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You Say Quantitative—I Say Qualitative: Whose Training ROI is This Anyway?

In a previous blog post, Educating and Challenging Stakeholders on Instructional Design Best Practices, I suggested that certain qualities that make an effective salesperson can also help learning strategists and instructional designers influence decision makers to embrace learning and development trends, tools, and best practices. Several of these qualities focused on a learning strategist’s comfort level when discussing the relationship of best practices and the financial implications of learning and development projects.

The most common term used to reference financial and business drivers is Return on Investment or ROI.  When I look back to my earlier days as a learning strategist, I now know that I overused ROI in my consultations with customers and prospects. At the time, I had but a superficial grasp of what ROI meant and I applied the concept the same way no matter who I was talking to. This resulted in several admonishments by stakeholders that I was oversimplifying and adding ‘soft dollars’ to the potential benefits of the training I was proposing.

The purpose of this post is to suggest that ROI can mean different things to different people. If you want to better articulate the potential business impact (ROI) of implementing instructional design (ID)  best practices or new development tools, you should be ready to adjust your message depending on your audience.

What do Stakeholders want? It depends.

First, it’s a given that learning projects should be aligned with business objectives. It’s as critical as focusing on performance objectives and not just reorganizing content in e-learning designs. How one measures true effectiveness of learning programs may not always be fully appreciated by ID managers or even a CLO. On the other hand, it’s possible that they too want highly engaging and interactive Level 3 learning, but are stymied by their ability to communicate the potential return from those best practices. To better understand this challenge, let’s look at what ROI means, in very general terms, to various roles that have a stake in e-learning projects.


CEO – President – CFO

Ok, I admit that most of us may never present to, or even meet a C-level executive of a Fortune 500 company. But your CLO does live in the C-Suite and you or your manager may already have the ear of the CLO.

At the C-Level, it’s all about increasing shareholder value. The focus is on quarterly revenue and earnings (Balance Sheet, Income Statement, P&L). Most importantly, they are first and foremost focused on ‘hard dollar’ (tangible) ROI. This includes stuff that can be soundly measured like reduced trainer costs, travel costs, and seat time. Hard dollars are also related to increased revenue and customer satisfaction that can be directly attributed to training dollars spent. It’s about quantitative, not qualitative measurement. To a CFO, quality must be quantifiable.

When it comes to an ID’s role, C-suite executives want development costs lowered. They won’t care about action-based interactivity or an agile-like development process like SAM or the latest and greatest development tool unless it is demonstrated that increased spending on ‘speculative innovations’ like these will increase the hard dollars returned.

There are many less tangible, soft dollar returns that concern C-level executives including the company’s leadership supply chain and leveraging mobile learning opportunities. To fund programs for these initiatives, measureable input must be provided by CLOs and mid-level management. If a CLO can demonstrate that investing another $100K in compliance training will actually reduce quantifiable materials costs, accidents, and industry fines, it has a much better chance of being approved in a ‘check the box’ compliance training environment.

CLOs and Organizational Executives

Naturally, the primary concern of a CLO is to meet performance and ROI targets as defined by leadership. That means they first think in terms of hard dollar quantifiable returns. They are challenged with training large numbers of people, populating new learning management  systems (LMSs), and getting training developed regardless of proper alignment with true performance improvement. For many executives at this level it’s a focus on reducing training expenses, increasing LMS ROI, and decreasing training time.  

On the other hand, the CLO can be your best friend for bottom-up innovation and training budget increases. They are responsible for linking learning to business objectives so they do consider, but are not driven by, qualitative ROI. CLOs more directly consider intangibles and harder-to-measure results like leadership development, employee engagement, and ensuring a continuous learning environment. They increasingly demand training improvements with LMSs and development tools that can assess and report real learning results and performance improvement. CLOs will be receptive to, and promote, interactive and immersive learning environments if the result will be hard dollar returns.

Learning Strategists and Managers of Learning Development

So where does that leave IDs and ID managers? Development objectives, budgets, and timelines are often determined without ID input. Decisions are made and virtually the only way that such objectives can be met is to produce as many low level passive solutions (Level 1 and 2) as possible with the time and budget allowed. Nothing changes in this model and training remains mundane and often ineffective. Leadership development suffers and regulatory compliance programs continue to be ‘check the box’ level training.

But consider another perspective. For most IDs and ID managers, it is second nature to target the hard dollar returns that CLOs and C-level executives demand for capital investment and budgeting. We know that highly engaging and interactive Level 3 solutions can reduce training costs while advancing speed-to-proficiency and performance improvement. We understand many hard dollar challenges.

But we want to achieve so much more. We want to:
  • Convince our managers and CLOs to consider and adopt new perspectives and best practices. 
  • Invest in tools and methods that serve to engage our learners in interactive environments that generate true Level 3 results. 
  • Create learning environments that place the learners in real-world contexts and provide challenges that immediately transfer to the work environment. 
  • Motivate learners to complete training enthusiastically and practice until memory of process and problem solving is second nature.
  • Measure actual performance results, learning comprehension, and decision-making skills required of new leaders.
  • Apply appropriate methodologies and tools to achieve these goals and achieve hard dollar results.
Unfortunately, we know that although these goals will contribute to bottom line results and ROI, it’s hard to overcome the perception that additional investment is a risk and doesn’t meet the ROI requirements set by the CFO.

So What Can IDs and ID Managers Do?

First, if you are in a position to influence decisions about training objectives, best practices, tools, budgets and timelines, think like a CFO and CLO. Be able to talk the language of ROI and address hard dollar ROI requirements. Make them believe that you get it and that you understand what they want. After all, everyone in the chain of command is pursuing similar goals. Executives want to increase shareholder value through performance and cost containment. They have a fiduciary responsibility to do so. Instructional designers want to increase the performance of employees in the most cost effective and instructionally effective way. You may recognize some of the bullet points above are derived from the Serious eLearning Manifesto, which for many expresses an ID’s responsibility to learners and the enterprise. The perspectives are not that different and the goals are virtually the same.   

Next, challenge your management to consider the contribution of soft dollar qualitative results. Very often, decision makers will want the hard dollar ROI separated from the soft dollar qualitative return that is less tangible to them and more difficult to measure. Instead of leaving that list out there as a wish list, work hard to tie your proposals for budgets, timelines, and more interactive Level 3 training to metrics that connect to hard dollar ROI performance and added ROI. This also suggests that IDs encourage management to allocate more budget for measurement of training outcomes and business impact resulting from that training. Doing the right training right and measuring its effectiveness always beats doing the wrong training right and assuming results will follow.

I invite your comments and any observations or expertise that that you can offer. We expect to continue this discussion with more specific methods to align budget and design conversations to ROI in future blog posts. Meanwhile, if you haven’t already done so, access the AutoNation and Essilor case studies on ROI here.

Want to share this post? Here are some ready made tweets:

Click to Tweet: Knowing how to communicate ROI to leaders in your company is key to a successful #elearning program. Learn more:

Click to Tweet: What do stakeholders want? Find out the key to communicating #ROI of #eLearning that create real performance change.

Click to Tweet: The ROI of e-Learning Explained! Check out this blog post to help get your stakeholders on board! #elearningsuccess

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About Author

Gerald Matykowski
Gerald Matykowski

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