Build a winning L&D strategy
Jonathan Kettleborough sets five rules for developing an effective strategy for your L&D department
According to the white paper Navigating the Perfect Storm in L&D by the Learning and Performance Institute1, although 81 per cent of L&D professionals surveyed by the LPI claimed that their organisation had a learning strategy, work undertaken during LPI accreditations indicate that many of these strategies are actually little more than one-year operating plans.
In this article, I will outline the five rules for developing an effective strategy for your L&D department; one that will be aligned with your business and will position you to deliver results - time and time again.
For many, strategies are 'things' generated by other people that they then have to implement, ie something that's 'done to you' rather than something 'you do'. Gaining control of your own destiny is critical for success and the ability to understand and drive strategy will enable you to truly align your department to help deliver the success of your business. If you don't have a strategy, or you have one that's not aligned, you're heading down the road towards long-term failure.
Strategy is the process for determining the choices the business needs to make - typically over the next three to five years. Some businesses will extend their strategic view to 20 years and I've even worked with companies that are looking at a 100-year horizon!
One initial problem is that the use of the word 'strategy' has been so overused as to be virtually meaningless. Strategies should be used to focus on the choices that you need to make in order to deliver success for your business - and that means understanding the strategy of your own business first.
Knowing your business strategy first
'What's the strategy of your business?'
It's a simple enough question. However, like so many simple questions, there's rarely a simple answer. Often L&D will fail to worry about the strategy of its business, deciding instead to develop a 'standalone' L&D strategy and take it from there. But you can' t just do that; if you did, you'd be failing to align within the business and, therefore, anything you developed would be no more than some random guess - hardly a professional approach. As you can imagine, there's little point in developing a strategy without first understanding the strategy of your business and this article is all about getting the balance and the outcomes right.
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It's impossible to cover all aspects of strategy within this article, so I've focused on five key issues that will help you develop a winning L&D strategy.
The five rules
There are five rules for developing a strategy. As with all rules, merely following them is not enough; you've got to work hard and make them come alive in order to stand a chance of achieving success.
The five rules are:
- start from the outside in
- keep growing and supporting the core business
- clear value propositions for the customer
- fine tune for the marketplace
- communicate clearly with stakeholder groups.
Let's look at each of the rules in turn and explain how they contribute to developing a winning L&D strategy.
Rule 1: Start from the outside in
L&D strategies often tend to be insular - they're about how individuals or departments can achieve what they want - rather than demonstrating an understanding of what the business requires.
Insular strategies focus on the 'inside' issues of your department or your skillset or your focus areas rather than on the issues affecting your business. Insular strategies are 'inside out' and tend to read something like this: 'Learning and development needs to be an integral part of our business. It should be available to everyone and be flexible to suit different learning styles and work patterns. It should meet the needs of the individual, the team both now and in the future.'
Fine words, indeed, but ones that fail to take account of what the business wants, and you ignore your business at your peril.
When we put the needs of the business first, we're in with a chance of developing an 'outside in' strategy. 'Outside in' strategies start with the needs of the business on the 'outside' and then proceed to explain how these will be met - the 'inside'
Here's an example:
'All employees need the right level of skills to deliver the corporate plan, brand values and qualities.
'We will achieve this by:
- ensuring that our approach to L&D identification and analysis begins with the linkage of objectives to corporate and departmental plans
- designing events and programmes relevant to corporate plan priorities.'
The second example puts the business first - the 'outside' - and then works towards explaining how it will all be delivered - the 'inside'. Professionally, it's a lot easier to sell a strategy that starts with the business rather than with some 'pink and fluffy' statement about being 'flexible to suit different learning styles'. Harsh words, perhaps, but, if you fall at this hurdle, you'll never recover.
Starting from the outside in achieves many things:
- it ensures you focus on the needs of the business
- it delivers strategies that will be recognised and supported
- it's more likely to gain appropriate funding and resources.
Rule 2: Keep growing and supporting the core business
Every business, no matter how big or small, has an element of core business. Core business is what keeps the organisation going year after year after year - and what normally represents the bulk of its income. For an insurance company, it could be household or car policies; for a building society, it could be the level of mortgage lending; for a retailer, it could be ladies' fashion.
As L&D professionals, you should therefore do two key things:
- make sure you're absolutely clear on what your core business is
- do all you can to assist the growth and support of your core business.
Keep your focus; question and challenge everything you do to ensure all your efforts are focused on growing and supporting your core business. If you're not helping to grow your core business, you're potentially putting in effort without result - which is a wholly unrewarding path to take!
Here's an example. Let's suppose that your business is planning to expand its telephone support team by recruiting 300 new people in the next six months. Clearly this is exceptionally important. But what are you going to do to support the new people? How are you going to help them become competent as fast as possible? What are you going to do to retain these new people in your business? If you're focusing on solving these questions, brilliant; if not, you may want to start thinking about finding a new role.
The nature of business means that businesses will change over time. Take Whitbread as an example. Once a major UK brewer and player in the pub industry, it now focuses heavily on hospitality with brands such as Premier Inn, Costa Coffee and Beefeater. As a company, it will always be looking for new brands to develop and new areas to explore but at its heart is hospitality - help to grow and support that part of the business and you'll always be on the right track.
Rule 3: Clear value propositions for the customer
If you were approached by one of your senior managers and asked what do you do around here to help us make money? what would you say? The chances are that you'd be rather flustered and blurt out something that isn't necessarily that positive!
L&D professionals don't tend to talk that often about creating value propositions but they are essential for developing a winning L&D strategy, as I'll explain in a little more detail.
A value proposition is a promise of value to be delivered and a belief from the customer that value will be experienced. There are two sides to a value proposition. On one side you're making 'a promise that value will be delivered' and on the other side there's 'a belief from the customer that value will be experienced'.
At the heart of the proposition is the word 'value'. As L&D professionals we use words like 'value' all the time, but we may not all agree on what we actually mean by it. Here's one view on what value means within L&D:
value = benefits - costs
The value of what we offer is the benefit we bring minus the cost of delivering that value.
Although the concept of sitting down and actually working out a value proposition could well be an alien activity, as L&D professionals you're competing on a daily basis for the limited resources your business has at its disposal and a well thought out value proposition demonstrates that you clearly understand the needs of your business and are responding accordingly.
According to Neil Rackham, a best-selling author on the subject of sales and marketing, there are four main components of a value proposition. These are:
Let's look at each of the four components of a value proposition.
Capability Within the L&D profession, capability is the knowledge, skills and experience to deliver. You may not have all the capabilities in-house - and therefore may have to outsource or hire consultants - but, without the ability to offer the capability, you cannot begin to build a value proposition.
As L&D professionals, you may already have certain capabilities within your business, such as delivering classroom training, but you may want to branch out into other areas such as e-learning. Clearly, as a provider of classroom training, you'll already have capabilities such as:
- adult learning theory
- learning analysis and design
- designing great interactive learning
- understanding the needs of learners.
So you may already have a number of the elements needed to demonstrate a capability in e-learning, but not all of them. It really doesn't matter how you add this capability into your mix; it could be by recruiting experienced resources or by partnering with an external e-learning provider. Either way you must be able to demonstrate your capability, otherwise you cannot build your value proposition.
Impact It doesn't matter how much money you spend, or how many experts you involve, or how long it takes to deliver a solution; the fact is that you must deliver an impact. Impact can be measured in a host of ways, but essentially it's all about the positive change that you've made in your business or for your customers.
Impact could be:
- reduced costs
- increased process speed
- fewer errors or accidents
- increased revenues and reduced waste
- reduced time to competence for new entrants.
The key here is that just doing 'something' is not enough. You must be able to measure impact, or show how you made an impact or show what impact you are likely to achieve, otherwise you'll be dead in the water. The best way to demonstrate impact is by some form of financial measure, although I realise that, within the L&D industry, it's never always that simple!
Proof When delivering a value proposition, it's vitally important to be able to show real proof for what you're suggesting. In our profession, demonstrating proof isn't always that easy. For example, try finding real proof of any of the following:
- e-learning is more effective than classroom training
- people fail to learn through classroom training or through formal lectures
- the correct use of psychometric tests means you hire better employees
- multiple choice questions are the best type of question to use when you're assessing competency.
As L&D professionals, we must always look for proof to substantiate the decisions we make. Relying on statements such as 'I think ...' or 'it's a widely held belief that ...' is a recipe for disaster. You need to show real evidence whenever possible.
Cost When constructing your value proposition, the cost of your chosen approach is critical. Although the L&D interventions you deploy are unlikely to cost billions of pounds, their cost will still have to be offset by the benefits. Here are two examples:
- developing an e-learning course for a very small group of people that's only going to be used once may not ultimately be cost-effective
- developing any people intervention when you have little or no capability may cost far more (certainly in terms of man-hours' effort) than buying a solution direct.
You therefore need to be able to calculate accurately and predict the cost of various interventions in order to build up an accurate value proposition. Remember that some companies will not reveal exactly how much they invested in a programme because of commercial confidentiality issues. However, as long as you can show some financial saving or reduction, this is fine. And remember too, costs can differ wildly and the cheapest approach isn't always the case in the long run.
L&D professionals are increasingly battling to secure funds and resources for their initiatives. Resources will always be tight within business, but the development of a value proposition is an excellent way for them to put forward their case in a structured and logical manner; one that will appeal to senior executives and demonstrate that you have the needs of the business at heart.
Rule 4: Fine tune for the marketplace
Take a few moments to think about the last time you really took one of your L&D interventions or processes and fine-tuned it for the marketplace. Let's be really honest - do you constantly fine-tune your offerings for the marketplace or do you develop an intervention or process, then leave it alone, saying 'that'll do'? I suspect it's probably the latter!
For L&D professionals, fine-tuning can include:
- constantly updating L&D interventions with relevant and up-to-date case studies
- taking advantage of new technologies, eg social media or using the internet for initial applicant screening or for reaching targeted candidates
- adapting your way of working to take advantage of newer communication tools, eg Skype, virtual classrooms and virtual meetings
- staying abreast of the latest trends and developments, not only from standard L&D publications but also from sources such as Harvard Business Review,The Economist, Wired and so on.
L&D professionals are relatively quick to accept and implement new technologies, approaches and practices but fine-tuning for the market is about much more than that; it's about understanding your business and how the environment in which it operates is changing - and spotting opportunities you can exploit to benefit your business.
One example is the way in which the recruitment market has been transformed by the use of online technology.
Rule 5: Clearly communicate your strategy within the organisation and among other external stakeholders
I find it amazing how many L&D professionals I've talked to about strategy over the years have toiled to develop theirs, only to confine it to a dusty shelf and wonder why they then fail - after all, a winning strategy is of little use if nobody knows anything about it!
Sharing your strategy, both internally and externally, is an excellent way of signalling your intentions and gaining buy-in for what you're about to embark upon. Sharing it demonstrates that you not only 'get' the key issues and challenges facing your organisation but that you also have appropriate solutions and mitigations in place. A good strategy says to your business 'we understand the issues and are well placed to deal with them'.
You may be horrified that a strategy could possibly be shared externally, but there are few large companies - and even small ones - that couldn't achieve their strategy on their own. In order to be successful, they have to share their strategy - or at least part of it - to remain successful. Here are two examples:
- airlines need to signal their intentions well in advance to ensure that aeroplane manufacturers and engine builders understand, and can respond to, their needs. After all, an aeroplane is hardly an off-the-shelf item! Perhaps the airlines want long haul, perhaps short haul. They almost certainly want cost-effective and fuel-efficient engines. None of this can be achieved without sharing a strategy
- major energy companies need to share their strategy in order to stimulate the supply chain. Nuclear power stations and large-scale wind farms need a massive investment in infrastructure and this cannot happen overnight. Indeed, it takes many years for supply chains to fully reach the levels required. Imagine just turning up on the doorstep of an organisation and trying to order 200 wind turbines; it's just not going to happen!
Naturally, there are certain market-specific and product-specific elements of your strategy that you'll keep hidden. Apple is certainly űbersecret when it comes to new products or release dates, but it could not bring new products to market without sharing its strategy with the necessary suppliers and manufacturers.
I don't intend to tell you how you should best communicate your strategy - there are dozens of books on the market to help you do that - but what I would say is that you absolutely must get your message out, simply and clearly, to all your stakeholders. For L&D professionals that should mean:
- senior executives
- team leaders
- employees - both full-time and part-time
- contract staff and key business partners
- external suppliers.
Remember that communication is not a one-off activity. You'll need to communicate continuously with your stakeholders to keep them informed about changes, progress and results and, of course, be prepared to answer honestly the questions that they may raise.
Strategy is an often-used but ill-understood word. In this article you've learned about the five strategy rules that go together to make a great strategy. You've also learned about value propositions and the need to fine-tune your strategy, as well as ensuring that you communicate your strategy in an honest and open manner to all of your key stakeholders
Remember that a strategy is your response to business issues - it is not solely dedicated to showing how clever you are or how you plan to solve world hunger - and always start from the outside in!
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