4 Ways to Use Learning and Development to Support Business Strategy
Learning and development (L&D) are at their most potent when they help organisations achieve their goals, whether these be increased sales, improvements in technical quality or enhanced health care. Strategies are the means by which organisations attempt to achieve these goals, and learning and development can be used to support these strategies, as well as forming strategies in their own right.
Here are four ways to use L&D to support business strategy.
1. Ensure L&D Objectives Align With Corporate Objectives
It sounds so obvious yet is so often overlooked: training and learning objectives should be in sync with what a business or organisation aims to accomplish, that is, its corporate objectives. Too often learning and development programs run to their own agenda or are ad hoc affairs, thus missing a tremendous opportunity to assist in achieving organisational objectives. It also means that the organisation’s efforts are split and diffused leading to inefficiency and loss of impact.
It stands to reason that if a training needs analysis is carried out, that it should occur in the context of the organisation’s own goals. Anything else runs the risk not only of splaying organisational resources, but of creating inertia or confusion as training aims to achieve goals that differ from those of the organisation as a whole.
As a side note it is worth pointing out that the more clearly and crisply defined the organisation’s objectives, the easier it will be for L&D to support it. A corporate objective to ‘be customer focused’ does not give as much guidance when framing L&D objectives as ‘improve staff presentation and responsiveness to clients in our service centres and call centre.’ The improved prospects associated with clear objectives places the onus on senior management to think through and crisply articulate what the organisation is aiming for.
2. Capture Corporate Objectives in Individual Performance Agreements
In the same way that L&D objectives should reflect corporate objectives, individual performance accountability mechanisms should likewise reflect corporate objectives. This is so that the individuals and organisation’s efforts pull in the same direction.
The L&D implication here is that the individual’s development and performance needs can be evaluated and discussed in the context of what the organisation is trying to achieve. In effect this is one means by which L&D objectives align with corporate objectives.
3. Use L&D to Enhance Performance Drivers
A critical means of getting to grips with organisational performance and of making strategies more effective is to understand the key drivers of performance. These are the areas that a business or organisation needs to focus on to boost performance. It’s one thing to say that an organisation must be competitive; it’s another altogether to unpack those factors that underpin competitiveness, and to systematically target efforts toward their improvement.
An example of drivers for a retail business might include reliability and responsiveness of suppliers, well targeted marketing efforts, and staff who understand the needs of customers. For a capital-intensive utility, key drivers might be the efficiency and scope of the maintenance regime, safety and risk processes, and investment for growth and scale economies.
For the retail business it may be found that L&D can be used to improve staff capability in managing deliveries and inventory; crafting clear value propositions and offers in marketing collateral; or enhancing phone skills for call centre staff. For the utility, L&D might optimise the scheduling of maintenance works; improve safety awareness around hazardous chemicals; or sensitise staff to best practices in investment planning.
Performance drivers will often be identified through strategic or business planning efforts, and provide ‘hooks’ for L&D. Having an understanding of performance drivers is a good place to start when developing L&D plans and training needs analyses, and the latter can form the basis of effective business strategies. This leads to seeing the strategic import of L&D itself.
4. L&D as a Strategic Objective in Its Own Right
L&D is a critical factor of competitiveness in knowledge based industries. Skill and human capability represent a major form of capital in these industries, and in businesses where there is substantial knowledge content embedded at some point in the value chain.
Differentiation is at the heart of strategic endeavour and having a skilled and responsive workforce can be the differentiating factor enhancing a company or organisation’s prospects for commercial success or high performance.
A great example of this was GE’s concerted effort to invest in human capital under Jack Welch, who was Chairman and CEO between 1981 and 2001. This was part of an explicit strategy to de-commoditise GE’s businesses by moving towards high value added technology and service add-ons.
GE’s market value rose from US$14 billion when Welch took the helm, to US$410 billion at the time of his retirement, and the investment in human capital was one arm of the success of this strategy.
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Enhancing a workforce’s capability can be a powerful element in improving organisational performance; what is required is some focused thinking and planning to ensure training goals support the organisation’s goals, so that the full impact of L&D can be realised.
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This article first appeared in the June 2010 issue of Training & Development in Australia
© Michael Carman 2010