In The Story Factor, author Annette Simmons tells a simple
parable of linking everyday tasks to a larger mission.
A man came up to a construction site where three people were
working. He asked the first, What are you doing? and the man
answered, I am laying bricks. He asked the second, What are you
doing? and the man answered, I am building a wall. He walked up to
a third man, who was humming a tune as he worked, and asked, What
are you doing? and the man stood up and smiled and said, I am
building a cathedral.
Building a cathedral is a monumental, resource-intensive,
task. Notre Dame Cathedral was not built in 10 or 20 or 50 years.
The mission for federal and state agencies is equally profound.
many other responsibilities, agencies must design and maintain
protect the environment, defend the country, and explore space.
the mission within each agency continues to position the United
States as a
Certain resources are required to accomplish agency missions:
processes, people, and finances. The past three years have posed
edented economic challenges for businesses and government
The nations worst recession, staggering unemployment rates, federal
battles, and fiscal belt-tightening not seen in yearsall create
to achieve mission-critical work. During tough economic times,
resources are scarce and even threatened. Yet, those who are
responsible for requesting and managing budgets do have one tool in
particular that can help defend the spend: data. Quality
information about the effectiveness, efficiency, and outcomes
(results) of an agency is the best way to justify current spending
and even request budget increases.
The three brief stories below provide examples of how budget owners
can defend their spends. These examples relate specifically to
learning and development departments, but the situations can be
generalized to others. Each example has very different outcomes
based on the data and information provided.
The chief learning officer summons her top learning director to her
office to review the curricula and the finances for the past year.
Also in the room is a senior manager from the budget directors
office. When the CLO asks for a summary of the curricula taught
throughout the year, the learning director provides substantial
information about the number of courses taught (by various learning
methodologies), the number of hours consumed by learners inside and
outside of the agency, and how these courses align with the agencys
Once the CLO is satisfied, the senior manager asks for financial
information. In response, the learning director adeptly presents
pertinent information: the total cost of training for the year, the
cost of training per learner (by learning methodology), costs for
development, costs for delivery, and costs for classroom space and
technology tools. After the senior manager leaves, both the CLO and
the learning director agree that the presentation went well and
that they are clearly adding value to the organization. A week
later, the CLO receives an email from the budget directors office
that new fiscal budget cuts are expected. There is internal
competition for every dollar. Training costs are judged to be too
high. In fact, the training budget will be cut by 50 percent.
Again the CLO and the top learning director meet with a senior
manager from the budget directors office. Rather than delve into
the curricula and associated costs, the learning director shares
very specific information about the effectiveness of the L&D
He demonstrates that training is substantially increasing knowledge
across the curricula. He shows that more than 75 percent of all
learning is applied within six weeks. Scrap learning (training that
is learned but never applied on the job) is lowless than 25
percentand is astoundingly good compared to an industry benchmark
of 65 percent. Moreover, evaluation results show that training
improves job performance and helps workers achieve strategic goals
for the agency. Results are displayed in an interactive dashboard
that allows the learning director to display various cuts of the
A week later, the CLO receives an email from the budget directors
office with a mixed message: the L&D group is doing excellent
work to help support the goals of the agency, but due to fiscal
contraction and internal dollar competition, the budget will be cut
by 10 percent.
Efficiency, Effectiveness, and Outcomes
In a third situation, the CLO and learning director use scorecards
and dashboards to show a mix of information. The dashboards show
efficiency metrics that include the number of courses delivered,
the total costs, and the average cost per learner.
On a separate set of display tabs, they show effectiveness
information: The curriculum is performing well in most areas and
contributes to knowledge and skill acquisition, application of
learning, and improved performance. Most courses produce a positive
estimated return on investment and return on expectation. Programs
that do not show success are scheduled for revision or retirement.
Lastly, the learning director shows how each section of the
curriculum supports mission-critical aspects of the agency,
focusing on such agency outcomes as higher employee viewpoint
survey ranking, more efficient acquisitions office performance, and
better case management for audit and oversight functions.
At the end of the meeting, the CLO recaps that training is focused
on being efficient and effective while helping the agency achieve
mission-critical goals. Moreover, she asks for a budget increase
because she has been able to demonstrate the impact of L&D. A
week later, the CLO receives an email from the budget directors
office indicating the L&D group is doing excellent work.
Despite the challenging fiscal climate, the budget will remain the
same for the coming fiscal year.
Tools for Reporting
In their 2007 book, Beyond HR: The New Science of Human
Capital, John W. Boudreau and Peter Ramstad discuss the data
required to optimize organizational performance. The three main
metrics are efficiency, effectiveness, and outcomes. Certainly, it
is not easy to gather comprehensive information from all three
areas (because the data come from so many different systems), but
some information from each is better than nothing at all. Value is
achieved when the information is shared with stakeholders.
Thereafter, stakeholders can make data-driven decisions about what
is working in terms of people, finance, and tools, and what needs
In alignment with the Boudreau and Ramstad optimization model,
KnowledgeAdvisors, a human capital metrics company, has begun
working with private and public-sector learning and talent
development leaders to create a reporting framework called talent
development reporting principles (TDRP), which is designed to
facilitate conversations with senior leaders. The intent is to
create a framework with common terminology and measures, which in
turn will contribute to a greater understanding of successful
practices and meaningful comparisons across organizations.
Inspiration for the framework comes from the set of generally
accepted accounting principles (GAAP), which has been used by the
accounting profession in the United States since 1973 to provide
consistency, clarity, and uniformity in the analysis of the
financial well-being of organizations. The information produced
using TDRP provides a solid foundation for analysis, just as the
data produced by accountants provides the foundation for financial
analysis, according to GAAP.
As the above figure shows, the report(s) provided at the top of the
framework are macro-level summaries based on data collected from a
variety of systems shown at the bottom. Importantly, the data align
with the three groups of metrics: efficiency, eff ectiveness, and
outcomes. Two types of reports are provided as outcomes: statements
and summary reports. Statements are designed to match the look and
feel of financial statements so senior leaders can review them
quickly. Executive reports are brief narratives that explain the
results in more detail.
Protect the Budget With Data
With downward pressure to reduce federal spending levels and
increased expectation to demonstrate accountability and results, it
can be especially difficult to provide mission-critical services
when budgets are threatened. One powerful way to protect ones
budget is to use available data on efficiency, effectiveness, and
outcomes to keep stakeholders informed.
Sydney Smith-Heimbrock, director of OPMs leadership and HR
development solutions, says, The value of a training investment can
oftentimes be elusive. Intuitively, we understand that it makes
sense to develop our people; quantitatively, however, we have a
difficult time measuring our lasting impact on individuals and
organizations. John Wanamaker, a legendary turn-of-the-century
merchant, is remembered for saying -half of my advertising is
wasted; I just dont know which half. For many managers, the same
is true training.
Applying metrics to our training ficiency, effectiveness, and
outcomes. programs not only gives us an objective method for
improving them, it helps us identify the elements that are truly
important to our customersthat is, what concepts are really being
put to work.
We have adopted a disciplined measurement program that quantifies
the impact training has back in the workplace. With this
information, we are able to demonstrate to our agency customers
that their investment pays dividends in organizational efficiency
and productivity. Most of all, the metrics provide a transparent
method to show that the government is providing the best value it
can to the taxpayer.