Business Planning and Governance for Corporate Training

Business Planning and Governance for Corporate Training Josh Bersin Principal Analyst May 2008 This report has been excerpted from The High-Impact Learning Organization: WhatWorks in the Management, Governance and Operations of Modern Corporate Training. BERSIN & ASSOCIATES INDUSTRY STUDY v.1.0

Business Planning and Governance for Corporate Training 2 TABLE OF CONTENTS Business Planning and Governance 3 The Business Plan for Learning 3 What Is a Business Plan for Learning? 4 Building Business Unit-Level Learning Plans 5 Developing the Enterprise Plan 7 Governance: Communicating, Monitoring and Adjusting Your Operations 9 Training Operations 10 Communities of Practice 10 Learning Council 10 Strategic Steering Committee or Board of Directors 11 How to Manage Steering Committees 12 How Often Do Committees Meet? 12 What Is the Impact of Steering Committees? 14 Tying It All Together: The Integrated Planning and Governance Process 15 Appendix I: Table of Figures 17 About Us 18 About This Research 18

Business Planning and Governance for Corporate Training 3 Business Planning and Governance 1 The word governance has become a buzz word in corporate training. Our research shows that the essential issue in governance is making sure that all programs, investments and systems are continuously aligned with the business s top priorities. This means that the entire L&D function must have a set of regular processes to communicate plans, gain feedback and make ongoing adjustments. Our research clearly shows that governance is directly connected to the business plan for learning. High-impact learning organizations have a detailed, annual plan and their governance process is built around this planning process. 2 The Business Plan for Learning The first and most pivotal piece of this process is the development of a business plan. Many learning organizations do not understand how to build such a plan. In fact, we found that only 39 percent of organizations have a written business plan for learning and only 64 percent of the high-impact learning organizations have such a plan. 3 If we look at the impact of such a plan, the results are high. Organizations with a written business plan are: Eighteen percent more effective at partnering with lines of business; Sixteen percent more effective at aligning learning with the business goals; 1 This research report has been excerpted from The High-Impact Learning Organization: WhatWorks in the Management, Governance and Operations of Modern Corporate Training, Bersin & Associates / Josh Bersin, May 2008. Available to research members at www.bersin.com/library or for purchase at www.bersin.com/highimpact. 2 For more information, Corporate Learning: Building a Business Plan, Bersin & Associates / Josh Bersin, August 21, 2007. Available to research members at www.bersin.com/library. 3 For more information, High-Impact Learning Measurement: Best Practices, Models, and Business-Driven Solutions for the Measurement and Evaluation of Corporate Training, Bersin & Associates / Josh Bersin, November 2006. Available to research members at www.bersin.com/library or for purchase at www.bersin.com/measurement.

Business Planning and Governance for Corporate Training 4 Figure 1: Business Plan Is Related to Senior Leadership Senior Leadership Have a CLO in Place Do Not Have a CLO in Place Have a Business Plan for Learning 55% (yes) 24% (yes) Source: Bersin & Associates, 2008. Fourteen percent more able to plan and meet schedules for learning activities and programs; and; Twelve percent more able to efficiently use resources and funding. Interestingly, there is also a strong relationship between business planning and having a CLO organizations with senior L&D leaders are more than twice as likely to have such a written plan (see Figure 1). The reason for this is simple good business leaders will force the organization to build such a plan, and the planning process itself will generate tremendous improvements in business alignment and governance. What Is a Business Plan for Learning? The learning business plan is a written document which summarizes the annual or multiyear strategy and operational plans for the learning organization. 4 This business plan typically incorporates the following 12 elements: 1. The enterprise learning strategy (stated in business terms); 2. The organizational budget, and resource allocation (staffing) and organization; 3. The program plan (current and planned learning programs); 4. The organizational model (how the plan is developed and how L&D works with the rest of the organization); 4 For more information, Corporate Learning: Building a Business Plan, Bersin & Associates / Josh Bersin, August 21, 2007.

Business Planning and Governance for Corporate Training 5 5. Alignment with known business initiatives (how L&D is specifically supporting key business initiatives today, such as major product rollouts, restructuring and so on); 6. Alignment with HR and talent management (how L&D is specifically supporting enterprise talent management initiatives, such as career development programs, performance management programs or leadership development programs); 7. Operational measures (such as the number of hours, classes, seats or other measures to be tracked and targets for each, with a specific focus on efficiencies and how L&D is driving more learning at lower costs each year); 8. Governance process (how the L&D team works with others, such as the steering committees, which is discussed later in this report); 9. Year-to-year comparisons (how the metrics and goals this year compare with the previous year); 10. Major capital investments (major new systems, software or infrastructure that the organization is implementing or purchasing); 11. Major commitments by quarter (a quarterly dashboard of major programs and initiatives that L&D is committing to the organization); and, 12. Signoff by all major business units (a signed form that the plan is agreed to by each major business-unit owner). As this list shows, such a plan is not easy to build. In fact, the process of building the plan should involve the collection of individual learning or talent plans from each of the individual business units. Building Business Unit-Level Learning Plans Many organizations build business unit-level learning plans on an annual basis. Some organizations (like Caterpillar, CocaCola, GE, McDonald s and others) have an annual operations planning process that forces all managers to evaluate the state of their talent in the fall of each year. These plans result in some form of organizational talent plans that roll up to an overall talent plan for the organization. In most companies, this information is owned by HR. The L&D team must become a part of this process, so that these talent plans go beyond simple lists of headcount and also include strategic talent gaps.

Business Planning and Governance for Corporate Training 6 An easy way to implement this is discussed in the Caterpillar case study 5 in which the company asks each business and geographic unit to develop a business-unit learning plan on its own. This plan forces the business unit to identify its own perceived skills and development gaps among its workforce. This process forces each business unit to think about talent in terms of skills, not just headcount. This process, however scientific or unscientific it is, enables the L&D team to now work closely with the business unit to build a supporting plan to meet those needs. The process of identifying skills gaps is not easy. In fact, in our High- Impact Talent Management research 6, we found that only seven percent of all HR organizations feel they have an enterprisewide view of the critical skills gaps in their organizations. This information exists but it is usually locked in the heads of individual line managers. A critical and very valuable project that addresses this problem is an enterprisewide or departmentwide skills gap assessment. (We have worked with several organizations to accomplish this.) To do this, the organization must first establish a basic set of competencies (often these are somewhat generic), and then a simple set of self-assessment questions to enable employees to assess their strengths and weaknesses based on these competencies. The organization then rolls out this survey to both employees and managers (the LMS is a perfect platform for this work), and the resulting information will give the L&D organization tremendous insights into skills gaps at various levels. Of course the most difficult part of this process is identifying the competencies to assess but these can often be developed by using your existing leadership competency model or in conjunction with the business units themselves. 7 Figure 2 is an example of such an assessment that is used by the U.S. Department of Energy. 5 For more information, Organizational Management Excellence: Caterpillar Builds Best Practices into Governance of Learning and Development, Bersin & Associates / Chris Howard, December 2007. Available to research members at www.bersin.com/library. 6 For more information, High-Impact Talent Management: Trends, Best Practices and Industry Solutions, Bersin & Associates / Josh Bersin, May 2007. Available to research members at www.bersin.com/library or for purchase at www.bersin.com/hitm. 7 Another common way to understand the organization s learning plan is by aggregating the organization s individual development plans (IDPs) from the performance management process.

Business Planning and Governance for Corporate Training 7 Figure 2: Typical Talent Gap Assessment Job Family N Communication Cont to Mission Customer Service Project Management Teamwork Technical Competence 1 Accounting and Auditing 54 2 Clerical and Office Services 487 3 Contracting 739 4 Distribution Facilities and Storage Management 78 5 EEO 10 6 Environmental Protection Specialist 149 7 Financial Management and Budget 197 8 Fire Protection and Prevention 59 9 Fixed Equipment Mechanic 14 10 General Business and Industry 148 11 General Supply 437 12 HR Assistant 19 Source: Bersin & Associates, 2008. Developing the Enterprise Plan Whatever process you use (whether it is detailed and scientific, or done by business-unit leaders themselves), these business unit-level competency needs are then used to build the enterprise learning plan. Of course no corporate training group can implement every solution to every learning challenge. As the Caterpillar model shows (see Figure 3), the actual plan will include discussions about who does what and often

Business Planning and Governance for Corporate Training 8 delegates many learning solutions to the business units themselves (with help from your organization in some way). If you are new to this process, it is important to start small and grow over time. The plan should be realistic, easy to understand and written in a way that any business leader can immediately tell how he / she can work with you. In fact, the planning process itself is a governance process because you should get approval and signoff on your budget, program plan and quarterly deliverables from the business leaders. Bersin & Associates research members have access to several in-depth learning plans as examples. We urge you to spend time each year on this process it may be one of the most valuable planning exercises you do each year. Figure Figure 3: 3: Caterpillar s Caterpillar s Continual Continual Learning Learning Organization Organization 8 Source: Caterpillar, 2002. 8 For more information, Organizational Management Excellence: Caterpillar Builds Best Practices into Governance of Learning and Development, Bersin & Associates / Chris Howard, December 2007.

Business Planning and Governance for Corporate Training 9 Governance: Communicating, Monitoring and Adjusting Your Operations Once you have some type of plan (and even if you do not), highimpact learning organizations then embark on a three-tier process for governance. The whole purpose of governance is to do two things: First, make sure that your plans and programs are well-aligned with needs; and, Second, communicate your programs clearly and vigorously throughout the organization, so you have widespread adoption and usage. Our research has shown that there are clearly three tiers of best-practice governance, as illustrated in Figure 4. Starting from the bottom, they work as described in the following sections. Figure Figure 4: 4: Bersin Bersin & Associates Associates High-Impact High-Impact Learning Learning Organization Organization Governance Governance Model Model Programmatic Strategic Steering Committee Learning Council Executive alignment Funding approval Progress reporting Includes VP of HR and other business executives Strategy development Budget development and monitoring Program prioritization and allocation Operational and business impact measurement Includes business representation Could involve communities of practice Operational CoP CoP CoP Training Operations Decisions on learning infrastructure and on ongoing management of programs Standards and quality control Identification and selection of preferred vendors Communities of practice / best-practice forums Internal to learning function(s) * CoP - Community of Practice (e.g., instructional design committee, learning measurement committee) Source: Bersin & Associates, 2008.

Business Planning and Governance for Corporate Training 10 Training Operations The training operations staff is responsible for planning, building, measuring and managing training programs. This is the job of the director of training or director of L&D. Typically, this group meets weekly, and uses all the tools (as discussed in our industry study, High-Impact Learning Organizations 9 ) to manage the development and delivery of training programs. These types of meetings probably take place today within the context of your training team which focuses on activities, deliverables and internal operations. Communities of Practice 10 As we all know well, there are many arcane and technical details to the development and delivery of enterprise learning. Communities of practice enable professionals in a similar discipline to get together and share ideas and develop common systems and processes. Many organizations have CoPs that focus on instructional design, e-learning development and, perhaps, performance consulting or coaching. These groups should be chartered to meet regularly and when strategic decisions must be made (e.g., standardizing on a tool or process), they can be tasked with making these decisions. High-impact CoPs engage professionals from throughout the organization (not just within L&D), and are chartered with a leader who creates the agenda, and makes sure that meetings are documented and focused on development, sharing of best practices and decisionmaking on standards. The central L&D organization should play an important role in making sure these meetings take place. Learning Council The next level up is a learning council a group that meets periodically with two major goals: 9 For more information, The High-Impact Learning Organization: WhatWorks in the Management, Governance and Operations of Modern Corporate Training, Bersin & Associates / Josh Bersin, May 2008. 10 For more information, Developing Communities of Practice: Best Practices and Lessons Learned from the Defense Acquisition University, Bersin & Associates / Chris Howard, May 2007. Available to research members at www.bersin.com/library.

Business Planning and Governance for Corporate Training 11 First, communicating the current build plan of the training that is in place; and, Second, gaining line-of-business feedback on current, new or changing priorities. This council may meet once per year, once per quarter or more often, depending on how the organization is set up. Its primary goal is to make sure that there is strong operational alignment between the training being built and delivered, and the business priorities. The key members of this group are the director(s) of training, line executives and managers, and key members of the training development and delivery teams. It is important that business-unit managers attend these meetings. In many organizations, it is also important for IT to be involved because next-generation learning solutions often involve new applications for the LMS, integration with talent management, content management solutions or new social-networking solutions. Strategic Steering Committee or Board of Directors The final, uppermost governance structure (that is missing in many companies) is an executive-level steering committee (or board). This group (often chaired by the executive vice president of HR or CLO) addresses corporatewide issues that are bigger than individual programs. Typical issues addressed by this group include: Annual budget for training and allocation of expenses; Buyoff on major new capital projects (e.g., LMS); Major initiatives that integrate training with HR (such as new performance management systems and processes, leadership programs, and strategic skills gaps); The question of how to deal with acquisitions, ERP rollouts and other major enterprisewide change programs; The current, overall organization, and how it may need to change to deal with new business issues; and, The engagement and support of top executives for critical L&D and talent-driven learning programs.

Business Planning and Governance for Corporate Training 12 In most companies, this group meets quarterly and may include the COO. At Textron, for example, the chief of operations is on the board of Textron s Corporate University. The job of the CLO or director of training is to make sure he / she is prepared for these meetings with budgets, aligned programs, measurements, and an overall learning strategy that fits into both business and HR strategies. How to Manage Steering Committees Interestingly, our research shows that 59 percent of organizations in this research (up from 35 percent in 2003) have some type of steering committee to help govern their L&D organizations. We believe one of the reasons for this increase is the massive investment in technology the L&D group now controls a major enterprise system and millions of dollars of ongoing investments in programs. Within those organizations with steering committees: Eighty-two percent have some representation from IT (clearly important for any type of learning technology or LMS strategy); Sixty-seven percent have representation from line-of-business managers; and, Sixty-six percent have some representation from HR. (Those steering committees that do not include these outside parties are probably not really doing much steering. ) Some of the names for the steering committee include: Learning governance committee; Learning board of directors; and, Learning council. When we asked who is included in these steering committees, the list of responses was interesting (see Figure 5). How Often Do Committees Meet? These steering committees meet frequently, with most organizations meeting quarterly and nearly one-third meeting monthly. The monthly

Business Planning and Governance for Corporate Training 13 Figure 5: Job Titles Included in Steering Committees All major components of the agency Audit Business-unit learning leaders Business analyst Business development Call center director Centers for personal finance & professional development CEO CFO COO Client services Committee of association members Communications Corporate training council Country manager Department manager Development Director of finance Director of operations Directors Education managers & directors Engineering Executive committee Executive vice president sales Executives Finance Franchisees General managers Governance HR HR managers Learning & development managers Learning board of directors Legal Library manager Logistics Manager of operations Managers Managers (cross-function) Managers of learning services Managers, executives Manufacturing managers Marketing Organizational vice presidents Operations Operations managers Presidents of not-for-profit agencies Public services Quality Quality Assurance Research & Development Retail & product lines Sales Sales managers Select advisors Senior HR executives Service & instruction Senior executives (who set strategy) Senior vice president operations Senior vice presidents Strategic Planners Supervisors Trainers Training directors Training managers Unit directors Upper remote management Vice presidents Vice presidents and above Vice presidents of businesses Vice president HR, business-unit heads Vice president sales Vice presidents & group managers Vice presidents implementation Vice president operations Vice presidents professional services VP Sales, VP HR, VP Sales Trg, COO, CFO VP Training & Development VPs and Directors VPs from all departments Source: Bersin & Associates, 2008.

Business Planning and Governance for Corporate Training 14 Figure Figure 6: 6: How How Frequently Steering Committees Committees Meet Meet Monthly 36% 54% Quarterly 10% Annually Source: Bersin & Associates, 2008. meetings are most likely internally focused, indicative of the dynamic and constantly changing nature of training needs for those organizations. (See Figure 6.) What Is the Impact of Steering Committees? Our research found that the existence of steering committees is clearly a high-impact best practice. While there is not a big difference in the prevalence of steering committees among high-impact and other organizations, the correlation with our high-impact measures is very high. In other words, there is a very strong relationship between having committee structures in place and the 18 high-impact measures. 11 Steering committees provide many benefits increased visibility, communications for major programs, more effective alignment and more rapid funding of critical needs. There is also a strong correlation between the use of a steering committee and the likelihood an organization has an established measurement program. (The steering committee often mandates this.) As a final point, the steering committee must meet regularly to ensure it is providing value through continuous alignment. Just the process of 11 For more information, The High-Impact Learning Organization: WhatWorks in the Management, Governance and Operations of Modern Corporate Training, Bersin & Associates / Josh Bersin, May 2008.

Business Planning and Governance for Corporate Training 15 inviting and soliciting business leaders to join the steering committee is a very positive step toward building a high-impact learning organization. Tying It All Together: The Integrated Planning and Governance Process Ultimately, as this report discusses, high-impact learning organizations must tie the planning, governance and steering committee elements together into an integrated process. These are not standalone activities. As Figure 7 shows, the planning process and business plan form the basis and underpinnings of governance. We have laid the triangle governance chart (see Figure 4) on its side to show you how the governance and planning processes work together. The strategic parts of the plan are reviewed by the board or steering committee. The quarterly and program plan elements are reviewed and discussed by the learning council. The ongoing operations and training activities are discussed at the operations meetings and through the communities of practice. Each of these groups should contribute to the Figure Figure 7: 7: Integrated Planning and and Governance Governance Process Process Strategic Plan Operational Plan Learning Operations Performance Consulting Vision, Mission Budget / Headcount Target Delivery Volumes Strategic Initiatives Program Build Plan Scheduled Events Technology Plan Staffing Model Measurements Learning Shared Services Delivery and Support Measurement and Reporting Quarterly Annual or Semi-Annually COP Steering Committee Learning Council COP Training Operations COP Source: Bersin & Associates, 2008.

Business Planning and Governance for Corporate Training 16 ongoing development, monitoring, adjustment and communication of the enterprise learning plan. Can you implement this all at once? Absolutely not. The development of these processes will take several years. But, if you start now, you can find yourself with a very similar process much faster than you may have imagined. 12 12 For more information, Four Stages to Building a High-Impact Learning Organization, Bersin & Associates / Josh Bersin, May 2008. Available to research members at www.bersin.com/library.

Business Planning and Governance for Corporate Training 17 Appendix I: Table of Figures Figure 1: Business Plan Is Related to Senior Leadership 4 Figure 2: Typical Talent Gap Assessment 7 Figure 3: Caterpillar s Continual Learning Organization 8 Figure 4: Bersin & Associates High-Impact Learning Organization Governance Model 9 Figure 5: Job Titles Included in Steering Committees 13 Figure 6: How Frequently Steering Committees Meet 14 Figure 7: Integrated Planning and Governance Process 15

Business Planning and Governance for Corporate Training 18 About Us Bersin & Associates is the only research and advisory consulting firm focused solely on WhatWorks research in enterprise learning and talent management. With more than 25 years of experience in enterprise learning, technology and HR business processes, Bersin & Associates provides actionable, research-based services to help learning and HR managers and executives improve operational effectiveness and business impact. Bersin & Associates research members gain access to a comprehensive library of best practices, case studies, benchmarks and in-depth market analyses designed to help executives and practitioners make fast, effective decisions. Member benefits include: in-depth advisory services, access to proprietary webcasts and industry user groups, strategic workshops, and strategic consulting to improve operational effectiveness and business alignment. More than 3,500 organizations in a wide range of industries benefit from Bersin & Associates research and services. Bersin & Associates can be reached at http://www.bersin.com or at (510) 654-8500. About This Research Copyright 2008 Bersin & Associates. All rights reserved. WhatWorks and related names such as Rapid e-learning: WhatWorks and The High-Impact Learning Organization are registered trademarks of Bersin & Associates. No materials from this study can be duplicated, copied, republished, or re-used without written permission from Bersin & Associates. The information and forecasts contained in this report reflect the research and studied opinions of Bersin & Associates analysts.

Business Planning and Governance for Corporate Training 19 About ecornell ecornell, a subsidiary of Cornell University, provides many of the world s leading organizations with online professional and executive development in the areas of leadership and management development, human resources, financial management and hospitality management. ecornell s proven course development model and asynchronous instructor-led course delivery provide for engaging, rigorous and interactive learning. The company has delivered over 120,000 courses to more than 35,000 students in almost 200 countries. For more information, please visit www.ecornell.com or email ecornell@ecornell.com.