Gerry Sequeira is a former PwC consulting Principle experienced in leading strategy and operations engagements across US, LATAM, England, Spain, and Germany. Gerard has an MBA from the Darden School and a BS from the McIntire School (both at the University of Virginia).
Certified Lean Six Sigma Master Black Belt (MBB), with Private equity experience. Led cross-functional, enterprise wide engagements in diverse industries (financial services, pharmaceutical, heavy industry, oil & gas, specialty chemicals) to improve EBIT through expense and waste reduction, revenue generation, and improved customer retention.
5 L&D Metrics That Actually Matter to the C-Suite
TRACK THESE KPIS, EARN YOUR SEAT AT THE TABLE
As a former PwC Consulting Principle and a veteran of more than two dozen enterprise transformation efforts, I find it surprising that performance metrics that are consistently part of my conversations with the C-suite are not typically used by the highly essential function of L&D. It’s not for lack of awareness, attention or trying. Everywhere I turn, I read industry articles about ‘Thinking Beyond a Seat at the Table’ or ‘Learning’s Role in Innovation.’
I might argue that the question is not so much what L&D’s role should be, but why Learning teams may find themselves playing a predetermined cameo role in the first place. I believe that the answer lies in knowing which metrics really matter to the C-suite.
I submit exhibit A.
In PwC’s 2020 talent trends, 74 percent of CEOs rated the availability of key skills as a top concern. And of those, 32 percent were “extremely concerned.” Some 41 percent said that their upskilling program has been “very effective” in creating a stronger corporate culture and engaging employees.
In the 2021 Deloitte Global Human Capital Trends survey, 72 percent of executives identified “the ability of their people to adapt, reskill, and assume new roles” as the most or second-most important factor to navigate future disruptions. And 41 percent of executives said that building workforce capabilities through upskilling and reskilling is one of the most important actions they are taking to transform work.
The implication is clear: CEOs and HR leaders recognize the crucial reliance on a workforce with the right skills. The need is especially true given the rapid advances in workplace technology and the persistent skills gap for those workers with outdated skills.
Since businesses continue to invest in learning and talent management, one can reasonably assume that these programs deliver important benefits. Nevertheless, in CGS’s research into the top priorities for L&D executives, business metrics (costs, ROI, mobility) are ranked the number one priority that learning programs need to address. This ranking indicates that the C-suite is increasingly committed to objectively measuring the impact of learning on business outcomes.
The challenge is likely due to a misalignment between what CEOs consider important and what L&D is accustomed to measuring. CEOs usually focus on specific examples of measurable business impact, whereas L&D often measures effectiveness subjectively. I experienced this during my work on over a dozen enterprise transformation engagements, all of which included a significant skills acquisition component. During these engagements, I observed that L&D was typically limited to an administrative role rather than as an integral business partner. Given L&D’s “cameo” role, it’s not surprising that the analytics collected are not completely in sync with the C-suite.
The L&D analytics are subjective because they are usually assessments from participants on the training and development program. This data can include 1) how confident they are in their ability to apply acquired knowledge and skills to their jobs, 2) their perception of the relevance of training received, 3) the effectiveness of training materials and instructor quality and 4) how conducive training venues are to adult learning. Unfortunately, I have rarely observed an attempt to assess—longitudinally—the effectiveness of the training efforts on actual job performance.
Here are some steps L&D teams can take to remain relevant and increase its influence with the C-suite:
1. KNOW YOUR BUSINESS
Global organizations are extremely complex, and it’s virtually impossible for a CLO to understand all of their company’s operations. It is possible, however, to be well-versed in the KPIs used by functional, line of business and regional leaders. While every business is different, it’s safe to assume that these KPIs will be tailored versions of the following key business metrics. Each of these represents an important objective measurement on growth and progress.
- Revenue: sales, margin, earnings before interest and taxes (EBIT)
- Customers: satisfaction, Net Promoter Score (NPS), churn, retention, error or complaint rates, waste and defects
- Operations: scrap and defect rates, error or complaint rates, cycle times and lead times, inventory turnover, working capital ratios
- Innovation: new product introduction (NPI) time and cost, new products/product portfolio
- Regulatory: Compliance costs, audit effectiveness
For L&D leaders, the challenge is to find out what your business leaders have on their dashboards. The graphic below provides some useful examples of what members of the C-suite track regularly. Depending on the industry and company, these could be on any CXOs daily, weekly or monthly dashboard.
2. BE PROACTIVE
Learn about your company’s 12- to 24-month strategic objectives and the potential skills challenges in meeting them. In most companies, strategic objectives are cascaded down and become part of most employees’ development plans. Speak with plant managers, site leaders, call center managers and managers of shared service centers. In these conversations, you can learn the objectives they need to achieve and their teams’ skills deficiencies. Similar insights can come from structured conversations with regional sales directors, marketing directors, procurement managers and compliance directors. These conversations will also reveal the special projects in their 12- to 24-month pipeline, as well as the skills gaps they’re encountering.
In my transformation work, a perennial challenge is finding the right people to undertake these strategically important projects. Given the evolving demands of any business, these projects could be with compliance, marketing, sales, operations or HR. The best people are usually overcommitted, but there are other players on the bench who are equally capable with some support. L&D can provide the needed support and drive proactive programs that strengthen and futureproof the business. Before a pain point bubbles to the surface, it’s a good idea to identify these players on the bench and assess what type of training L&D can offer—whether it’s problem-solving, interpersonal skills, emotional intelligence, creativity or leadership.
3. MEASURE WHAT’S IMPORTANT
While trainee feedback on instructional materials, instructor quality and training venues are important, it’s only useful for L&D, not the C-suite. Consider putting together data collection mechanisms that measure longitudinal performance objectively. Don’t rely solely on trainee feedback that is inherently subjective. For example, in rolling out specialized problem-solving training in support of transformation programs, Learning teams might enlist the help of the Finance organization to measure the EBIT impact of projects undertaken by trainees.
These numbers provide objective evidence of training effectiveness and very compelling ROI statistics for the C-suite. Imagine a CEO’s reaction to a training program that costs about $4,000 per head and delivers $100,000 per head in EBIT!
These are relatively straightforward steps for Learning and Development teams to take on. I am convinced that they can transform their participation in strategic projects from cameo roles to center stage in the C-suite’s eyes.
Using multiple versions of the ABCD approach—Always Be Collecting Data and Always Be Connecting the Dots—L&D will land an undisputed lead role in delivering on the business metrics that matter.
Whether you’re focused on metrics, content or other aspects of your L&D journey, some knowledge and best practices can help. For more tips and insights on how learning can empower the workers and the workplace of the future, get your copy of our report on Finding the New Normal.