The ROI of learning

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Welcome + Introduction
April 22, 2015


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Brian Smith
Director of Enterprise
Marketing
Demonstrating the ROI of Learning


A Robust Online Training Library
Content in Business
Leadership, Management, Productivity, Software, Communication, Career
Development, and more.

3,400+ courses
Avg. 20 courses released per week

10,000+ hours of learning
Avg. 5 hours released per day

138,000+ videos
Avg. 750 released per week

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Demonstrating the ROI of Learning


Britt Andreatta
Leadership consultant since 1989
PhD in Education, Leadership + Organizations
Professor and Dean at UC Santa Barbara
and Antioch University, teaching leadership
and success skills
lynda.com Member > Author > Director of Learning + Development
Please view my seven courses on lynda.com

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Demonstrating the ROI of Learning


Agenda
Return on Investment (ROI)
Your Context
Results That Matter
The Amazing Value of Learning
The ROI Method and Process

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Demonstrating the ROI of Learning


Sources

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Demonstrating the ROI of Learning


Agenda
Return on Investment (ROI)
Your Context
Results That Matter
The Amazing Value of Learning
The ROI Method and Process

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Demonstrating the ROI of Learning


History
Peter Drucker
“If you can’t measure it,
you can’t manage it.”

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Demonstrating the ROI of Learning


Donald Kirkpatrick
Four levels of

evaluation

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Demonstrating the ROI of Learning


Donald Kirkpatrick

Results
Behavior
Transfer
Reaction
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Demonstrating the ROI of Learning


Jack Phillips
The Father of ROI

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Demonstrating the ROI of Learning


Jack Phillips
ROI

R

OI
Impact

Implementation
Learning
Reaction/Satisfaction
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Did the learning
investment payoff?
Did the learning impact
business results?
Did the learners deploy
the learning on the job?
Did the learners
learn the content?
Did the learners
like the program?

Demonstrating the ROI of Learning


The Math
Benefit-cost Ratio (BCR)
Return on Investment (ROI)
Time to payback
Works with any currency
$ ¥ ₹ €, etc.

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Demonstrating the ROI of Learning


Benefit-cost Ratio (BCR)
Economic indicator of accountability for results.
The benefit (return) of an investment is compared to the
cost; expressed as a ratio.

BCR =
(x:y)
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Program Benefits
Program Costs
Demonstrating the ROI of Learning


BCR Example
It cost $20,000 to implement new learning program.
The learning resulted in $35,000 savings.
For every $1 spent, you received $1.75 in total benefit.

BCR =
1.75:1
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$35,000
$20,000

= 1.75
Demonstrating the ROI of Learning


Return on Investment (ROI)
Economic indicator of accountability for results.
The benefit (return) of an investment is divided by the cost;
expressed as percentage.

ROI =
%
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(Program Benefit
Minus Program Costs)
Program Costs

X 100
Demonstrating the ROI of Learning


ROI Example
It cost ¥20,000 to implement new learning program.
The learning resulted in ¥35,000 savings.
For every ¥1 spent, you received ¥.75 in net benefit.

ROI =
75%
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¥35,000-¥20,000
¥20,000

X 100

= .75

Demonstrating the ROI of Learning


Time to Payoff
Economic indicator of accountability for results.
Estimated time in which a program will break even (time after
that is added benefit); expressed in time.

Payback =
Time
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Program Costs
Program Benefits

X time unit
Demonstrating the ROI of Learning


Payoff Example
It cost ₹20,000 to implement new learning program.
The learning resulted in ₹35,000 savings.
The program would pay for itself in 6.84 months.

Payback =
6.84 months
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₹20,000
₹35,000

= .57 x 12 = 6.84
Demonstrating the ROI of Learning


Overwhelmed?
You only need to build a
compelling case for your
context.

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Demonstrating the ROI of Learning


Agenda
Return on Investment (ROI)
Your Context
Results That Matter
The Amazing Value of Learning
The ROI Method and Process

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Demonstrating the ROI of Learning


Reality Check
Is HR/L+D seen as a trusted and valued
business partner?
Do you have an established record of success?
Are you empowered to take intelligent risks
and make decisions?
Are you justifying an upcoming purchase or evaluating one you
have already implemented?

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Demonstrating the ROI of Learning


Plenty of Options
Cost
Output
Time
Quality
Energy

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Demonstrating the ROI of Learning

Hard Data

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Cost

Output

Time

Quality

Energy

Unit costs
Overhead costs
Operating costs
Variances
Insurance/legal
Penalties/fines
Accident costs
Sales expense

Units produced
Tons manufactured
Items assembled
Reports processes
Students graduated
Grants awarded
Tasks completed

Accounts signed

Cycle time
Response time
Downtime
Overtime
Processing time
Supervisory time
Work stoppages

Errors
Waste
Rework
Rejects
Defects
Shortages
Failures
Accidents

Water
Fossil fuels
Food
Minerals
Land
Trees
Pollution
Waste

Demonstrating the ROI of Learning

Plenty of Options
Cost

Service

Output

Creativity

Time
Quality
Energy

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Development
Culture

Demonstrating the ROI of Learning