Learning and Development L&D CHAPTER 14 Adding value

THE PURPOSE OF THE CHAPTER To explain how L&D activity can add value to an organisation. KEY THEMES Clarifying ‘added value’ The Value Chain model Align, engage and measure: aligning the people Engaging the people Measuring the data

ADDING VALUE: A DEFINITION To add value is to make a difference where it matters most. It means producing outcomes that enable the organisation to respond better than it could before to challenges and threats, and to do so at a cost – in the widest sense of that word – that is considerably less than the value of those outcomes.

PORTER’S VALUE CHAIN OF THE FIRM (1980) A firm’s value chain consists of five linked primary activities that convert inputs into outputs Inbound logistics Operations Outbound logistics Marketing and sales Service ‘Support activities’ are those that underpin these five primary activities. These include: Management of the administrative infrastructure HR policies and practices Research and development Procurement

GREEN’S (1999) THREE-STAGE ‘ADDING VALUE’ FRAMEWORK Align Point people in the direction of the organisation’s purpose and corporate goals. Engage Develop their belief and commitment to the organisation’s purpose and direction so that they are willing and capable of ‘going the extra mile’ in working for it and its corporate goals. Measure Provide the data that demonstrate the value-adding results your activity achieves.

FOUR WAYS OF MEASURING THE VALUE OF LEARNING (Anderson, 2007) Learning function efficiency measures Used to assess the efficiency and effectiveness of the learning function Key performance indicators and benchmark measures Used to evaluate L&D processes and performance through a comparison with external standards Return on investment measures Used to establish the economic benefits of specific learning and training interventions compared with their costs Return on expectation measures Used to assess how far the benefits expected by stakeholders from the L&D investment have been realised – ie to establish ‘added value’ of the investment