L&D 2.0 : From Cost Centres to Value Creators

Contrary to the numerous headings of articles appended with numerals, this article is not about the implementation of digital technologies within the context of training and development. It is about how the subject of learning and development must be viewed through a wider lens that will be capable of contributing to more effective organisations.

“American companies spend enormous amounts of money on employee training and education but are not getting a good return on their investment.”

“Why Leadership Training Fails—and What to Do About It”, HBR, October 2016

The objective of employee training and education programmes are generally twofold.

1.     To support the aspirations of personal growth - where people are eager to acquire knowledge and skills that will help them advance in their careers.

2.     To make leaders and organisations more effective - which according to the HBR article is the primary reason senior executives invest in management training.

While outcomes of the first objective are encouraging, outcomes of the second have not quite been up to the mark. The HBR article puts forth two reasons on why this is so.

1.     There is this tendency to design training programmes with the view that the organisation is an aggregation of individuals. In reality, organisations are systems of interacting elements where processes, policies, practices and leadership styles come together to drive organizational behaviour and performance. In short, most training programmes are designed to improve the skill of the individual with the hope that it will eventually lead to better organisational performance. 

2.     HR professionals find it difficult or near impossible to confront senior leaders with the fact that failure to execute on strategy, change organizational behaviour or improve organisational performance is rooted not in the individual employee’s deficiencies but rather in the policies and practices created by top management. Thus, it is much easier to point to employees’ competencies as the problem and to personal development as the clear solution. 

In putting forth a new capability development strategy, the authors of the HBR article recommend that organisations answer the following key questions, first at the top level and then in each major business unit

1. Is the leadership team aligned around a clear, inspiring strategy and set of values?
2. Has unvarnished employee feedback been collected about barriers to effectiveness and performance—including senior managers’ own behaviour?
3. Has the practices, organisation, management and performance systems been redesigned to sustain behaviour, post-training?
4. Will each business unit’s leadership and culture provide fertile ground for the change to take shape?

When one analyses the arduous task of ticking all the boxes to the questions above, it becomes evident that the task may be beyond the scope of the traditional L&D role working within the boundaries of a fixed annual training budget. It does take a lot of experience and grit to tackle the many hurdles prevalent across most organisations before one can improve organisational performance and enhance business results.

HR professionals must relook at the concept of learning and development through a much wider lens and support the aspirations of senior executives to deliver a good return of investment in training and development. For starters, CHROs must evaluate whether “Leadership & Talent Development Programmes” that are being rolled out within their respective organisations satisfy the conditions above. The journey of transitioning from being a mere cost centre to being a value creator must begin now for the L&D role to remain relevant.

Sekar Shanmugam is the MD of  ProfitAbility in SE Asia. ProfitAbility based near Oxford in the UK designs and delivers fully blended and customised business simulation programmes to some of the world’s leading organisations. We believe that the biggest block to success is your people not being clear on how their actions impact your business outcomes.