From “Training And Development” To “Performance Improvement” : Knowledge and learning have gained decisive importance for corporate strategy in the last 10 years. However, more and more voices are being heard calling for greater dedication to measuring the profitability of these investments. This requires training and learning professionals to be able to connect with business managers and demonstrate that their activities translate into real performance improvement.
Why Is It Important For Learning And Training Professionals To Speak The Language Of Business?
Business managers on a day-to-day basis tend to underestimate the value of investments in intangible assets. Their interests are focused on growth week after week, on financial indicators, and, ultimately, on the final results in the reporting period.
On the other hand, top-level managers do not necessarily share the more technical knowledge of learning and knowledge professionals. There is a general difficulty in clear investments in training with business results.
This is the reason why the term “performance” has been installed in the vocabulary of the learning area.
Integrating training and business
Business managers understand the process by which the strategy must be transferred to people so that everyone understands how it affects their daily work. In short, something as simple as publicizing what is expected of them, what they should do, and what is the difference between the latter and what they actually do today. Training professionals must learn to connect their learning activities to both annual business results and longer-term strategic goals.
How can we measure the value of this intangible asset? Or better yet, how can an organization connect the creation of this intellectual capital with improving profitability, growth, and its long-term competitive position?
The Balanced Score Card is a performance improvement tool. The Balanced Score Card (BSC) was created by Kaplan and Norton in the early 1990s as a simple tool to improve organizational performance.
Its simplicity lies in three pillars:
- Understand the strategy of the organization.
- Translate the strategy into metrics and goals.
- Align people around these metrics and objectives (and therefore around the strategy).
The problem is that although the three pillars are easy to understand, putting them into practice is not. The difficulty that we find in the day-to-day use of the BSC can be summed up in the lack of a tool that allows us to “describe” the strategy in a clear and simple way. If it is not possible to describe something clearly, it is very difficult for us to be able to measure it. And if we do not measure, alignment, a necessary condition for optimal performance, will not be possible.
The Strategic Map.
The “Strategy Map”, designed at the beginning of this century as a tool for describing the strategy, has become a powerful weapon of communication and alignment.
The strategy map provides a visual framework that shows the relationships between business results (financial results and customer satisfaction) and strategic inputs (operational processes and human capital). The simple and clear way in which this map is conceived allows for the alignment of all the activities of the organization with the strategy.
One of the most important activities in this alignment process is the training and development activity (Improving Human Performance). As the people educated and trained to meet the requirements of the strategy are more valuable, the alignment of the learning activities with the strategy is a source of value.
Therefore, the Training and Development professional must get used to thinking strategically. This thought form is a “mental state.” It is a way of contemplating the company’s value creation processes that allow the creation of an appropriate context for its actions.
This perspective is not unique to learning activities, but the leverage.
- Connecting strategy and operations
- Learning and Intellectual Capital.
- The dynamics in which the leading sectors of the world economy move is defined by three basic aspects:
Speed, which requires a greater capacity for adaptation and organizational change (one of the main drivers for learning activities).
The internal struggle for resources requires that all investment activity demonstrate its return and its contribution to achieving financial objectives.
The intangibility of the most valuable and differential assets that requires an effort to clarify the impact of these assets (such as intellectual capital and knowledge) in the creation of value.
ROI is traditionally the most used metric to analyze the return on investment. However, when it comes to intangible assets, the use of ROI has always had skeptics who see this metric as excessively limiting.
In this sense, the BSC and the strategic map are two tools that allow the creation of a conceptual framework that connects the investments in intangible assets and the results of the organization for the client and the shareholder, showing their cause-effect relationship.
From “Training And Development” To “Performance Improvement”.
The creation of knowledge and the development of people in the organization can be considered good in itself. ( Although at this moment it may not seem so ) But finally, the effective correlation between development and results must be the objective of Human Capital professionals.
Training and development activities should therefore be considered according to their effectiveness in improving people’s performance. And for their integration into business processes to be deep, they should even change their name and go from being called “Training and Development” to being known as “Improving Human Performance”.
In this sense, the BSC and the Strategic Map are tools that significantly expand the framework of possible activities that can be designed in order to improve performance in a specific aspect of the business.