Chapter Seven
Measurement of Alignment
One of the new measures in our Learning Impact Measurement Framework is the measurement of “alignment.” Alignment is a critically important topic to training managers. When L & D managers are asked what their biggest challenges are, “being better aligned with the business” continually comes up as one of the top three challenges. We have found that business alignment is one of the most important and challenging areas to focus on.
What does the term “alignment” mean and how can you measure it?
To put it simply, alignment means working on the right programs at the right time. It means that your program investments are focusing on the most important and urgent business problems. It means that management (HR and line-of-business) understands and agrees with the allocation of resources. If the training function is well-aligned, the employees and executives in the organizations can say, “Yes, the training organization is delivering strategic value to our organization.”
Why is alignment so difficult? Because training organizations are continuously bombarded with demands for training programs in hundreds of areas across the organization. If you consider the number of different skill areas needed in a five-thousand-person company, the potential areas of investment are staggering: sales, product training, customer service training, technical education, management and leadership training, product training, IT training—the list goes on and on.
Sound business alignment cannot be created without an integrated budgeting, management, and governance process—and measurement is critical to this process. The process should solve the following problems:
• How does a training manager decide where to spend money?
• How does a training manager decide which programs warrant heavy investments and which should be outsourced to low-cost commodity providers?
• Should training focus on the manager who screams the loudest or the business unit with the most money?
• How can the training organization meet rapid demands for new training on products, processes, and services that come along during the year?
• What expectations should business units have for the timeliness, relevance, and investments in different programs?
Our High Impact Learning Organization research1 finds that there is a set of well-designed best-practice planning and budgeting processes that make this process workable. Many training managers are overwhelmed with the demands for their services. The training manager’s job should not be to try to predict or decide where these priorities are but, rather, to implement a planning and governance process that makes sure that line and HR executives participate in the planning process and understand where resources are invested.2
For measurement purposes, however, the following examples will explain some best-practice approaches to build and measure alignment.
Caterpillar’s Planning and Budgeting Process
Let us examine the example provided by Caterpillar University, a well-established corporate training organization, which supports a wide variety of needs for more than 95,000 employees in nearly two hundred countries. A key to Caterpillar’s alignment success is their budgeting and planning process.
At Caterpillar, each business unit creates its own business goals, aligned to the corporate goals. A business unit that manufactures tractors in Japan, for example, must create plans to meet the company’s market share, sales, and profit goals for Japan.
In the development of these plans, the business units create individual learning plans for their employees. These divisional learning plans are then “rolled up” into business unit learning plans, which are then shared with Caterpillar University.
As Figure 7.1 shows, each of these divisional learning plans is rolled up by Caterpillar University into a Caterpillar Enterprise Learning Plan. This enterprise plan is the sum total of all individual and business plans, driven by the enterprise’s business strategy.
Figure 7.1 Alignment and Business Planning at Caterpillar
This is certainly a powerful process if conducted once a year; however, the way it stays aligned is through regular meetings with line-of-business directors to make sure that the learning plans (that is, programs being developed and delivered) are kept up-to-date with changes in the business.
CNA Insurance Training Investment Model
Another example of a powerful and easy-to-use planning and alignment approach is the model developed by CNA Insurance—its “learning investment portfolio.” In this model, all training programs are mapped against four quadrants, as shown in Figure 7.2.
The horizontal axis indicates the “strategic nature” of the program: Is it an operational program to “run the business,” which drives cost-reduction or productivity (to the left)? Or is it a highly strategic program to “advance the strategy,” which drives competitive advantage (to the right)? The vertical axis indicates whether the program is available “off the shelf” (bottom) or whether it is unique to CNA (top).
Figure 7.2 CNA Learning Investment Portfolio
CNA works with line managers to take each individual training program and map it to these four quadrants. Lower-left quadrant programs are “commodity” in nature—they are outsourced to e-learning or other external providers. Lower-right programs are more highly funded, but still outsourced to third parties for development. Upper-left programs are built internally, and are funded to meet operational and business planning demands. Upper-right programs are highly funded to drive strategic new initiatives.
To make this process rigorous, CNA makes fixed investment decisions that target that 40 percent of all funding goes to the upper right, 20 percent to the upper left, 30 percent to the lower right, and 10 percent to the bottom left (these numbers are only illustrative). The key to this model is how the map is built: CNA creates this portfolio map through a series of planning meetings with business managers so that each manager can see the relative priorities of his or her needs against the overall organization.3 Figure 7.3 shows an example of such an investment allocation.
Again, the key to this model is engagement by line-of-business managers on a continual basis, so that decisions can be made in an open manner. It also allows everyone in the organization to see the tradeoffs L & D must make to keep its budget under control.
How Do You Measure Alignment?
Assuming you implement such a planning process, how can you then measure alignment over time? How can you institutionalize and monitor it? Here you have many easy-to-implement options.
Figure 7.3 CNA Sample Program Investment Allocation
Measure Alignment of the Overall Learning Organization
To build and measure overall alignment, you must have an established governance process. The term “governance” refers to the processes you use to set priorities and make ongoing decisions.
Typically our best-practice research indicates the organizations need three levels of committees to establish governance:
An executive steering committee that sets annual budgets and long-term strategy and approves large capital investments;
A series of “learning councils,” with representation by both L & D and line-of-business representatives, which reviews plans monthly or quarterly (these are often organized by discipline or business unit); and
A number of internal staff meetings within the training organization that serve to manage ongoing operations.
The key to making this work is a written learning business plan. Our research shows that fewer than 50 percent of training organizations have such a plan. If you have such a plan, it should establish goals for program volumes, strategic investments, and key program areas.
The steering committee should review progress against the annual plan and budget. It should meet regularly and have executive-level sponsorship (VP of HR or higher). At Textron, for example, the Executive Council includes the senior vice president of strategy and planning.
All new programs and major changes should require line-of-business signoff, through the signoff form. These approved programs should be monitored regularly, and measures such as adoption, utility, satisfaction, and compliance should be reviewed at each meeting of the appropriate learning council. The purpose of the learning council is not only to “report on progress” but also to enlist help. If a certain program is failing (for instance, low attendance), it is in the interest of the business unit managers to help it succeed. Each program should have its executive sponsor also listed, so that representatives can go back to this sponsor if higher-level communication is needed.
Organizational alignment requires all these steps. And the measurement process should consist of a dashboard of measures for each program, organized by business unit, that shows the business unit managers the health and status of each training program. Some organizations include a checklist for each program to monitor its progress through the check-off process. Others implement lists of programs that are going through various stages of signoff and their stated business benefits (“potential ROI”). You can easily implement such a process as part of your quarterly or monthly program review meetings. Some excellent examples of organization alignment reports are shown in the Defense Acquisition University screenshots. (See Appendix IV: Examples of Learning Measurements).
Measuring Alignment of Individual Programs
On a program-by-program level, alignment measures should track how well the training organization is communicating with and listening to line managers. You should create a spreadsheet of the impact measures you have decided to track, such as adoption rate, ongoing satisfaction and utility measures, and learning results (if measured). Each line of this report should also include the program name, its “potential ROI,” and sponsor.
You can also track the performance consulting for each program by including a short phrase or paragraph in the report that summarizes the key root problems this program is attempting to solve.
If manager assessments are being used, they can also be tracked in this dashboard. How well does the manager rate the value of this program against the time invested by his or her employees? (This is a “utility” or “alignment” measure that can be captured through a manager survey or interviews.) How well do learners rate their managers’ support for their attendance and application of the skills obtained in this program? (This is an “alignment” measure that can be captured through an end-of-course survey.)
Manager alignment is a measure you should strongly consider. Here is an example of a major program that suffered from lack of management alignment:
In one division of KPMG, for example, many of the training programs are developed and delivered by a national training organization. This organization surveys the regional accounting and consulting teams, creates programs to meet perceived demand, and then launches and manages these programs. Individual consultants take these programs and often rate them very highly. Because the training organization is separate from each geographic and industry unit, they have to balance needs for professional development with specific industry and certification requirements.
The CLO reviews satisfaction surveys for each course and finds that most programs are rated highly. However, when the CLO started to ask employees how well programs were supported by their line-of-business managers, the ratings were fairly low. Many programs were not supported by line management.
Why was this? The CLO believes that line managers are not familiar enough with the learning offerings and that the company is letting employees “self-select” what learning they take. Although this can be highly valuable in building a self-learning organization, it is a sign of poor alignment. Either line managers do not understand or do not appreciate the value of the learning programs, or perhaps the L&D organization is not focusing on the most urgent business problems. This is a perfect example of where the Kirkpatrick model breaks down. The training may, in fact, improve job performance; however, the programs being delivered may not be focusing on the most important areas of performance to the line organization.
There are many potential solutions to this problem: alignment with performance planning, a more integrated planning process, or reorganizing the learning organization into line-of-business support teams.
Using indicators and qualitative interviews with line managers, training organizations can create their own scorecards of alignment. A manager or learner indicator, such as “How strategic was this training program to your most current and urgent business needs?” is a perfect way of measuring alignment.
I recently asked the CLO of a major telecommunications equipment provider how she measured the business alignment of each program. She had a simple answer: “I ask my learning managers to tell me the most strategic problems in their customer organizations. I then compare these notes to the information I hear from these customers themselves. If they match, we’re fine—if they don’t, I know I have a problem.”
Sophisticated organizations, such as the Defense Acquisition University (DAU), regularly poll their business executive customers to ask such questions. Sometimes a program is urgent but not strategic (for instance, a mandatory compliance program); at other times, a program is strategic but not urgent (for instance, CNA’s underwriting training program). The only way to make sure the alignment is in place is by continually measuring alignment and developing a process for regularly validating priorities with business managers.
Notes
1. For more information, see The High-Impact Learning Organization: WhatWorks® in The Management, Organization, and Governance of Corporate Training. Bersin & Associates, June 2005 and new release coming in 2008. Available at www.bersin.com.
2. Ibid. Also available are High-Impact Learning Organization workshops at www.bersin.com.
3. For more information, see The Training Investment Model: How to Allocate Training Investments for Optimum Business Impact. Bersin & Associates, February 2005. Available at www.bersin.com.