Best supporting role
Rob Caul explains how L&D can support the organisational strategy
At long last, for most organisations, the economic woes of the past five years appear to be lessening. Looking towards 2014, the future looks brighter than it has done for quite some time and with it comes the need for a renewed sense of direction from leaders and managers to drive a positive transformation of the business and the bottom line.
L&D sits at the heart of organisational success and, in the coming year, will have an increasingly important role to play in supporting business change, helping organisations prepare for future growth and closing long-term skills gaps.
Unfortunately, though, all too often some L&D functions rely on strategies grounded in the past or the 'here and now', and their failure to focus on the longer-term needs of the business means they fail to realise the full potential of learning to have an impact on business results, improve employee engagement and drive competitive advantage and long-term growth.
So how can L&D best support the organisational strategy and business change? How does today's L&D function need to evolve? And what other important factors need to be considered when developing an effective learning strategy for 2014?
Given UK business leaders consider the lack of skills within the country's workforce to be one of the greatest threats to business growth, it is imperative that skills development is put at the heart of organisational development strategies. PwC's 2013 Global CEO Survey1 found two-thirds of the CEOs in the UK who took part reporting a lack of key skills hampering their companies' growth prospects, with the survey reporting the problem to be more acute in the UK than in any other European country.
These findings are backed up by the latest annual Hays Global Skills Index2, which shows that the UK's economic recovery is exposing skills shortages across multiple industries, again with the UK suffering one of the worst shortages in Europe.
In the current economic climate, having a planned, systematic approach to building capability and improving organisational effectiveness is essential. Clearly, there are a number of areas to consider.
Focus on long-term needs
The best L&D functions develop strategies driven by the longer-term needs and strategic objectives of the organisation.
In order to have a positive impact on business outcomes, L&D needs to be involved at a strategic level of the business so that it has a clear understanding of not only the short-term operational plans but, more importantly, the medium- to longer-term organisational goals. It's essential to have an insight into how the organisational structure needs to change to meet business needs and how this changes the organisation's people requirements now and in the future.
Without doubt, one of L&D's key roles in supporting organisational strategy is to help the organisation prepare for the future by developing capability - this means ensuring the organisation is 'people ready' and can continuously adapt to changing market conditions in order to meet the business goals. Aligning development activities with long-term business goals, ensuring that key skills are developed (particularly future leadership talent) and closing longer-term skills gaps are all imperative.
What skills does the business need now, and in five or ten years' time? Is enough being done to ensure that tomorrow's leaders are being successfully grown and nurtured from within the organisation? Has high-potential talent been identified effectively using a pragmatic diagnostic-based approach? And does the organisation have a robust talent pipeline in place? These are just some of the questions L&D professionals need to address.
Invest in the people who can create the most value
In order to support the organisational strategy as effectively as possible, the L&D function will usually have to make some tough decisions about where best to invest resources in order to achieve the strategic objectives. For some organisations, this will mean a shift in focus from closing the most pressing skills gaps to directing budgets towards L&D initiatives that will create the most value in the longer term.
There are likely to be many sources of need for training budget from an organisational, departmental and individual perspective. The L&D function will need to consider what core competences are required, and ensure that there is a balance between technical and professional skills as well as management and leadership development initiatives. All too often organisations place less emphasis on soft skills development; but communication, negotiation and conflict resolution, as well as, for example, team-building skills, are all increasingly important in today's diverse workplace.
Also, it is worthwhile investing resources in trying to determine which individuals have the potential to create disproportionate value for your organisation so that you can ensure that L&D resources and training spend are being directed to the right people within the business.
From a talent management perspective, 'some', rather than 'all', of our people are our biggest asset is perhaps a more fitting mantra for today's highly competitive global workplace. In order to prove its worth, L&D needs to have a clear handle on which talent is going to be most critical to executing growth strategies so that it can be motivated, engaged and developed accordingly.
Investing in talent is essential from a talent retention perspective across all businesses. As the economy picks up, the issue is increasingly pertinent in the middle market, which delivers more than a third of economic contribution. According to GE Capital's recent report, Leading from the Middle, retaining talented employees is the top challenge facing mid-market UK companies, cited by 26 per cent of the businesses surveyed3.
Prioritise the development of leadership talent
When an organisation has come through difficult times, it takes a skilled manager or leader to take employees along a new path and ensure they are motivated, engaged and focused on the goals that lie ahead.
The need to invest in today's managers by giving them the skills and confidence they need to manage change and lead effectively, has never been a more important issue for L&D.
Today's Generation X managers (born 1965-1981) were among the key casualties when it came to making cuts to training budgets during the recession. As a result, these managers now lack the core skills for leading in today's increasingly cross-generational workplace, which will see five different generations working side by side when Generation Z (born after 1991) enters the workplace shortly. Generation Z has the potential to cause the most challenges for managers: having grown up in the midst of the digital and mobile revolution, they will bring their own set of unique experiences and expectations to the workplace.
The extent and implications of Generation X's leadership skills gap is severe. A recent Chartered Institute of Personnel and Development report, Real-life leaders: closing the knowledge-doing gap, reveals that 36 per cent of the line managers surveyed have not received any training for their role and that time for effective line management is too often squeezed or lost in favour of more immediate task-orientated priorities4. With 24 per cent of the managers facing situations in which they often have to put the interests of their organisation above the interests of their team members, important relationships that could otherwise drive high performance working are potentially being damaged.
The main leadership skills that organisations currently lack are change management, performance management, people management and coaching/mentoring/developing staff, with around half of organisations surveyed in the CIPD's 2013 Learning and Talent Development Survey reporting skills gaps in these areas5.
The L&D function must be proactive in improving the skills of leaders, helping them to think in a more strategic and future-focused way and enabling them to achieve the organisation's strategic goals. Also, there is a clear need to support managers and leaders in creating a cohesive working environment in which every generation works in harmony to their full potential.
A strong, sustainable organisation draws its strength from all employees - from whatever generation - working together for the common corporate goal. The challenge is how learning strategies can reflect this new reality and act as a bridge to engage individuals and manage talent across generations. Get it right and you put yourself in pole position to enjoy significant competitive advantage.
The importance of an integrated approach
In order to support organisational strategy, ensure value from L&D resources is maximised and to create a true learning culture, L&D needs to be aligned not only with corporate strategy to add value to organisational performance but with other core interdependent HR processes including performance management, talent management, succession planning, career development and benefits/rewards.
Globalisation and the advancement of technology are continuing to drive the trend towards integrated learning and talent systems capable of providing an enterprise-wide view of critical information, enabling more objective decisions about learning and talent to be made. In today's increasingly complex and multi-dimensional workplace, integration helps ensure a uniform approach to managing talent, closing skills gaps, preparing for the future and ensuring that training budgets are channelled where they are most needed.
Integrated systems make it easier to process, analyse, measure and report on learning and talent initiatives and, ultimately, can help improve performance, productivity and long-term growth - the holy grail of L&D strategies.
A further benefit of a more streamlined approached is that L&D leaders can focus more time on becoming a strategic partner to the business. This means dedicating more time to truly understanding what makes the business tick, listening to what the key pain points are, and finding ways to achieve organisational goals more easily or quickly.
As a direct result of the recession, L&D has had to become more business-focused and, as the economy continues to recover and the workplace becomes more multi-dimensional, the need to be a strategic partner to the business is only going to grow.
Evaluate what makes a difference
In order to ensure training resources are used for maximum impact in 2014, it is worthwhile evaluating which training programmes and techniques have added tangible value to your organisation during the past year or so.
The CIPD's 2013 Learning and Talent Development Survey shows that, for the last five years, on-the-job training, in-house development programmes and coaching by line managers have ranked among organisations' most effective learning and talent development practices.
Meanwhile, the proportion ranking e-learning methods among their most effective methods is slowly rising, with three-fifths of respondents finding it to be a very effective method of supporting learning. The vast majority of organisations surveyed agreed that e-learning is more effective when combined with other types of learning, making it ever-more important for organisations to develop the 'perfect blend' of learning.
While it's important to assess what learning tools work best, make sure you avoid getting too hung up on the delivery method used. Instead, focus on the business problem you need to solve and how the training supports the organisational strategy rather than the tool or process itself.
Assessing the impact of L&D is particularly critical in today's cost-focused business environment in which accountability is key and the L&D department must demonstrate its worth. However, for many organisations, measurement remains an extremely challenging issue. Typical barriers include managers and leaders failing to prioritise measurement and difficulties in gaining access to consistent business data.
Those L&D functions that appear to be leading the way in evaluation assess progress against strategies on a regular basis by using a variety of relevant results-orientated metrics that track contributions to business performance and the bottom line. But remember, establishing metrics that link learning to the bottom line shouldn't be the sole responsibility of HR and L&D departments - line managers, finance directors and senior leaders need to be included to ensure the value of training can be measured in terms of the effect on business goals and the bottom line.
As the economy continues to improve, L&D has an essential role to play at both a strategic and operational level in supporting business change, organisational agility and long-term growth. Success will most likely depend on having a robust learning strategy centred on helping the business prepare for the future and, in particular, developing leadership talent and closing longer-term skills gaps.
Next year is set to be a demanding one for the L&D function. L&D professionals who can demonstrate their ability to be ever more strategic, creative, agile and accountable in supporting organisational strategy will no doubt deliver greater value to the business.
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