or desired outcomes (results) of the organization and the impact L&D is expected to have on achieving those goals. The report should include the primary goals of the organization for the year (e.g. a 10% increase in sales), any other goals which will be supported by learning, and the expected impact or importance of learning on achieving those goals. In addition to sales, goals might include market share, cost, quality, innovation, productivity, customer satisfaction, employee engagement, retention, and many others. The goals should be shown in descending order of priority. The impact or importance of learning on achieving the goal may be a Kirkpatrick/Phillips level 3, 4, or 5 quantitative measure (a number), or it may be expressed qualitatively (like high, medium, low). It should represent primarily the view of the stakeholder (e.g. the VP of Sales believes the proposed learning program, properly conceived, designed, implemented, and reinforced, should contribute 30% of the 10% increase in sales [or 3% higher sales]).
The second statement is the Effectiveness Statement which contains more familiar measures and focuses on how well or how effectively the business outcomes are achieved through learning. Recommended measures include levels 1-5. All organizations should be able to report level 1 (satisfaction) and 2 (learning) measures. Level 3 (application) is strongly recommended for all important programs aligned to organizational goals. Levels 4 (impact) and 5 (net dollar benefits or ROI) are recommended for key programs.
The third statement is the Efficiency Statement which brings together all the activity measures and cost elements necessary to judge how efficiently the outcomes were achieved. Efficiency measures include Level 0 or volume (number of participants, courses, hours, etc.), utilization rates (courses, instructors, facilities, etc.), budget and opportunity costs, program and vendor management, cycle times, reach, and other key indicators.
David Vance is the former President of Caterpillar University, which he founded in 2001. Until his retirement in January 2007, he was responsible for ensuring that the right education, training, and leadership were provided to achieve corporate goals and efficiently meet the learning needs of Caterpillar and dealer employees. Prior to this position, Dave was Chief Economist and Head of the Business Intelligence Group at Caterpillar Inc. with responsibility for economic outlooks, sales forecasts, market research, competitive analysis, and business information systems.
Dave now consults with organizations on learning and performance issues with a particular focus on designing effective strategies for managing the learning function, including alignment, governance, organization, and measurement. His firm is Manage Learning LLC. Dave is a frequent speaker at learning conferences and association meetings. He also conducts workshops and simulations on managing the learning function.
Image Credit: Ben (Falcifer) on Flickr