A recent report written by Towards Maturity has identified 7 habits of highly aligned learning and development functions that can help to add bottom line business value. The report was conducted with over 300 companies from the private, public and not for profit sectors.
Examples of bottom line business value found from the report were:
- the ability to implement new processes or products faster
- increased productivity
- improved customer satisfaction
- better compliance with new regulations and legal requirements
- improved performance management
Although this report is based on research from companies with a specific L&D function, I believe these findings can be applied to SME’s, especially those who have the right mentoring support or networks in place. The reason being is that from my experience of providing SMEs with HR mentoring support, there is real scope to help business owners understand how investment in learning and development can help to add value.
The Magnificent 7
So from the report, what are the seven habits identified and how can they work for SMEs?
- Use strategic business objectives to determine learning priorities. Every small business must have specific needs or objectives they want to achieve; however, the day-to-day operations may stop leaders remembering this. When working with SMEs, I always spent time talking to them about what they wanted to achieve over the next 12 months, so we could then build HR action plans around this that would include learning and development priorities.
- Decide what learning interventions to use. Learning interventions could take the form of training, coaching, e-learning, distance learning or social learning. For SMEs, learning and development interventions should be regarded as an investment rather than a cost but, unfortunately, this generally is not the case. In order for this habit to work, there should be a clear return on investment expectation set at the start, so that leaders know the benefit of the return outweighs the initial investment of money or time away from work.
- Focus on the end results. You now know what your priorities are and the learning interventions to use, what targets do you want to set to measure against? You could have specific metrics you want in place to measure against, to ensure that the learning transfers back to the workplace. Or, you may set a minimum standard of qualification / certification that needs to be attained by certain staff within a time period.
- Integrate learning with performance management. To ensure that any learning isn’t lost, there should always be a follow-up through performance reviews and planning. This ensures that learning is taken seriously and reviewed with employees. Business owners should take time on a regular basis to have these discussions with their staff.
- Demonstrate business value. Once you have your metrics in place, you can then begin to evaluate the ROI. It may be that you can show an increase in sales performance, customer satisfaction or productivity. Or it may be you show a decrease in staff turnover, customer complaints or sick days. Either way, these are metrics that any business could begin to use with ease.
- Ensure staff understand their contribution. By utilising performance management techniques, you can be sure that staff are clear about how any learning they are involved in supports wider business objectives and success. This in turn can help improve employee engagement.
- Commit to learning and development interventions. Without any commitment from those leading SMEs, there will be very little commitment from staff to take learning and development seriously. If this happens, then any time and money invested into learning and development will be wasted.
Kick-start the habits
In increasingly competitive markets, SMEs need to get ahead of the field and the findings highlighted in the Towards Maturity report provide a framework for achieving this, so business owners really need to think about how they can put together a framework for following this.