When in the early ‘90s, Steve Kerr was offered the job of a Chief Education Officer at General Electric, he jokingly said to his boss Jack Welch ‘I’m going to be a CEO, just like you’. Jack Welch laughed and proposed that Steve became the Chief Learning Officer instead. This is how CLOs got their name. At the time, it was up to Steve Kerr to create his job. He had a lot of freedom to design a learning strategy and develop programs, but he was under constant pressure to prove the impact of his work. At that initial stage, many doubted the ability of training to respond to practical business challenges.
Since then, CLOs have become essential to companies and the learning industry has grown more and more complex. But being engulfed in learning industry challenges, methodologies and literature can make it hard to take a step back. CEOs are usually better positioned to look at training in relation to larger business goals, which is why the CEO to CLO relationship is so important.
At Training Orchestra, we work with both CEOs and CLOs, and their perspectives offer valuable insight on what CEOs actually expect from their CLO, and what the priorities should be. We recently met Jean-Philippe Peugeot, the CEO and President of Etablissements Peugeot Frères, the majority shareholder of the PSA Group, one of the world’s largest auto manufacturers. We discussed with Mr. Peugeot his expectations regarding learning.
What Matters to a CEO
Mr. Peugeot has no doubt: learning is essential to maintain a company’s competitive edge. But, in order to be effective, the learning strategy needs to help achieve the company’s business goals. The truth is that very few companies actually manage this elusive alignment. According to Brandon Hall Group’s 2018 Learning Strategy Survey, only 39% of companies declare that their L&D strategy is linked to their business goals. In fact, only 6% of companies consider their strategy very effective in helping them achieve business goals.
CEOs expect their CLO to be a ‘seat-at-the-table’ business partner, and three things are particularly crucial to demonstrate business impact: relevance, effectiveness and reach. Relevance means providing training that correlates to business success. It entails careful yearly planning of training and selection of the most strategic programs. Effectiveness is achieved when it ensures maximum retention and engagement. And reach, which is often forgotten, assures that everyone who needs to be trained receives their training in a timely manner: it necessitates proactive anticipation of training needs and superior operational effectiveness.
The good news your CEO wants to hear: “We have identified 5 skills critical for our success in the next 5 years and have implemented programs specifically dedicated to nurturing these skills. We were also able to train 10% more employees than last year. ”
A key aspect of the CEO’s job is to ensure the profitability and financial health of the company. They may need to be ruthlessly frugal. Training is generally a cost center, and most CEOs agree that learning budgets could be better used and possibly reduced to enable investments in other areas. Learning departments know all too well that in tough times, the training budget is one of the first ones to take a hit. A few key strategies can enable up to 20% budget optimization. Budget forecasting and cost-tracking can help to identify and reduce unnecessary costs. Resource optimization can help you to make the most of your assets: in many companies we work with, training resources are currently used at around 50 to 60%. Efficient organizations should aim for a utilization rate of at least 75%, which can be easily done by tracking session occupancy rates and implementing a resource management software. Coordination, data centralization and administrative efficiency can be achieved through the right learning technology.
The good news your CEO wants to hear: “We know exactly how much we spent on training this year. It fits with our beginning year projection, and is down 15% from last year thanks to better planning, optimization and administrative efficiency”
CLOs are responsible for the strength of the learning function globally. To accomplish this mission, they need to reap the benefits of consolidation to improve responsiveness across global teams, increase performance, and reduce training costs. Your CEO wants you to show him the money, so make sure you can report on global performance. To get to this level of global visibility, integration of local training needs, compliance requirements and currencies into a core platform is a must. However, thinking global is not only about geography: it means thinking beyond your own employees in order to train all the audiences that impact your business. In this context, your CEO will probably be impressed if you manage to integrate external audiences such as customers and partners into your training strategy.
The good news your CEO wants to hear: “Our 40 training centers have all been integrated into a centralized platform, and with it all our data including learner history and global training costs. We’ve implemented new training programs to improve our partner performance, which are for the first time coordinated with our internal training efforts.”
What doesn’t matter
Learning delivery method
For all the literature and conferences about shiny learning innovations, the truth is that CEOs do not care about which delivery method is used. For them, eLearning, ILT, blended learning, even AR or gamification are just the same: operational details. Is the learning useful? Does it help achieve business goals? That’s all that matters to the CEO, and innovation for innovation’s sake doesn’t get bonus points.
If effectiveness is what really counts, let’s look at what the data tells us.
According to the 2018 Workplace Learning Report, Instructor Led training is the most used training delivery method. Typically, 85% of a company’s training is done face-to-face. More significantly, the popularity of interactive in-person training is growing. The 2017 survey reported that 78% of a company’s training programs were delivered through ILT. This is not a surprise: according to a 2015 Brandon Hall Group study, 56% of ILT modules are highly effective against 21% of eLearning modules.
The good news your CEO wants to hear: “Our new training programs have increased participation and satisfaction rate, and productivity increased by 10% in the last 3 years”
How to get there
At Training Orchestra, we designed our solution to help CLOs manage training as a business. We give them the forecasting, planning and reporting capabilities to manage training strategically on a large-scale and ensure business impact. Our end-to-end solution helps CLOs:
- Plan a global strategy by incorporating all training needs in a comprehensive training plan
- Prioritize investments by tracking operations with the highest ROI
- Optimize the training budget by controlling and forecasting costs while driving training revenue
- Monetize training to run the L&D department as a business
- Reach business goals by leveraging real-time KPIs and reports along the way
Get a personalized report assessing your training performance and compute your potential ROI from optimization, with Training Orchestra’s ROI Calculator.