The book Developing Human Capital by 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 first chapter, called “The New Workforce,” touches upon the issue of generation transition. Currently, organizations are managing five generational cohorts in the workplace: The Baby Boomers, Generation X, and the Millennials that represent different backgrounds, ideas, challenges, and opportunities. In order to compete and succeed in today’s marketplace, it is crucial for companies to address the generation shift and make informed decisions about how to tackle the looming human capital challenges.
The second chapter, “The Need for a Strategy,” discusses the basic principles of the management strategy, which is the key instrument for providing guidance and feedback for L & D practices. 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. Useful measurement grows out of alignment with the company’s goals and provides opportunities for making evidence-based decisions about the development of human capital.
The third chapter is devoted to the establishment of a measurement framework, which provides the organization with a mental model for measurement strategy implementation. 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.
Chapter four, “Planning for Success,” provides recommendations on how to start measurement strategy implementation. First, the company needs to analyze its current position and think about how to design work plans at every level. Second, it needs to find a place to start, “a low-hanging fruit” to build momentum and ease fears about measurement. Third, once the company learns to make effective data-based decisions, it can switch to more sophisticated questions and extensively use quantitative evidence to improve the quality of its offerings.
Chapter five is called “Curriculum Alignment” and discusses how to align training curriculum with tasks to improve business results. The recommended tools are performance mapping that provides a proven way to systematically align curricula to organizational goals, and gap analysis used to identify, quantify, and prioritize performance gaps. These tools can serve as a basis for a long‐term, performance‐based curriculum that targets the most pressing learning and performance needs of the organization.
In chapter six, measurement mapping is discussed that is aimed to create a map that represents the expected and agreed‐upon observable, measurable outcomes of the investments. Five key elements of effective measurement mapping are identified:
- Involve the right people.
- Agree on the strategic goal.
- Make all key performance indicators quantifiable.
- Treat mapping as an art, not a science.
- Enjoy the process.
Chapter seven, “Improving on the Basics,” discusses the importance of surveys, tests, and segmentation as tools of data management. By developing surveys and tests, insightful and actionable data can be gathered to improve the quality of training. In chapter eight, advanced analytics tools, such as calculation of isolated business impact, are described. 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. By calculating an isolated business impact, the company is able to understand whether the investment is working and fine-tune and optimize it accordingly.
Chapter nine, “Optimization through Predictive Analysis,” discusses the purposes of measurement of L & D programs and predictive analysis. 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 can dramatically increase 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 to 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.
Chapter ten, “In Conclusion,” explores the importance of L & D management in a rapidly changing environment. 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.