Imagine my surprise when a friend told me they’d seen a book that quoted me extensively. Huh? I’d never seen this book, even though it’s been out for the better part of a year. Here it is:
Online Learning Today
by Heather Shea-Schultz
and John Fogarty
Berrett-Koehler Publishers, Inc
Lots of people have helped me in my career, and I like to balance my karma account by providing help to people who ask for advice or favors. When a guy I had not met called me a couple of years ago for help with a book he was writing on eLearning, I freely gave him an interview and permission to borrow material from the white papers on my site. I never heard from him again.
Having recently published my first book, I may be too touchy about these things, but I cannot imagine interviewing someone for a book (mentioning him by name on pp 46-48, 76-77, 78-79, 82, 165, and 169) and not sending him a complementary copy of the damned book!
ROI ain’t what it used to be, according to Jay Cross, resident guru and curmudgeon emeritus of the Internet Time Group. With the possible exception of Autodesk’s visionary Wayne Hodgins, no one else on the high seas of e-learning has Cross’s foresight or humor. With a prescience bordering on the clairvoyant, Cross is constantly sought out for his industry forecasts and insights.
As to ROI, Cross is typically irreverent: “ROI is a traditional financial measure, developed by DuPont, and once credited with making General Motors manageable. But it hasn’t kept pace with the times. The R is no longer the famous bottom line, and the I is more likely a subscription fee than a one-time payment.”
Cross insists that traditional ROI matrices are an anachronism when applied to online learning. Why? Because traditional ROI has no measuring stick to distinguish a good idea from a bad one, so excellent training hits the books at the same value as bad. The trend and emphasis is on understanding business strategy and goals and how training moves the organization along. Maybe the future is ROS, return on strategy.
Thus, Cross discourages e-learning proponents from trying to sell e-learning via ROI talk. “Consultants relentlessly drive home this message: `If you want to sell a big project internally, you’ve got to talk ROI … it’s the language senior managers understand … being fluent in ROI talk enables you to position an e-learning project as an investment rather than a cost … it’s the secret handshake that gets you into the inner circle of those who control budget dollars, et cetera and et cetera.’
“Well, it’s reality-check time,” Cross counters. “Talking the ROI talk won’t enable you to pass yourself off as an astute businessperson. You have the same chance of passing for French with a beret and Berlitz phrase book. A little knowledge can be a dangerous thing.” Cross believes that executives making a significant business decision consider a wide range of factors and intricate potential trade-offs, such as these:
But remember what Jay Cross said about ROI: it ain’t what it used to be. The old yardsticks no longer apply, and they can actually get in the way. As Cross posits, “Why measure incremental improvements when you’re seeking the Holy Grail?”
True, traditional financial analysis works in most business accounting, but it goes askew when measuring intellectual capital and other off-the-balance-sheet improvements. Making business decisions entails a wide range of factors and involves intricate trade-offs-it’s not all bottom-line dollars and cents.
Says Cross, “Unless your training (or e-learning) unit sells training for a fee-generating its own revenues-the returns on investment come from satisfying the needs of business unit managers.” He advises that linking e-learning results to business results is more useful than coming up with pseudo-ROI figures. “The only valid training ROI is business ROI.??
International Data Corporation (IDC) studied the buying behavior of corporate and IT training managers and concluded that ROI will no longer be measured in savings or reduced cost of training. Instead, attention will be directed to “measurable changes to business metrics resulting from training investments.” Those benefits will only emerge, however, if vendors focus on solid instructional design and engaging learning environments.
Thus, a senior manager’s appraisal of e-learning’s impact is often visceral (gut instinct), based on how satisfied he or she is with employee performance and how much of that improvement the manager can ascribe to e-learning. As Cross puts it, “Feelings win out because the assumptions used to create the (ROI) numbers can always be challenged. Projects that evoke the best feelings make the cut.”’
Why? Because managers own the problems that training solves-online or offline. They’re generally pragmatic, and their overriding interest is to get the job done now, if not sooner. The business unit manager is often e-learning’s primary sponsor-along with HR and IT. Moreover, the manager understands the goal of any training, since it is he or she who oversees the environment in which performance gaps occur. Thus, the first step in measuring e-learning’s impact on performance is eliciting the business manager’s answer to the classic query “What’s in it for me?”
When the learning is completed, assess the results according to benchmark measurements established with the unit manager. “Extrapolate behavior changes into measurable business,” counsels Jay Cross. “There’s no room for vagueness-and no backing away from visible quantitative evidence.” He also suggests that further interviewing and a review of business results may be useful.
Finally, Cross advises presenting any findings and a simple cost/benefit analysis to the business manager or training sponsor-not a full-blown “ROI.”
As Cross and others point out, present-day accounting is an anachronism when applied to e-learning. “Traditional accounting only recognizes physical entities,” Cross explains. “Intangibles are valued at zero. Vast areas of human productivity-ideas, abilities, experience, insight, esprit de corps, motivation-lie outside its vision field. It doesn’t recognize that people become more valuable over time.”
To many corporate executives today, Cross, the traditional concept of training ROI is obsolete. Business unit managers value time more than ROI. Major decisions are based on descriptive business cases, not pro forma budgets. Senior executives tend to be more interested in the top line (dynamic growth from new markets and innovation) than the bottom line (the accounting fiction of profits). Why? The answer, according to Cross, is simple:
“The ‘Net changes everything.”
HOW TO CAPITALIZE ON E-LEARNING
Look to the learner. What are the real needs? What are the options available?
As Jay Cross points out, investment analysts seem to think that harvesting the rewards of e-learning is a breeze. “Simply convert your existing content to digital form, slap it onto the corporate intranet, and immediately save millions in travel, bricks and mortar, and instructor salaries while training all those IT workers everyone needs.” Alas, such is not the case. You’ve got to customize the learning for the learners.
Epilogue: What to Do Now?
WHAT WORKS FOR YOU
One thing is certain-e-learning will evolve into something so simple, so eloquent yet all-pervasive and natural, that our grandchildren will wonder with dismay why we didn’t see it coming. We believe that Wayne Hodgins, Marcia Conner, Jay Cross, and a host of others in the field are correct when they say that we’re just watching this universe form. It will cool and coalesce to become so much a part of our everyday lives, we won’t even think of it as a separate facet of work or play. It’ll simply be how we do things.
As we said when we began, nothing is the same as before. Old technologies are changing; classroom walls are rearranging. As Jay Cross puts it so well, “The ‘Net changes everything.”
Or, the way we see it, the net of online learning that works is a net-net benefit for everyone, everywhere.
Correction: I am not a curmudgeon emeritus. A “curmudgeon” is a crusty, ill-tempered, and usually old man. (Thanks, John and Heather.) “Emeritus” is a fancy way of saying retired. (No, I’m still here.)
30 Poppy Lane
Berkeley, California 94708
1.510.528.3105 (office & cell)
Subscribe to this Blog
Our Infrequent Newsletter
Entries by category...
Recycled from Blogger
Internet Time Group
© 2004 Internet Time Group
Blogger Experience, Housekeeping, Something New
Demographics is destiny
Are you setting the bar high enough?
Work as Video Game
Oracle and Macromedia, Sitting in a Tree
ASTD Silicon Valley
Kingsbridge Conference Center
First Post by Email
RSS Feed for New Site
Testing ... testing ... 1...2..3
IT Doesn't Matter - Learning Does.
All blogging is political
Damn, damn, double damn
The New Religion
Wolf! Wolf! Wolf! Wolf! Wolf! Wolf!
Business Process Management (2)
Business Process Management Conference
Don't Lose a Common Sense: LISTEN
It's only natural
Go with the flow
Time Out for the Fair
Informal get-together in SF this Wednesday
Repetition, reverb, and echoes
Push vs pull
The Big Picture on ROI
New Community of Practice Forming
Training Directors Forum 2004
A Rare One-Liner
PlaNetwork LIVE 2
ASTD 2004 Leftovers
Worker Effectiveness Improvement, not KM
Jay's Talk at ASTD
Mintzberg & Cooperider
Lest ye forget
ASTD International Conference & Exposition 2004
What is Workflow Learning?
ASTD msg 1 of n
Look out, it's Outlook
Collaboration at ASTD Next Week
Tell me a story
The shortest presentation on metrics you will ever hear
Back to Blogger
The Alchemy of Growth
Very loosely coupled
E-Learning from Practice to Profit
Robin Good kicks off Competitive Edge
Emergent Learning Forum: Simulations
The Best Things in Life Are Free
Metrics and Web Services
OpEd: ROI vs. Metrics