2012: The Modern Learning Organization: A Path Forward

Transcription

1 2012: The Modern Learning Organization: A Path Forward Introduction and Program Background Human capital theory seeks to explain the outcomes and antecedents of individual investment in education, training and organization knowledge creation. Human capital theory was developed by Theodore Schultz (1961) and Gary S. Becker (1964). Their central thesis states that an education enhances a person s skill level and thereby his or her value to an organization. Since then, Peter Senge suggested five disciplines for the future learning organization (Senge, 1990). In the 21st century, learning organizations need to take a reflective look at the L&D industry. One way to do this is to examine elite learning organizations. In the modern learning organization, the learning and development functions are mandated to enhance individual human capital and drive overall workforce performance in an effort to yield positive returns. Positive returns allow organizations to contribute to the advancement of their industries. As Margaret Blair (2011) states in The Oxford Handbook of Human Capital, the idea of human capital has proved to be an extraordinarily evocative and powerful way to frame economic discussions about factors that lead to economic growth or to better performance in firms, which is in alignment with the mission of the LearningElite benchmarking program. Thus, it is critical that L&D organizations function at the highest levels to ensure they are contributing across what Michael Porter (1998) refers to as the organization and industry value chains. To provide full value to the company, learning leaders must involve elements of the value chain they control (Elkeles and Phillips, 2007). Taken together as a whole, the L&D function, the organization and the industry are global citizens. All have direct or indirect social responsibilities (Figure 1). Forward-looking companies have couched the ethos of a corporation s responsibilities to its own workforce, and to the societies and environments in which it operates (Hay Group, 2011). As shown in Figure 1, L&D organizations have an obligation to ensure there is a contribution link between the function and the field of learning and development. L&D organizations are not only consumers of L&D information, but have an obligation to contribute to the self-generating field of learning and development. By sharing lessons learned and better practices, other L&D functions are able to benchmark themselves and collaborate with other professionals. Through the 2011 LearningElite Annual Report, webinars, CLO Symposium sessions, white papers and the LearningElite Virtual Forum, the Human Capital Media (HCM) Advisory Group, the market research division of Chief Learning Office magazine, proactively shares information with the L&D field to raise awareness and for benchmarking purposes. FIGURE 1: L&D Value Chain Contribution Model Global Citizen Industry Organization Learning & Development Field of Learning & Development

2 FIGURE 2: LearningElite Model LEADERSHIP COMMITMENT LEARNING STRATEGY LEARNING EXECUTION LEARNING IMPACT (INTERNAL) BUSINESS PERFORMANCE RESULTS (EXTERNAL) At a macro level, the L&D Value Chain Contribution Model illustrates the responsibility of the L&D organization. To that end, what characteristics do high-performing L&D organizations possess that enable them to successfully traverse the organization and industry value chains to become invaluable global citizens? In an effort to benchmark and identify the world s elite learning organizations, Chief Learning Officer magazine s editors and the HCM Advisory Group established the LearningElite benchmarking program in The intent is to provide the learning and development field a transparent benchmarking program that also recognizes the efforts of learning organizations across the globe. The LearningElite benchmarking program is structured around a five dimension model (see Figure 2) Dimension 1 Learning Strategy Dimension 2 Leadership Commitment Dimension 3 Learning Execution Dimension 4 Learning Impact (Internal) Dimension 5 Business Performance Results (External) This model highlights critical characteristics of a successful learning organization, starting with leadership commitment, a learning strategy aligned to organizational strategy and a sound approach to execution that delivers internal impact and business results. These are the functional components of a high-performing organization with a strong learning culture dedicated to driving competitive advantage. The five dimensions are explained in more detail in the 2011 version of the Modern Learning Organization: A Path Forward white paper found here ( The 2011 finalists are listed here ( An analysis of the 2011 LearningElite organizational data and the full selection process is outlined in the 2011 LearningElite Annual Report ( The report also makes note of common practices across the LearningElite organizations and cites some of the noteworthy, unique practices in each dimension. Finally, a theoretical learning organization of the future is described incorporating some of the elite practices identified. To further illustrate program transparency, the 2011 judges scoring rubric is available in the report. To date, a robust benchmarking program has never been established in the L&D field. Several LearningElite organizations and field experts have stated that the rigor of the application process is unparalleled in L&D and they are pleased to see the advancing standards. Generation and publication of this annual report provides the L&D field with an amalgamation of better practices and a synthesis of relevant research. This annual report can be used as a benchmarking tool itself. Finally, this annual report is evidence that Chief Learning Officer is committed to raising the bar in the L&D field by delivering a robust, transparent and engaging benchmarking program. 2 For more information or to download the 2012 LearningElite application go here: CLOmedia.com/elite

3 LearningElite Program Benefits There are numerous benefits to organizations applying to the LearningElite program. Applicants receive: Custom scorecard with year-over-year comparison. Discount on the LearningElite Annual Report. LearningElite finalists receive: Custom scorecard with year-over-year comparison. Discount on the LearningElite Annual Report. Discount to the 2012 Spring CLO Symposium. Invitation to present at the 2012 LearningElite Virtual Forum. Invitation for the organization s broad L&D team to the LearningElite Virtual Forum at no charge. Invitation to the LearningElite gala prior to CLO Spring Symposium. Invitation to a LearningElite finalist pre-conference workshop prior to the 2012 Spring CLO Symposium. Organizational mention in Chief Learning Officer magazine s LearningElite special edition. LearningElite Application Benefits No matter the size or nature of the organization, the LearningElite benchmarking program is a guide in the journey toward performance excellence. The program can aid learning functions in aligning resources; improving communication, enhancing productivity and effectiveness; and achieving strategic goals. Overall, the LearningElite program will allow a learning function to: Identify successes and opportunities for improvement. Jump-start a change initiative or energize current initiatives. Energize the workforce. Focus the organization on common goals. Assess organizational performance against others. Align resources with strategic objectives. Deliver world-class results. The application process in itself allows organizations an opportunity, some for the first time, to work cross-functionally and synthesize critical business intelligence. The application serves as a reflective view of the L&D function and provides an opportunity to internally assess organizational strengths and areas of improvement. As an example, one LearningElite organization reported that it developed departmental performance reviews as an output of the application process. Past LearningElite organizations and applicants have reported that the application process itself is extremely valuable. The process allows for improved alignment of plans and processes, communication and workforce morale. Organizations have employed their application data for performance reviews, as a basis for building an L&D strategy and internal benchmarking, and other award programs. The LearningElite application/self-assessment allows a learning organization to focus on issues that are relevant to the broader enterprise, such as: Customers or competitors are driving a need to change. Industry or environment is changing. Enhancing organizational learning through reflective insight. Ensuring organizational values are aligned with the LearningElite model. Envisioning a clear connection between organizational key issues and the LearningElite s systematic approach to improving organizational performance. 3 For more information or to download the 2012 LearningElite application go here: CLOmedia.com/elite

4 FIGURE 3: Sample LearningElite Scorecard LearningElite Scorecard Benefits Every applicant regardless of final placement receives a custom scorecard that can be used to track performance year over year and benchmark against other organizations across five dimensions: learning strategy, leadership commitment, learning execution, learning impact (internal) and business performance results (external). Organizations often use their scorecard in their strategic planning to focus on their customers and improve results, as well as to help energize and guide their organizational improvement efforts. Organizations committed to performance improvement have indicated that objective feedback, especially from external sources, is both valuable and essential to their success. A sample scorecard is shown in Figure 3. As seen there, the scorecard shows performance across the five dimensions measured as compared to the LearningElite benchmarks (pre-established cut scores) and the pinnacle organization that received the highest rating in each dimension. The second chart highlights a comparison among all LearningElite applicants on two axes: impact and execution. Impact is performance in learning strategy, leadership commitment and learning execution. Execution is demonstration of internal organizational impact and business performance results. Those with the greatest impact and highest execution are in the upper right. Those in the lower left demonstrated the least impact and the lowest level of execution. Only those that met or exceeded all benchmarks were deemed LearningElite. In most cases, the scorecard is shared with the broader organization and affords applicants an opportunity to assess their strengths and areas for improvement based on the benchmarks provided. Applicants can use the scorecard data to build internal business cases and to highlight recognition from the L&D field to the C-suite. Over time, the scorecard will serve as an annual report card. 4 For more information or to download the 2012 LearningElite application go here: CLOmedia.com/elite

5 CLO LearningElite Virtual Forum All LearningElite organizations are invited to present at the LearningElite Virtual Forum held on the Human Capital Media Convention Center virtual event platform. The LearningElite Forum is free of charge for the broader L&D function for those who elect to present LearningElite The primary finding from the 2011 LearningElite organizations is that investment is critical. Joop Hartog and Henriette Maassen van de Brink (2007) suggest that underinvestment in learning results from the fact that the value of specific investments in human capital is not verifiable or the return is not clearly communicated. Those that were selected as elite organizations made financial and strategic investments in the learning and development of their workforce. To stay ahead of the competition, elite organizations are making investments of various sizes and those that made investments greater than $500 per employee were not rated higher. Regardless of the size of investment, organizations are making significant accomplishments and demonstrating internal impact and enterprise-wide business performance results. Furthermore, elite organizations had a sound human capital strategy that was clearly linked to the corporate strategy. It was discovered that senior leadership drove the L&D agenda and helped identify the most critical capabilities necessary to remain competitive. The organizations that were selected for the 2011 LearningElite are diverse in geography, industry, type, size, revenue and investment in learning and development. The demographics of the 2011 LearningElite are illustrated in this section. The 2011 LearningElite are global organizations headquartered across the globe, including: Canada Channel Islands India Ireland United Kingdom United States The 2011 LearningElite represent a heterogeneous group of 25 industries: Banking Business services Computer hardware Computer services Computer software Detective and armored car services Education Electronics Energy and utilities Financial services Food Government Health care Hotels and motels Individual and family services Insurance Leisure Pharmaceutical manufacturing Pharmacy benefit management Physical fitness facilities Radio broadcasting stations Real estate agents and managers Retail Telecommunication services Transportation services 5 For more information or to download the 2012 LearningElite application go here: CLOmedia.com/elite

6 Chart 1 shows that 2011 LearningElite organizations are of various types and almost two-thirds of those that applied are publically traded companies; however, there is representation across the board. CHART 3: Organization Total Annual Revenue 35% 35% CHART 1: Entity Publicly traded company 60% 18% Non-publicly traded company 23% 12% Nonprofit (not including government) Government 9% 5% <$1B $1B-$10B $10B-$50B $50B+ Academia 2% Seventy percent of the organizations generated between $1 billion and $50 billion in annual revenue USD last fiscal year and 12 percent reported an annual revenue of more than $50 billion USD. CHART 4: Total L&D Budget CHART 2: Organization Size 0-10k 33% 33% 36% 10k-100k 37% 100k-200k 14% 12% 200k+ 16% <$10M $10M-$50M $50M-$100M >$100M As seen in Chart 2, 70 percent of the organizations are small to mid-size (up to 100,000 employees) and 30 percent are large (more than 100,000 employees. Thirty-one percent of the 2011 LearningElite organizations revealed that last fiscal year they had an L&D budget of more than $50 million USD. Only one-third of the organizations have less than a $10 million USD budget. 6 For more information or to download the 2012 LearningElite application go here: CLOmedia.com/elite

7 CHART 5: L&D as Percent of Total Budget CHART 7: L&D Spend Per Employee 32% 35% >$2,000 38% <$500 14% 24% $1,000-$2,000 $500-$1000 <1% 1%-2.5% 2.5%-5% >5% Fourteen percent of the 2011 LearningElite organizations reported that last fiscal year their L&D budget was greater than 5 percent of their annual operating budget. The majority (86 percent) stated that their L&D budget was up to 5 percent of their annual operating budget. Clearly, the 2011 LearningElite organizations make substantial investments in learning and development. CHART 6: L&D as Percent of Total Revenue 24% <0.1% 33% 0.1%-0.5% 0.5%-1% 24% >1% Learning and development investment represented more than 1 percent of total annual revenue for 24 percent of organizations, while it represented less than 0.1 percent of revenue for another 24 percent of organizations. In Chart 7, it is shown that 43 percent of the 2011 LearningElite organizations spent $1,000 USD or more per employee on learning and development last fiscal year, while 38 percent spent less than $500 USD. Overall, the 2011 LearningElite organizations are a disparate group of small to large organizations headquartered across the globe, representing all types of entities, from a range of industries, and with various levels of investment in learning and development. The diversity of this group indicates that exceptional learning and development can be achieved regardless of size, geography or level of investment in L&D LearningElite In the spirit of continuous improvement, there are some differences between the 2011 and 2012 LearningElite programs; however, both are based on the same fundamental model measuring five dimensions: learning strategy, leadership commitment, learning execution, learning impact (internal) and business performance results (external). In Part I Organizational Demographic Information, the 2012 application has more demographic items, specifically in learning outsourcing. The items in Part II LearningElite Dimensions have been streamlined and the measurement items have been consolidated based on applicant feedback and psychometric analyses of item functionality. Also, the word limit was removed. There is no word limit on any item in the 2012 application and only one file upload permitted on Part II LearningElite Components 7 For more information or to download the 2012 LearningElite application go here: CLOmedia.com/elite

8 The greatest enhancement to the 2012 LearningElite program is that those selected as the top five will be ranked based on both their application score and a capstone evaluation score. Based on the self-report application data, those selected as the top five LearningElite organizations will be required to participate in a capstone evaluation including a presentation to and executive interview with Chief Learning Officer magazine s HCM Advisory Group leaders and a magazine editor. The final top five rankings will be established after all capstone evaluations are complete. The LearningElite is a self-report organizational assessment with demonstrable requirements/collateral. Those who are selected as the LearningElite will exceed the pre-established cut-score in all five dimensions. Of those selected to the LearningElite, the five organizations with the highest application score are asked to participate in a capstone evaluation with Chief Learning Officer magazine s HCM Advisory Group leaders and magazine editors. The purpose of the capstone evaluation is for the top five organizations to demonstrate leadership commitment to L&D and to allow the judging team to examine issues that are essential components of scoring and role model determination. The capstone evaluation team will seek to gain a deeper understanding of the applicant s performance across the five dimensions measured. The capstone evaluation contains two components: 1. presentation to evaluation team and 2. C-suite interview. The program is as follows: Part 1: Two-hour presentation to evaluation team by applicant s most senior learning leader and others in L&D. a. A 50-minute Webex presentation by the applicant s team and CLO: They discuss all five dimensions of an employee s lifecycle (hire to retire) across these topics: i. On-boarding (i.e., strategy for on-boarding, how leadership is committed to on-boarding, how onboarding is executed, the impact of on-boarding and the business performance results of the on-boarding strategy). ii. Capability development and management. iii. Leadership development. b. A 50-minute Q&A session with the evaluation team to further clarify anything from the presentation or application. Part 2: C-suite 30-minute phone interview A phone interview with a C-suite leader to discuss how L&D contributes to business performance results and how L&D is a part of the strategy for solving business challenges. The capstone evaluation team will employ a standard scoring protocol across all five evaluations. The scoring protocol will be distributed to the top five LearningElite organizations upon notification. The capstone evaluation will be scheduled between March 5 and March 16, n References Blair, M. (2011) Burton-Jones, A., Spender, JC, Editors. The Oxford Handbook of Human Capital. Oxford University Press. Elkeles, Tamar and Phillips, Jack (2007). The Chief Learning Officer. Butterworth- Heinemann. Hartog, Joop and van den Brink, Henriette Maassen (2009) Human Capital Theory and Evidence. Cambridge University Press. Hay Group. (2011). Taking a New Direction: Three Leadership Strategies for a Rapidly Evolving Business Landscape. Porter, Michael. (1998). Competitive Advantage: Creating and Sustaining Superior Performance. Free Press. Schultz, T.W. (1961). Investment in Human Capital. American Economic Review, 51 (1): For more information or to download the 2012 LearningElite application go here: CLOmedia.com/elite

9 HCM Advisory Group is the research division of Chief Learning Officer magazine. Our mission is to focus on human capital issues that are relevant and important to senior leaders. Our research is designed and delivered to allow the consumer to demonstrate thought leadership by accessing real-time, high-level findings. Tweetable data points are provided and facts/charts can be used to build business cases and presentation. Contact us at HCM Advisory Group Leaders: Stacey L.T. Boyle Vice President of HCM Advisory Group Boyle has extensive experience in strategic consulting, program/product evaluation, assessment, measurement, and product development. Prior to joining MediaTec, she was vice president, client services at Element K, and senior director of blended learning services with SkillSoft. Additionally, she served as a practice director of Thomson NETg s evaluation services. Throughout her career, Boyle has served as a program evaluator for NASA; a training evaluator for Andersen Consulting (Accenture); and a director of training for Platinum Technology (Computer Associates). Boyle holds a B.A. in psychology, an M.S. in psychometry, and a Ph.D. in educational research and evaluation from Oklahoma State University. Jerry Prochazka Director of HCM Advisory Group Prochazka has nine years experience as a business research consultant on human capital projects with Accenture, specifically in training, learning, performance, leadership development and knowledge management. He has special expertise in the design, implementation and analysis of training and learning research, particularly in the analysis of quantitative data (including Rasch model), as well as qualitative data analysis. He also has superior ability in survey design and implementation. Prochazka received a BS with distinction from Old Dominion University and attended graduate school in the master of the arts program for social science at the University of Chicago. About Chief Learning Officer Magazine Chief Learning Officer is the foremost resource in the rapidly growing industry of workforce learning and development. The flagship magazine and related network of publications, electronic media and international events have made Chief Learning Officer the pre-eminent source of thought leadership for senior-level executives. The magazine provides them with constant access to reliable, relevant information, as well as forums for connecting with other global learning leaders. 9 For more information or to download the 2012 LearningElite application go here: CLOmedia.com/elite