Talking to the C-Suite: Building a Business Case for Employee Development and Training | Webinar 02.18.15

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When presenting a proposed training program to senior leadership, don’t make the mistake of getting caught only discussing the ROI. Executives expect something much different in a true business case. In this webinar we’ll cover the basic 5 elements to include in your business case for employee training: 1. Scenario analysis – most likely outcomes, best case and worst case. 2. Link each expected benefit of the solution to an expected operational effect. 3. Identify the KPI (key performance indicator) for each benefit. 4. State the risk of not taking the proposed action. 5. Align proposal with organization’s strategic goals. www.bizlibrary.com
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  • 1. ? THE MOST COMMON OBJECTION FROM SENIOR EXECUTIVES ABOUT LEARNING INITIATIVES IS…
  • 2. ? IN YOUR ORGANIZATION, WHAT ARE YOUR BIGGEST CHALLENGES WITH CHANGE…
  • 3. WHAT WE HOPE YOU’LL TAKE-AWAY How to communicate the cost justification and strategic impact of your training initiatives. Understand your current situation, where you want to be and when and how you will get there. How to communicate how your plan will benefit the overall organizational goals.
  • 4. Executives Want to See More Impact and Value RANKED IMPORTANCE TO EXEC’S MEASURE LEARNING EVALUATION LEVEL EXAMPLE CURRENTLY MEASURED 1 Impact 4 “The Accel project contributed 20% to our reduction in error rates this fiscal.” 8% 2 Value 5 “Within one year, the East program will achieve a 2:1 benefit-cost ratio.” 4% 3 Awards 0 “Our learning program won an award from Chief Learning Officer magazine.” 40% 4 Application 3 “78% are applying their new skills to their jobs” 11% 5 Learning 2 “92% of participants increased their skills” 32% 6 Activity 0 “Last year 7,800 employees participated in our learning programs” 94% 7 Efficiency 0 “Formal learning costs $2.15 per hour” 78% 8 Reaction 1 “Employees rated our training very high with an average of 4.5 on a 5 point scale” 53% Source: How Executives View Learning Metrics by Patti and Jack Phillips, CLO Magazine, Dec 2010
  • 5. 58%SKILLS Organizations with a strong learning culture significantly outperform their peers… INNOVATION 46% PRODUCTIVITY 37% CUSTOMER SERVICE 33% PROFITABILITY 17%
  • 6. ELEMENTS OF A BUSINESS CASE SCENARIO ANALYSIS Best, most likely, worst CAUSE/EFFECT ANALYSIS Link to specific benefits KPI’S FOR EACH BENEFIT RISK OF THE STATUS QUO Risk of no investment ALIGN WITH ORGANIZATIONAL GOALS
  • 7. It takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that. The Red Queen Through the Looking Glass by Lewis Carroll
  • 8. RISKS OF THE STATUS QUO What could happen to the company's bottom line? Could the company lose customers? Or market share? Could some future costs be avoided if the investment is made today? SCENARIO ANALYSIS CAUSE/ EFFECT ANALYSIS KPI’S FOR EACH BENEFIT RISK OF THE STATUS QUO ALIGN WITH ORG’S GOALS
  • 9. Organizations with comprehensive training programs: Higher income per employee than those with less comprehensive training. Higher profit margin than those who spend less on training. Higher shareholder return if the training expenditure per employee increases by $680. SOURCE: Association of Talent Development
  • 10. Most likely results Best case scenario Worst case scenario SCENARIO ANALYSIS SCENARIO ANALYSIS CAUSE/ EFFECT ANALYSIS KPI’S FOR EACH BENEFIT RISK OF THE STATUS QUO ALIGN WITH ORG’S GOALS
  • 11. Your training program improves the employee’s ability to do the job. That improvement has a positive impact on the business. That impact results in a financial benefit to the company. CAUSE / EFFECT ANALYSIS SCENARIO ANALYSIS CAUSE/ EFFECT ANALYSIS KPI’S FOR EACH BENEFIT RISK OF THE STATUS QUO ALIGN WITH ORG’S GOALS
  • 12. BUSINESS IMPACT IMPROVE EMPLOYEE PERFORMANCE IN AREAS THAT IMPROVE ORGANIZATIONAL OUTCOMES
  • 13. COST JUSTIFIED VS. ROI QUALITY EFFECTIVENESS BUSINESS RESULTS JOB IMPACT
  • 14. REPORT: VALUE OF TRAINING ON WRITING SKILLS FOR ACCOUNT REPRESENTATIVES AND CUSTOMER SERVICE REPS Goal: Reduce turn around time on bug fixes from an average of 21 days to 10 days. x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x
  • 15. $1,155,000 80% OF THE BUGS REQUIRED A RETURN OF THE WRITTEN REPORT TO THE REP FOR CLARIFICATION. $50 / DAY – OVER 6 MONTHS – 1,100 BUGS VALUE: The expected value to be gained is measured by using the average revenue lost for each day the service is down for customers due to sloppy or unclear written explanations of bugs to the programmers.
  • 16. TRAINING COSTS: Human Resources: $90,000 Reps: $300.000 Total = $390,000 VALUE ADDED FROM IMPROVED PERFORMANCE: 500 reps X $600/day/rep Access to online writing courses including time to take and complete 5 courses each and successfully complete writing evaluations to prove increased skills. 2 HR reps needed to administer program and build writing evaluations. IMPACT: • Less than 10% of written reports of bugs were returned for rewrites in 6 months after program. • Average bug fix reduced from 21 days to 12 days. • Total bugs affected 1,210. TOTAL VALUE GAINED: $544,500 ON A $390,000 PROGRAM
  • 17. Identify the KPI for the business problems you are trying to solve. What will improved performance look like, and how will we know? KPI’S FOR EACH BENEFIT SCENARIO ANALYSIS CAUSE/ EFFECT ANALYSIS KPI’S FOR EACH BENEFIT RISK OF THE STATUS QUO ALIGN WITH ORG’S GOALS
  • 18. A process of continuous adjustment to keep the parts in their correct relative position. GOAL ALIGNMENT SCENARIO ANALYSIS CAUSE/ EFFECT ANALYSIS KPI’S FOR EACH BENEFIT RISK OF THE STATUS QUO ALIGN WITH ORG’S GOALS
  • 19. Will employees participate, use it etc… What are the costs? What’s the value? Is the learning initiative relevant to our business needs? BARRIERS TO PROGRAM ADOPTION
  • 20. RESISTANCE SUCCESS STRATEGIES No Help • Create an advisory committee • Use a coach • Ask supervisors for support and provide them tools Communication • Work with your internal learning team to develop strategies for high- level and end-user communication Not Enough Time • Focus on just-in-time learning: search and learn, job aids • Deliver kickoff events, blended learning, learning labs • Emphasize time management courses • Create learning in progress signs Fear and Anxiety • Nurture safety and trust with perceived freedom of choice • Focus on individual needs and help folks to see the benefits of having online learning available Not Relevant • Emphasize on-the-job application • Understand the goals of others and ask questions: “how can you use this initiative to meet your goals?”
  • 21. WE DON’T HAVE TIME FOR TRAINING - Case Study CHALLENGE: Making time for training SOLUTION: TAG TRAINING – 5-10 minutes for a video Tag cube neighbor Discuss at the end of the day BENEFIT: Maintain workflow and service standard
  • 22. YOUR BUSINESS CASE EXECUTIVE SUMMARY (1 page) Objective sentence and bullet points on each key element. CURRENT SITUATION (1-2 pages) The business challenges being addressed and business goals to be met. PROPOSED SOLUTION (2-3 pages) Explanation of the solution – include a simple statement of each expected benefit and risk assessment of the status quo. 1 2 3
  • 23. YOUR BUSINESS CASE EXPLANATION OF BUSINESS BENEFITS (2-3 pages) A thorough analysis of the bottom-line impact including business benefit gains and costs of the proposed solution (ROI) EMPHASIS on business benefits. CONCLUSION (1page) Executives will “bottom-line” it, so they will inevitably read the summary and conclusion before reading anything else. Be concise and cover each major element of business case. SUPPORTING MATERIAL (3-4 pages) Include key supporting material, data and research. 4 5 6
  • 24. 1. Don’t get stuck on ROI only. Communicate the cost justification and strategic impact of your training initiatives. 2. Plan and organize. Understand your current situation, where you want to be and when and how you will get there. 3. Know the facts and risks back it up with data. 4. Communicate how your plan will benefit the overall organizational goals. KEY TAKE-AWAYS
  • 25. Executing Your Plan
  • 26. Overcoming Resistance
  • 27. WWW.BIZLIBRARY.COM/FREE-TRIAL FREE 30-DAY TRIAL! no risk – no obligation THOUSANDS OF COURSES . 25 TOPIC AREAS . UNLIMITED ACCESS
  • 28. Jessica Petry Sr. Marketing Specialist jpetry@bizlibrary.com @JessLPetry @BizLibrary Chris Osborn Vice President of Marketing cosborn@bizlibrary.com @chrisosbornstl #BIZWEBINAR
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