A few weeks ago I participated in a panel discussion arranged by the network Swedish Learning Association. The subject for the discussion was Competence Development and we who was in the panel came from two furniture dealer companies from Sweden, IKEA and Kinnarps. It was really interesting to learn from another company working in the same field.
But what really caught my interest was a discussion that started way too close to the end of the gathering. One participant started asking us questions about how we proved that our competence development initiatives were successful. Did we prove it with showing the ROI? My response was that I have never calculated ROI in my life. But the participant wasn't happy with that answer, because how can I prove the right for an L&D department, if I don't show the management that they get something for the money they invest.
On the way home I reflected on my views on ROI and came to some conclusions. So here they are:
1. I hate economics. Every time people start talking about investments, ROI, budgets etc. I start to sweat. I don't know why, but that's how it is. So is this making me deny ROI simply because I have a fear of these kinds of things? No I don't think so. Because I also realised this:
2. I have actually never been asked to prove mine or the L&D departments right to exist in any company I have worked for. Why is that? Is it that the I am possessing some cool stealth equipment and simply managed to keep myself below the company radar? No I honestly don't think so. I think the companies I have worked for has seen the need for learning and development within their company. I mean, any profit driven company will close down departments that they don't see the need for. Now I think I am on to something:
3. In my profession, working with learning and competence development one thing is crucial as I see it. Working as close as possible to the business, preferably as an equal partner. By that I mean that I don't come up with suggestions for learning initiatives on my own. I do it together with the business. Together we start with identifying the needs the business has and if the need can be fixed with the help of learning I find the best solution to their problem. This means that I suggest a solution to a problem the business themselves have identified. By doing this there is no need to prove ROI. It's enough to show that what we wanted to change has been changed. If I would be asked for ROI on my job I would consider it a failure for me, since to me that shows that I have come up with a solution to a problem the business don't see as partculary important. Think of it like this: if a car sales man knocked on your door and suggested that you should buy a new car from him. Wouldn't you start to question this? Wouldn't you ask why he suggested this? And wouldn't you ask for some ROI? But what if you turned to a car dealer and together with the sales man started to discuss your needs and desires for a new car. After long discussions he suggests a car that fulfills your needs. Would you then start to question him? Would you ask for prove of ROI? Probably not, because you have a problem that he can fix for you and that is enough proof.
4. To prove ROI is a complex task that takes a lot of time and require both manpower and money to be successful. So as I stated in the title: what's the ROI of ROI? Is it really worth spending all that time and resources? Wouldn't it be better to focus on fixing a critical business problem?
Maybe I am naive, but I just can't understand the thing with ROI. And to be honest I still haven't met anyone who has been able to prove me wrong or even show me how they have calculated the ROI on a learning investment. And maybe more important, what they have gained from doing so.
So is anyone out there ready to prove me wrong? I am really, honestly looking forward to it, because I don't mind being proved wrong and I love to learn new things.
Thanks for taking the time,