Keep It Simple Is the Approach to Business Evaluation

Patti P. Phillips, Ph.D., Chief Executive Officer ROI Institute, Inc.
Jack J. Phillips, Ph.D., Chairman, ROI Institute, Inc

As we assist talent development teams to show the business value of what they do, we often encounter some roadblocks such as, “this is too complicated; this is not so easy; this will take too much time; or this is too complex.” These are often symptoms of resistance based on myths rather than facts. The process is simple, and we want to keep it that way. Here are the myths:

1. Myth #1 – There is no framework available to show the ROI for every type of learning program. Not so. More than 5,000 organizations evaluate programs along the five levels of outcomes of the ROI Methodology. These levels build on a publication by Raymond Katzell in the 1950s.¹ (This is where Kirkpatrick picked up these steps in the 1950s.) So, this is not a new concept. We have modified Katzell’s work to include these levels: 1. Reaction, 2. Learning, 3. Application, 4. Impact, and 5. ROI. This is a logical chain of value that must exist for any program to have a business connection and a financial contribution.

2. Myth #2 – You cannot sort out the effects of learning. Not so. While many influences work together in collaboration to produce the business impact, senior executives and the sponsor need to know how much goes to the learning program. There are ten ways to tackle this issue and can be accomplished with the simplicity of fourth grade mathematics. To date, more than 5,000 professionals have successfully addressed this task to become Certified ROI Professionals (CRP). Without this step, you lose respect with the senior team.

3. Myth #3 – It’s impossible to convert data to money. Not so. It’s the impact data that is converted to money, not learning or application. The good news is that the impact measures that matter to the organization are already converted to money. It’s a matter of locating the value in the organization.

4. Myth #4 - The financial ROI calculation is not possible (or appropriate). Not so. While the ROI calculation should be reserved for programs that are very expensive, strategic, high-profile, and attract the attention of the management team, it is important these days to be able to show ROI when it is needed. Executives love this analysis as they ask, “Show me the money.” The ROI calculation is a simple ratio, derived from the finance and accounting literature and is a calculation the CFO will recognize and support.

5. Myth #5 – A different process is needed for each study. Not so. It’s already developed for you, much like a drop-down menu for each step in the process. The ROI Methodology has enjoyed three decades of use.

6. Myth #6 – It’s impossible to have an evaluation process that meets the scrutiny of chief financial officers and university professors while being user-friendly. The approach described here will withstand scrutiny of researchers, professional evaluators, and professors. More than 75 universities use an ROI Institute book for courses. If the research and academic community rejects a process, it’s unlikely that it will be used. The ROI Methodology is built on guiding principles that are both rigorous enough for the academic community and conservative enough for the CFO. It has become the most-used evaluation system, attesting to its user-friendly approach.

7. Myth #7 - We must have big data and an enormous amount of computer power to conduct this analysis. Not so. While big data has its place, evaluations at the impact and ROI levels for a particular program require small data analyses. For example, if 50 executives attend an expensive leadership program, a top executive might ask, “How did that program contribute to the overall organization?” You can show business impact and ROI easily if you start with why (clear business measures at the beginning of the process) and keep the focus on business measures throughout the process. By using simple processes, step-by-step analysis, and even Survey Monkey for data collection, you can have an ROI study. It’s that simple.

When there is a need to connect learning to business results, keep it simple. Impact and ROI evaluations are possible with step-by-step proven techniques, simple mathematics, and a minimal effort. In these uncertain economic times, major programs should drive business value, and various stakeholders need to see that learning makes a difference. You can only do this with serious evaluation that pushes the evaluation to the impact and ROI level. If you would like a case study showing step-by-step how this is accomplished, please let us know.

Reference:

1. Thalheimer, Will. “Donald Kirkpatrick was NOT the Originator of the Four-Level Model of Learning Evaluation.” Work-Learning Research Website. https://www.worklearning.com/2018/01/30/donald-kirkpatrick-was-not-the-originator-of-the- four-level-model-of-learning-evaluation/