Having Your Customer Define Training Success

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ROI is DOA How ROE (Return on Expectations) is a
Better Measure of Training Success

• Having Your Customer Define Training Success

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• That is a good book that is opened with
  expectation and closed with profit Amos
  Bronson Alcott

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ROI Return on Investment
Unfortunately, ROI may be
DOA
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DOA
Demanded by Older Authorities
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ROI

• Some Facts on ROI
• Out of 96 company CEOs surveyed, only 4 of those
  companies measured ROI (ROI Institute 2009
  study)
• 58 of training managers are not required to
  report on the effectiveness of their work
• 69 are not required to report on productivity
• Even ROI proponents agree that accounting
  methodologies make it difficult to measure ROI
• Hansen, C and Lee, Y-T (2009) The Cultural
  Context of Human Resource Development

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ROI Versus ROE

• ROI is completed after the fact
• ROI is hard to prove
• ROE is easy to prove
• ROE is completed before the fact (although
  measured after the fact)

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Hindsight is 20/20
Photo by Ira Block
This was the first and last time that Irving
would agree to give Marge a piggy-back ride
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ROE

• ROE is
• Customer focused
• Customer designed
• Customer accepted
• ROE is COLLABORATIVE!

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ROE

• ROE is not a soft measurement
• Can include monetary measures
• Its a better gauge of training success
• Its simple to complete!

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ROE

• ASTD-IBM study involving CXOs and CLOs
• Two very interesting findings
• CXOs are less concerned with quantitative metrics
  that show learnings value contribution to
  business outcomes
• Perception of stakeholders are a key indicator of
  learnings value
• ASTD-IBM 2005 Study C-Level Perceptions of the
  Strategic Value of Learning Research Report

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ROE

• What does this study mean for ROE?
• Perception is important with regard to the value
  of training
• ROE can create perception
• Additionally, this same study found that word of
  mouth is the most common measure of effectiveness
  that trainers felt was important to their customer

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ROE Versus ROI

• Characteristics of ROE vs. ROI Donald
  Kirkpatrick

ROI ROE
Defensive isolation approach that separates functions
Defines training as an end in itself
Value defined by predetermined formula
Focus on single metric of numeric proof
Complex, rigid, and expensive
Proactive, business partnership approach that unifies teams
Defines training as a contributor to key business results
Value defined by business stakeholders in cooperation with training
Focus on comprehensive evidence and a compelling story of value
Easy to understand, flexible, and cost-effective
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To ROE or ROI, That is The Question

• When to use ROE vs. ROI

ROI ROE
When metrics can be identified and tied directly
to the training intervention
When there are no metrics that can be tied
directly to the training intervention
When absolute costs and benefits are
requested/expected by Boards or Shareholders
When the trainer can meet with the customer prior
to the training intervention
When use of ROI is low (less than 10)
When ROI has been utilized on more than 5-10 of
training interventions
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ROE and the RC

• ROE is measured using a Results Contract (RC)
• RC is the agreement between customer and trainer
• RC is completed before design starts (scored
  after training delivery)

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ROE
Blank Results Contract
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ROE
Completed Results Contract
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• Training Value

S (Io x Ro)n
X 100

• Where
• I Importance
• R Results
• o objective
• m maximum achievable results
• TrV Training Value as a percentage - 80

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ROE
Results Contract With TrV
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ROE
Completing a Contract
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Summary

• ROI is difficult to prove
• C-level executives are more interested in
  perception
• ROE can create very positive perception
• ROE is simple to implement

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