Making the Business Case for Informal Learning

This question came up in an online seminar this morning. “How can I demonstrate the value of Informal Learning?”

First of all, understand that you’re not buying informal learning. It’s already going on in your organization. In fact, three-quarters of the learning on and about how to do one’s job is informal.

The natural learning that occurs outside of classes and workshops is vital but it probably flies under your corporate radar. No manager is accountable; no department is committed to making improvements; there’s no identifiable budget. Hence, one of the most important functions in an organization, keeping up with skills to prosper in the future, is left largely to chance.

Second of all, a persuasive business case focuses on outcomes, not activities. The measure of success or failure is business metrics, not training metrics. The only meaningful way to assess any form of learning is performance. Are workers doing their jobs well? Is their work challenging? Are workers committed to becoming “all they can be?”

Third, since no one has been re-engineering informal learning, or even thinking about it, identifying applications is akin to being the first to enter an orchard that has never been picked. Low-hanging fruit is in abundance.

If whatever informal learning intervention you are proposing doesn’t have such an obvious payback that you can explain the value proposition on the back of a napkin, pick another project.

Don’t get tricked by the word informal. Informal learning is not “do your own thing.” Rather, it often begins with values, goals, and challenges. The workers have more say-so in choosing how to accomplish them, and they are usually more demanding on themselves than you would ever conceive of being.

Examples

Sales force readiness. You think you have a problem keeping sales people up to speed? Consider Cisco. On average, Cisco acquires a new company every month. If systems engineers tried to learn via traditional methods, they would have no time left for customers. Instead of training, Cisco “Googe-ized” product knowledge, sales presentations, and competitive information, making it available on demand throughout the company. Sales people learn by using that information, not by being trained.

Benefits: better-informed sales force, more competence on sales calls, more cross-selling, better presentations, easier to bring partners up to speed, avoid cost of product training.

Eliminate bureaucracy. Knowledge workers waste a third of their time looking for information and identifying the right people to talk with. They often spend more time recreating information hidden in someone else’s file cabinet than creating original material. I just heard about a company where the workers think doing their email is the work; that’s how they spend almost all of their time. Expert locators, bottom-up knowledge management, instant messaging, organization-wide wikis, and organizational network analysis all attack this plaque in the organizational arteries.

Benefits: speed flow of information, cut time wasted searching for answers, streamline organizational process, cut email by half, cease re-inventing the wheel, increase worker throughput 20% to 30%.

Conversation. Conversation is easily the most important learning technology ever invented. Conversations carry news, create meaning, foster cooperation, and spark innovation. Encouraging open, honest conversation through work space design, setting ground rules for conversing productively, and baking conversation into the corporate culture spread intellectual capital, improve cooperation, and strengthen personal relationships.

Benefits: faster cycle time, improved problem-solving, more time on mission, higher morale, lower turnover…

Measurement

“Ah, Jay,” you ask, “but how do you measure it? What’s the ROI? How am I going to sell this to the boss? How do you prove results?”

In brief, you measure the impact of informal learning the same way you measure the impact of any investment in the organization: by its outcomes. Are people able to do their jobs? Are they challenged? Are they working in top form?

Hold your breath a moment, for some of you will choke on this one: ROI and accounting are inappropriate measures of performance. ROI is a relic of the industrial era, when assets were tangible and repetition was the path to success in the factory. Today, the intangible assets you cannot see are far more valuable than those you can.

Google’s market capitalization, what investors think it’s worth, is $157 billion. Google’s fixed assets (cash, securities, receivables, plant, property, and equipment) are carried on the balance sheet at $20 billion. So where’s the missing $137 billion? Intangibles such as reputation, know-how, and customer relationships.

Look at the world through the eyes of a senior executive. What’s better, (1) looking at how you use the fixed assets or (2) increasing shareholder value (even though its components are tough to separate out? ROI assumes training is a cost, not an investment. Whether someone has learned to do their job or not doesn’t show up in the numbers because ROI overlooks the worker’s ability to execute.

This morning, someone asked me how to measure informal learning with an LMS. Another proposed using questionnaires to capture the amount of time people spent on informal learning. Folks, this is like trying to tell time with a thermometer. Any results you get are guaranteed to be worthless.