The Big Picture on ROI

Capitalworks' Jeff Kelley addressed this morning's meeting of the Learning Economics Group on the topic of Dimensions, Dynamics and Drivers of Learning: Optimizing Learning Value for Capital Effects. If you really want to get to Level 4 at the highest level, Jeff's your man.

Lucky for you, you can grab Jeff's PowerPoint presentation here.

Capitalworks' logic and findings are the best I know of. They inspired my understanding of informal learning and metrics. The Capitalworks material is so compact yet so eloquent that it's almost poetry. Let me amend that. It's poetry if you're conversant with the concepts of finance.

Jeff and his partners get it. Jeff contends that "Learning is the single greatest contributor in all enterprises to superior operating performance and robust value creation."

Capitalworks stalks Learning Effectiveness, defined as:

    The performance of an organization's applied learning portfolio in contributing to operating performance and value creation. Applied learning includes formal learning (training) and informal learning occurring naturally in social practice.

Why is learning vital?

  • Learning enables flows and exchanges of knowledge through diverse intra- and inter-enterprise interactions.
  • Learning transcends hierarchical constraints.
  • Learning connects demand drivers.
  • Learning accelerates systemic effects.

Learning is the great enabler of flows and exchanges of knowledge. With flow, you are primed. Everyone has workarounds. Workarounds are really positive. Learning transcends hierarchical constraints. Organizations are not optimized to connect demand drivers. In fact, we're living with obsolete, 19th century organizational structures created for an illiterate workforce long before the advent of computers. Jeff points out that "Optimizing dimensions, dynamics and drivers of learning are natural means of transforming costs of coordination in all enterprises and their ecosystems." Learning itself is the ultimate workaround.

Learning is one of our primary earning assets and we should manage it that way. Looking at the flows, here's the Value Creation Circulatory System:

It's nonlinear, continuous. Process orientation. Feedback loops are critical. A single measure doesn't get us there. (Emergence, emergence....)

What enables flow? Self-study contributed as much to job proficiency as instructor-led training programs. Own volition. Regard selves as professionals. Informal learning dynamics contributed 70-to-80% of operating performance. Cohesion of social practice contributed to learning effectiveness, with informal learning as an enabler. Conversations are the primary conduit:

Read this one twice if you need to; it's important. "We see contributions by learning, like other intangibles, through value drivers. They enable us to depict causal relationships in the interactions associated with transactions, decision flows, procedures and other normal activities. Value drivers interact in clusters and sets throughout organizational work practices."

Intangibles, which we had thought of the sauce, is what it takes to drive performance.

"Discovery consists of seeing what everybody has seen and thinking what nobody has thought."
Albert Szent-Györgyi


Posted by Jay Cross at June 10, 2004 09:37 PM | TrackBack

See also these four charts on sources of applied learning from the Department of Veterans Affairs.

Posted by: Jay Cross at June 10, 2004 10:36 PM

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