How to Create Credible Metrics Showing the Business Impact of Capability Building
Metrics make the business world go round. Defining credible metrics for your capability building program—that are co-signed by the CEO and business leaders—will be the lynchpin move you make to secure buy-in for the program. With so many metrics available to us, you may want to ask, where does one start? At the end, we say.
Designing credible metrics for capability building programs
To gain CEO and leadership buy-in, you need to speak their language to show you understand their pain points and goals. This informs what capabilities will achieve those goals and how those goals can be observed in the workforce through performance.
And that gives us two ways to derive strategic and therefore credible metrics:
- CEO vision
- Operational performance.
Knowing what your CEO’s overarching priorities are will give you the strategic context. (Business leaders will also benefit from this route, since their unit’s KPIs filter down from the CEO’s.) This brings us to L&D metrics within capability development plans.
Training is the engine of capability building. The result is behavioural change through knowledge learned. If you know your CEO’s vision, it’ll be easier to create metrics that leaders care about and that have business value add—think impact like process improvement, individual performance and employee engagement.
A scale of competence is helpful to show your working out here (aka learning efficacy). Competency models help paint a fairly exhaustive picture of business impact through employees from poor to highly desirable performance.
Why do organisations find this such a big challenge and how can we overcome it?
Almost all hurdles to creating credible metrics for capability building can be linked back to a lack of internal alignment and support systems.
Workforce capability is not the end goal. It is the path to achieve business goals. A clear vision for outcomes will create clear metrics for successful workforce capability, but a murky vision will only create siloed and potentially conflicting ways of realising capability. Internal alignment depends on a common goal for all functions.
You’ll find it easier to adapt or derive credible metrics if you have strategically aligned learning outcomes already in place. But many L&D leaders find it hard to create alignment with other business units without proof of the business impact of L&D, making this whole issue a self-consuming snake. Learning how to speak the language of business leaders—starting with the KPIs they’re really after, rather than traditional L&D metrics—will help build stakeholder relationships.
And there’s the issue of lacking training evaluation models to begin with. Most leaders struggle to codify desirable behaviours and mindsets—yet leaders are the lynchpin for realisation of human capabilities. If you’re seeking behavioural change, you need to break capabilities into work-oriented behaviours that can be coached. Providing learning models also gives leaders guardrails in which to work, removing ambiguity.
For example: The capability may be seeking innovation. Broken down, we could narrow in on curiosity. Asking questions, working with new people, undertaking training to satisfy professional curiosity are all behaviours a leader can model and encourage in their teams.
What is the impact of not doing this as it relates to building organisational capability?
Without credible metrics, the work you do will likely lose funding since business executives need tangible data to make informed decisions. So, what is the flow of how this happens?
A lack of metrics for a program will also lead to misaligned KPIs at the performance level. That’ll lead to leaders and managers—aka key influencers—being misinformed and potentially evaluating holding their teams to differing standards, even within the same function. That creates instability on two fronts:
- Succession planning for HR
- Career planning and purpose for training amongst employees.
On both of those fronts, you’ve no employee value proposition to offer. Learning certainly won’t be sticky because it isn’t tailored to personal capability gaps or career pathways.
But that isn’t where it ends. If you don’t have a way to pad out your leadership bench and create organisational resilience, then your CEO won’t buy into the program since you’ll be effectively demonstrating L&D’s lack of business impact. Even if you can keep a program afloat, you may focus on a singular capability or certain sets of capabilities that don’t move the needle. Inadvertently wasting resources with little to no return on investment to show will only impact the future budget provided to L&D, as well as the internal support offered.
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