In the book Developing Human Capital, Pease, Beresford & Walker discusses how to use analytics to optimize the business’s learning and development investments. Learning and development (L & D) is a term used to describe the company’s activities aimed to facilitate the professional growth of its employees. The recent changes in the business environment encourage companies to spend more money and efforts on L & D, and, to invest effectively, certain instruments can be implemented that are discussed in the book.
The key instrument for providing guidance and feedback for L & D practices is the measurement strategy. Each phase of measurement serves a particular goal, following the development of a learning initiative from design to launch, and analyzing its impact on business. When implemented to an L & D initiative, an effective measurement strategy:
- Drives alignment from the start.
- Establishes the measures of success.
- Guides content development.
- Provides in-process measures for continuous improvements.
- Improves the impact and value of learning and development initiatives.
The book gives detailed information on how to launch a management strategy, develop a curriculum and a performance map to align curricula to organizational goals, and conduct a gap analysis. By defining the alignment between investments and business goals, the organization knows what to measure, and the stakeholders know what to expect when they invest in a particular L & D initiative. The measurement strategy is intended not just to prove but to improve, meaning that it does not only calculate the return of investment but also provides the data and methods for its future optimization.
The basics of learning evaluation can be improved by advanced analytics tools: tests, surveys, and segmentation. They are used for early identification of an investment’s potential, calculating training’s contribution based on actual business metrics, and establishing ways for investment optimization. When training is conducted, tests and control groups allow the management to measure the difference between trained and untrained employees and the changes in performance over time. If the company is able to understand whether the investment is working, it can fine-tune and optimize it.
The measurement strategy is often established with an initial aim to find the return of investment of a program, validate training, and secure future funding. The strategic shift occurs when the organization starts to use measurement to improve, not just to prove, moving into the world of optimization through predictive analytics. By embracing analytics tools, the L & D departments improve their value to the company by dramatically increasing the impact of learning programs by filling the audience with people who have the potential to benefit from it. Using analytics tools, they gather data that helps them understand how to tweak programs or change the instruments for learners who have a low probability of benefitting from the program. They also help the company save money by choosing participants who are most likely to make an impact after completing the program. Optimization allows the L & D departments to examine the already achieved results and identify where future investments are most needed.
The concepts used in the book can be applied to any department or area of organization management, not only learning and development. At its core, a measurement strategy is a plan that establishes how business investments are evaluated. It can be used to manage any goal of an organization, from small metrics to big data, using the same basic principles. The main idea is to regard any objective as an investment, break it down into manageable parts, establish the measures of success, guide its development, and evaluate the results.
To improve human capital resources, the measurement strategy can be used to evaluate the effectiveness of the existing employee management processes. To do this, it is important to first understand the employee skills and capabilities that underpin business performance and then build metrics that access how well these capabilities are employed in the existing processes. If the processes result in the company’s better performance and capable employees progressing through an organization at a higher rate than regular employees, that means that human capital is managed effectively.
In the book Developing Human Capital, Pease, Beresford & Walker discusses how to effectively manage the L & D needs of an organization in a rapidly changing environment. The key concepts used in the book are measurement and optimization. A successful measurement strategy is intended not to prove but to improve the company’s L & D investments by gathering, managing, and analyzing quantitative information and suggesting optimization methods. Similar measurement strategies can be applied to all goals of an organization and are especially useful as a method of improving the existing employee management processes. In a measurement strategy, any objective is regarded as an investment, broken down into parts, measured and guided through the development process, and the results are evaluated. It allows the company to both measure the profitability of an investment and come up with the methods for its future optimization.