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Your Training Department – What Your CEO Really Thinks

Submitted by  on January 7th, 2011

Jack Phillips is well known for his Learning ROI methodology. His ROI approach adds a fifth level to Donald Kirkpatrick’s famous Four Level training evaluation model. With it, he applies the traditional return on investment financial measure to training programs. Jack, along with Patricia Phillips from their ROI Institute, sought to find out what the top executive in organizations thought about their training investments. Considering the difficulty in getting the views of time poor CEOs, their survey results mark a considerable achievement in tapping into the views of the top decision makers in organizations.

The survey targeted 410 publicly listed Fortune 500 companies and 50 of the top privately owned companies. In all, 96 CEOs responded. The results set a direction for where learning managers need to focus their efforts and are of particular interest to anyone involved in workplace training.

In the survey, CEOs were asked for their most significant rationale for setting learning investment levels. Here is how they set their learning budgets:

39% use benchmarking data
20% invest only the minimum necessary
18% invest when they see value
10% invest in all learning and development needs
4% try to avoid learning investments

That one quarter of CEOs see learning expenditures solely as an expense to be avoided sends a stark message to all learning managers that they still have a way to go before being fully regarded as a strategic partner in the business. Equally telling is the news that more than twice as many CEOs use benchmarking comparisons with other organizations to set learning expenditure levels compared with those that base expenditure amounts on their assessment of the value the proposed training. There is more work to be done in promoting tools and methods that evaluate the true impact of learning as opposed to following the crowd.

CEOs were asked for their level of involvement in their organization’s learning programs. As reported by them, their involvement is:

78% personally approve learning and development budget
73% review requests for major programs
72% review results of major programs
34% use learning scorecard to monitor progress
29% open and close major programs
22% host or conduct periodic review meetings
18% actually teach segments of major programs

Some three quarters of all CEOs involve themselves in executive decision-making and review of learning investments. The question remains open as to what the other one quarter are doing in leaving decisions about organizational capability to lower level managers. We can only surmise that these are the same one quarter of the CEO population that seek to avoid training expenditures unless absolutely necessary.

Less than one third of all CEOs get actively involved in the delivery of major programs. This is disappointing news, as the success of major training initiatives depends on the visibility of executive support. Here is an area where learning managers clearly need to do better in future. Learning managers need to think of new and effective strategies for getting their CEO actively involved in their most important training programs.

How do CEOs rate the importance of their learning function? Not very, it seems. The survey reports that Chief Learning Officers on average are situated three levels down from the CEO in the organization’s hierarchy. And how do they rate for their ability to deliver value to the organization? On a four point scale (1 = very dissatisfied; 4 = very satisfied), CEOs rated their level of satisfaction with their learning and development department as 2.52. Overall, that’s not quite satisfied. Learning managers still have a way to go in earning the respect of the top decision maker.

In my next post on Training, I will review how CEOs rate the learning metrics used in their organization. Stay tuned.


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