Shifting L&D from cost center drag to revenue generating department

Published: 15th October 2017

L&D professionals have to ensure that their corporate colleagues are presented with data and facts that demonstrate the wider value of this department.

Operating as a learning organisation is now widely acknowledged as one of the best ways of developing and maintaining business success. L&D needs to demonstrate its bottom-line value to meet the challenge of those who question its worth, in order to move from bottom of the league “nice to have” to first-place “need to have” Our curated insights this month focus on how to connect workplace learning and development with measurable business results. There may possibly be a bleak future for L&D teams if they don’t come up with the evidence very soon, but there are signs that, with the right approach, L&D can prove its worth.

The successes and failures of L&D teams need to be seen and measured in terms of their impact on business results and the demands of their stakeholders, not on what participants think of their delivery.

Learning metrics must be replaced by aligning with business goals and demonstrating how L&D contributes to their achievement.  What CEOs and stake-holders value and demand must become the targets on which L&D teams focus. Stakeholders and corporate executives expect to have a clear line of sight between investment in L&D and business results.  What counts now is not whether the skills and knowledge of employees are improved, but demonstrating that such improvements drive up performance and help the business develop.

The Al Batha Group has recently acknowledged that becoming a learning organisation with the support of the European School of Management and Technology (ESMT) had not only enabled it to maintain its corporate values (important though that is for all businesses); but also ‘…to pursue our strategy for growth’.  The L&D program provided by ESMT, emphasizes contribution to competitive and corporate strategy.  Much of the success of the program was driven by the intense analysis carried out by ESMT pre-delivery. It provided them with a clear understanding and insight into how best to support Al Batha’s strategy of continuing growth.  It demonstrates clearly how business-success focused L&D is the way to go.

How can L&D build on the example of success show here by ESMT in one of the Middle East’s most successful and diverse organizations?  Harvard Business School’s July 2016 report ‘The State of Leadership Development’  also focuses on the need for L&D programs to align with the business and, as they emphasize “…demonstrate material contributions to business results.”   So how is this to be achieved? Best in Class L&D programs demonstrate significant impact on

  • Financial Success
  • Competitive Performance
  • Leadership Development

So, how far has L&D come in developing itself

Moving away from its traditional focus of providing engaging delivery to meeting 21st century demand to impact the bottom line? This Forbes article shows the journey travelled and it may surprise you!

The article relates the story of the L&D community’s journey from classroom-based courses to e-learning management systems. Sure, it can be read as the success story of moving from static, time-consuming, classroom training to delivering successful, agile programs demanding less time away from the job. It shows a certain level of adaptation, which in its turn led to regard from consumers demanding flexible learning delivery. But – not a word in the article about how e-learning is assessed for impact on business growth; or how it can be harnessed in the service of continuous business success. To demonstrate real added-value the L&D community now needs to demonstrate to its stakeholders not how engaging, developmental or tech-based its delivery is, but how it impacts on the bottom line.

In a fast-moving business world what is needed is L&D which is agile, tech-savvy, business embedded and focuses on core skills, as the model developed by Donald Taylor of the Learning and Reform Institute demonstrates:

The contribution that truly innovative L&D can make to growing business success in the middle east characterized by the appointment in October 2016 of Dr. Kholode Al-Obaidli as Chief Learning Officer to the Sidra Medical and Research Center.  She moved to Sidra from another extremely successful business, where her talent management programs were credited with creating competitive advantage for the group, because of their strong links to corporate strategy.    If only 8% of CEOs can see the links between what’s delivered by L&D and any business impact 2017 Workplace Learning Report from LinkedIn then L&D professionals are in big trouble.  Dr Al-Obaidli’s appointment to Sidra following her success in developing a learning organization at a note able Middle Eastern airline demonstrates that, where L&D is valued as a recognised contributor to the business, then the L&D/business disconnect problem evaporates. L&D becomes valued in its own right – as Dr Al-Obaidli’s new role demonstrates.

So, there are strategies, models and real-world examples out there that can help the L&D professional sync with and support corporate goals.  It’s as much about understanding and responding to the business environment that L&D exists within, as it is about moving away from learning metrics to “…demonstrate material contributions to business results.”

Axonify is one such a platform that equips L&D departments with the tools they need to prove the value they bring to the business. If you are interested in having a chat to learn more about Axonify drop us a message here and we’ll catch up with you soon.

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