Volume 22: Realigning Return on Learning Investment

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Highly engaged, trained employees surrounded by a purposeful learning and development team are necessary to achieve desired business results. Yet in most organizations, it’s often difficult for C-suite members to see the value they expected from their learning programs—leading to the potential of budget cuts, a risk no organization wishes to face.

Uncertainty in the local economy, a move toward automation, or global influences such as ever-changing trade agreements between neighboring countries or political unrest in a region, impact programs in all types of organizations causing them to become frozen, reduced, or eliminated. The solution to prevent this has never been more evident than now: learning programs must get connected to hard business results if funding is to be protected.

Yet, like most learning and development professionals, there are some daunting roadblocks to overcome.

  • Over 50 percent of learning and development is wasted.
  • What senior executives want from learning and development is rarely measured. One study found that 96 percent of Fortune 500 CEOs want to see the business connection, yet only 8 percent see it. And 74 percent want to see ROI, yet only 4 percent see it.1
  • Very few learning and development professionals have data to show top executives that their programs make a difference.
  • Most executives perceive learning and development to be a cost, rather than an investment. Thus, in times of economic anxiety, it’s the first budget to be cut—when, really, it should be increased.
  • Hard skills are widely perceived as being far more valuable than soft skills—even though data shows the payoff of soft skills is higher.

How do we correct these persistent dilemmas? The solution is by using design thinking.

What is Design Thinking?

Rooted in innovation, design thinking suggests that goals should be set for the desired outcome and the entire team should be mobilized to design the product, service, or process to achieve the goals. More specifically, design thinking involves these elements:

  • Method to take on design challenges by applying empathy
  • Approach to collective problem solving
  • Framework to balance needs and feasibility
  • Process to solve complex or wicked problems
  • Aptitude for curiosity and inquiry
  • Problem-solving approach to handle problems on a systems level
  • Culture that fosters exploration and experimentation2

Relating this process to learning and development means that all stakeholders should work in a collaborative way to design for the desired results from learning. The results desired could be one or all of these levels of outcomes: Reaction, Learning, Application, Impact, and possibly ROI. These outcomes represent a logical flow of data from a classic logic model. In today’s economic climate, the desired level of results is impact, expressed as improvements in output, quality, time, and costs.

This can be accomplished with eight steps to design for the needed business impact.

1. Start with Why: Align programs with specific business measures.

2. Make It Feasible: Select the right solution to drive the business measures.

3. Expect Success: Design for business results. Objectives are set to push accountability to the business impact level, with reaction, learning, application, and impact objectives. Designers, developers, facilitators, participants and managers of participants know what they must do to deliver business results.

4. Make It Matter: Design for Reaction and Learning, ensuring that the content is important, meaningful, and actionable, setting the stage to drive business results.

5. Make It Stick: Design for Application and Impact, ensuring that a participant is using the learning (Application) and that it has an impact. Results are measured at both Application and Impact levels and barriers must be removed or minimized.

6. Make it Credible: Measure results and calculate ROI – With impact data in hand, the results must be credible. The first action is to isolate the effects of the program on the impact data. If ROI is planned, the next action is to convert data to money. Then the monetary benefits are compared to the cost of the program in an ROI calculation. This builds two sets of data that sponsors will appreciate: business impact connected directly to the program and the financial ROI, which is calculated the same way that a CFO would calculate a capital investment. Evaluation at this level is pursued very selectively, usually involving 5-10% of programs each year.3

7. Tell the Story: Communicate results to key stakeholders – Reaction, learning, application, impact, and perhaps even ROI data, form the basis for a powerful story.

8. Optimize Results: Use black box thinking to increase funding. Designing for results usually drives the needed results, but there’s always an opportunity to make the results even better. Process improvements increase ROI in the future. Increased ROI makes a great case for more funds.

Using this process almost guarantees the desired business results, because you have been intentional in the design process.

Influencing the Budget

Implementing this approach, four significant principles emerge. First, process improvement permeates the eight steps. If the desired results are not attained, adjustments are made at steps four, five, and six to ensure that the results are delivered in the next attempt. Secondly, limit the number of programs that are evaluated all the way to ROI, illustrating to executives that learning is a worthy investment. The third principle emphasizes that top executives now perceive learning as an investment; leading to funding being improved instead of eliminated. Evaluation leads to optimization, which leads to allocation of funding.4

The fourth principle states that you can assist in the decision-making process when your funders of learning and development decide how to invest their money. If learning is delivering a positive return, suggest executives invest more. It’s a logical argument and one that can transform not only the budget for learning and development but also the support and influence desired.

Following these principles and implementing design thinking will reap rewards for your bottom line when applied properly. You will then be able to measure and evaluate the impact and ROI, using the ROI Methodology.

ROI Institute’s mission is to develop, refine, and support the use of the ROI Methodology in all types of applications and settings by building serious capability in individuals. This is done through ROI Certification. Attached is a brochure that explains the ROI Certification process in more detail. ROI Certification is the most comprehensive process for gaining the skills to measure the true impact and return on investment of your programs. Participants gain expert-level knowledge of the ROI Methodology, a systematic approach to program evaluation that captures data on input, reaction, learning, application, impact, and ROI, while also identifying intangible benefits connected to the program along with barriers and enablers of success.

If you want to develop this capability, there’s an ROI Certification opportunity in Atlanta, Georgia, September 23-27, 2019, to do so.

Former L&D manager, HR executive and bank president, Jack J. Phillips, Ph.D. is chairman of the ROI Institute. World-renowned expert on accountability, measurement, and analytics and the author of more than 75 books, Phillips conducts workshops and presents at conferences throughout the world. Phillips has received several awards for his books and work. The Association for Talent Development gave him its highest award, Distinguished Contribution to Workplace Learning and Development for his work on ROI. The International Society for Performance Improvement, with whom Jack served as president in 2012-2013, presented Jack with its highest award, the Thomas F. Gilbert Award, for his contribution to human performance technology with the ROI Methodology. His work has been featured in the Wall Street Journal, BusinessWeek, and Fortune magazine. He has been interviewed by several television programs, including CNN. Jack can be reached at jack@roiinstitute.net.

Patti P. Phillips, Ph.D. is chief executive officer of ROI Institute, Inc., the leader in measurement, evaluation, and the use of ROI in learning and development. She works with organizations in more than 60 countries around the world, where she helps human resources and learning practitioners develop capability in measurement, evaluation, and human capital analytics. Patti serves on the board of Center for Talent Reporting and is an ATD CPLP Certification Institute Fellow. She also serves on the faculty of the UN System Staff College in Turin, Italy, and The University of Southern Mississippi’s Ph.D. in Human Capital Development program. Her work has been featured on CNBC, EuroNews, and in over a dozen business journals. Patti’s most recent books include The Business Case for Learning: Using Design Thinking to Deliver Results and Increase the Investment in Talent Development (HRDQ/ATD, 2017) and The Bottomline on ROI 3rd edition (HRDQ, 2017). Patti can be reached at patti@roiinstitute.net.

About ROI Institute®

ROI Institute, Inc., founded in 1992, helps organizations evaluate the success of projects and programs, including measuring the financial return on investment (ROI). Serving for-profit, nonprofit, government, and non-governmental organizations, ROI Institute’s work includes workshops, consulting, coaching, research, and publications. It operates through a network of partners and associates in the U.S. and in more than 70 countries with the help of over 100 ROI consultants. ROI Institute, ROI Methodology, ROI Certification, and Certified ROI Professional are registered trademarks owned by ROI Institute, Inc. For more information, visit: www.roiinstitute.net.


1. Phillips, Jack J. and Patti P. Phillips. Measuring for Success: What CEOs Really Think about Learning Investments. Alexandria, VA: ASTD Press, 2010.

2. Mootee, Idris. Design Thinking for Strategic Innovation. Hoboken, NJ: Wiley, 2013.

3. Phillips, Patti P. and Jack J. Phillips. Real World Training Evaluation: Navigating Common Constraints for Exceptional Results. Alexandria, VA: ATD Press, 2016.

4. Phillips, Patti P. and Jack J. Phillips. The Business Case for Learning: Using Design Thinking to Deliver Business Results and Increase the Investment in Talent Development. West Chester, PA and Alexandria, VA: HRDQ and ATD Press 2017.

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