Improvement or optimisation?

Does investing in training deliver a return on investment to your organisation?

Training return on investment or not?

As with most questions like this, there are many schools of thought. The first difference is between those who promote measuring training return on investment and others who argue that trying to measure it is pointless.

The mainstream view holds that measurement can help evaluate some kind of return on investment (RoI), although factions argue about the best way to achieve this. Another perspective accepts that, while evaluating RoI may be training’s holy grail, trying to measure it may be pointless. According to Personnel Today, they argue that trying to measure RoI on learning is not cost-efficient, the formulae aren’t robust and most organisations are not even interested in the topic.
Possibly the best-known mainstream approach to training evaluation is Kirkpatrick’s four levels. Essentially the levels are a sequence of levels of evaluation for training:

1. Reaction – participants views often recorded on simple multi-choice questionnaires (often referred to as “smile sheets” or “happy sheets”) – usually at the end of a course or session.
2. Learning – the increase in knowledge, skills, or competence. This is usually assessed during the course, either in practical work or tests.
3. Behaviour – how well delegates transfer learning to their work. This stage seeks to assess changes in behaviour due to training. It may form part of a wider culture change initiative. This usually happens a few months after the training, possibly by interview but more usually some type of observation.
4. Results – the final outcomes from participation in a training program (usually financial, time or performance-based. Particular industries might focus on specifics such as safety for example)
Some practitioners find it difficult to move beyond Levels 1 and 2 when the most valuable information might exist at the later levels. Kirkpatrick-certified consultants “start with the end in mind,” moving back from Level 4 to start with the desired results before designing and developing the programme.

JJ Phillips proposed the addition of a fifth level, to measure RoI which is achieved by putting a value on the achievements that are found at the fourth level and comparing them to the total cost incurred in providing the training.

A provider’s view

From our point of view, as training providers, those in the second school of thought who think measuring RoI is pointless, might only be interested in how well a training course is received by the trainees, so evaluation will typically be based on questionnaires that ascertain the delegates’ perceptions. The mainstream group, however, may ask a training provider to demonstrate a return by using metrics and formulae that they approve of, and these might be different for each organisation, which is a bigger challenge.

Which school of thought is right?

The answer is probably that both viewpoints are valid to some extent and a more specific answer will depend on a combination of factors that are unique to your organisation; however, let’s consider some of the evidence that is available.
An important issue must be the quality of any training. With mandatory and vocational courses, the content and syllabus will be well established, so any questions of quality will tend to be focused on the method of delivery. Management training is different, however. The delivery is still important, but several authors have argued that the content of management training is influenced by fads, fashions and theories peddled by management gurus that aren’t supported by any evidence that they work. Even top business schools such as Stanford and Harvard have been criticised for teaching pseudo-scientific management models.

Investing in existing talent is a strategic issue for organisations, according to research by the University of Portsmouth on behalf of the Chartered Institute of Personnel and Development. Their report explores both qualitative and quantitative metrics and introduces the idea of moving from measures of return on investment to return on expectation, which could be difficult to define.

The Oxford Handbook of Evidence-Based Management contains a simpler example of how the return on investment of a bank’s leadership development programme was measured. Half of the sample of managers were randomly assigned to receive the leadership development and the remainder was left as a control group with no training. The people who worked for the managers were surveyed and the results showed increases in the charisma, intellectual stimulation and consideration of the managers who were trained compared to those who weren’t.

As suggested at the beginning the answer to whether investing in existing talent improves skills and loyalty is not straightforward, but it becomes clearer by using an evidence-based approach.


This is an update of an article that appeared in the New Statesman magazine in 2014.


Improvement or optimisation?

LinkedIn and Bad Science

Bad Science

I’m more aware of bad science than ever since reading Ben Goldacre’s book of the same name a few years ago. Familiarity bias and proximity bias no doubt!.  So, another day, and another LinkedIn post from a well-meaning consultant using “science” to support their argument. This post links to a YouTube video about business leadership.  It makes a perfectly reasonable point about how much interconnectedness there is in the world. The author could support their argument using ideas from Systems Thinking, for example.  However, they invoke, and then mangle, the idea of entanglement from quantum mechanics; a favourite subject for purveyors of woo.

Quantum confusion

Entanglement states that the way sub-atomic particles interact means their quantum state cannot be described independently regardless of physical location. In other words, a change in the spin of one entangled particle will be replicated in the other no matter how many light years separate them.    Now, this might be OK if the entanglement of quantum theory was limited to an analogy, but we are urged to believe that this long-distance connection between sub-atomic particles explains some mystical connection between all humans.  Why? Well, according to the author it is because, of course, we are all made of atoms!

Logically, this is the equivalent of stating that humans must be born from clouds because we mostly consist of water and, you guessed it, water comes from clouds too!

Scientific method

The principles of the scientific method are to test hypotheses to find out if they stand up.  The assumption is that most hypotheses will be replaced by better ones as we learn more. Sometimes they withstand testing and experiment sufficiently well to become a theory that provides a robust explanation of something significant.  A good example is the theory of evolution.  Non-Scientists often misunderstand the meaning of the word theory in a scientific context.  The misunderstanding is given away by statements such as: “Evolution? It’s only a theory”.

Free speech is important so, by all means, everyone should be free to post any idea that crosses their mind.   However, if you don’t understand the science you want to cite, please remember the quote from Chris Morris’s excellent “Brass Eye” TV series: “…there’s no evidence for it, but it’s a scientific fact”.  At least then we’d know you were only joking even if you are unaware yourself.

 

Commission on the Future of Management and Leadership

The Commission on the Future of Management and Leadership

 

Background

The UK Commission on the Future of Management and Leadership was set up by the All-Party Parliamentary Group on management in conjunction with the Chartered Management Institute (CMI). The creation of a parliamentary commission indicates that the UK government believe that high-quality management and leadership in the private and public sectors are important for the future prosperity of the country.

Today they publish their report: “MANAGEMENT 2020: Leadership For Long-Term Growth” which provides the basis for a new campaign for a Better Managed Britain, which Cambridge Management Sciences are happy to support and promote.

Open letter

The Commission has published an open letter to the press expressing their support for the CMI campaign for a Better Managed Britain:

“Dear Sirs
Over recent months, the need to rebuild trust in business and public services has been widely discussed. But a core debate which too often gets overlooked is the quality of UK’s leadership and management.
Are UK’s managers short-sighted and too focused on the near-term, or long-term, growth visionaries? As the Commission on the Future of Management and Leadership makes clear, we are at a tipping point.
We need to raise our sights to a longer-term global agenda.
Those who cut costs and overheads seem to earn more respect for such hard-nosed decisions than those who take the riskier, more innovative paths that lead to growth in revenue, jobs and profits. This approach infects the public sector and social enterprises too when financial targets are put before service delivery and creating social value.
Whilst cost and profit are important we need management to create value for all stakeholders: shareholders, society and staff alike. Our future prosperity and global competitiveness depend on this. So today, we are supporting the launch of CMI’s campaign for a Better Managed Britain.
For a Better Managed Britain, organisations need to focus on three critical areas: Purpose, People, and
Potential.
Boards must refocus on their organisation’s longer-term purpose, beyond just making money or meeting targets – and to set measurable commitments to customers, suppliers, employees, communities, and the environment, as well as to investors.
We need managers who inspire and support their teams to succeed. Managers who are recruited not only
because of technical skills but because they have the right attitudes, values and ethics. Managers who are assessed and paid not only on their results but on how they got them.
We need to focus on the long-term over the urgent distractions of the short-term. We must build for the future,
by supporting our education system through providing access to the world of work, by training, mentoring and nurturing new managers and leaders.
Today we are calling on those responsible for leading businesses, public services and third sector enterprises
to start with an honest self-appraisal of their Purpose, People and Potential, identify where they could make improvements, and take action to do so.
Together we will create a better Managed Britain with long-term sustainable growth for the benefit of all.

<Ends>

Steve McGrady, Managing Director of Cambridge Management Sciences (CBMSc), and a Fellow of the Chartered Management Institute is a co-signatory of the open letter.  “I am pleased to be able to demonstrate our support for this campaign”, said Mr McGrady, “it is important to highlight that organisations should focus on their long-term commitments to all stakeholders and move away from over-emphasising cutting costs to increase profits and shareholder returns.”  CBMSc provide training and consultancy to help organisations increase their effectiveness and efficiency through the application of evidence-based methods and tools.

Board room table

Corporate governance reform needed

Corporate governance has been reformed and improved, but recent evidence suggests there is more still  to do.

Financial Services

As Standard Chartered Bank and HSBC join Barclays in the rogues gallery of banks that have suffered severe failures of corporate governance, the reputation of commercial banks can, surely, only be recovered through fundamental reform of corporate governance rules, and the associated regulatory bodies for the financial services industry.

Other industries

Today’s revelation that Oracle Software will pay $2m (£1.27m) to settle federal civil charges of failing to prevent secret payments in its Indian sales operation and the recent fiasco here in the UK surrounding the inability of G4S to fulfil its contractual obligations to give security for the Olympic Games suggests that corporate governance issues extend to businesses in other industries beyond financial services.

Corporate governance regulation and culture

There have been number of actions in recent years that should have improved things. In the UK, for example, there have been changes to the regulatory bodies responsible for financial services, but the evidence suggests that there are too many cases of the FSA having to ‘cure’ problems and not having prevented the problems in the first place.
Our consulting experience tells us that, in many cases of systems failure, the cause can be attributed to lack of commitment of people to, in this case, the regulatory regime and, therefore, the principles underpinning it.
Cleaning up the behaviour of people inside businesses requires significant change to the culture of many corporations. The culture is informed by the values which, in young, small firms are set by the founder and in large, more mature corporations are set by the Board. In both cases, the existence of a culture that allows, or in extreme cases, condones bad practice is a failure of leadership.
Reinforcement of the standards expected by society can be addressed, at least partly, by fines and regulation. In this case, the failure of regulation could also be a failure of leadership which, in this case, means political leadership. However, as the financial and political strength of corporations grows alongside their international reach, political failings aren’t always attributable to political leaders. In many countries the ability of national regulation to control global businesses is severely limited.  This is often due to the relative political and economic weakness of small nation states relative to large, global corporations.
If we take banking as a defined segment of the financial services market, it might be time for national governments to recognise that co-operation towards a unified international corporate governance framework of principles, regulation and enforcement backed up by co-ordinated action from national governments is overdue.

Lazy Management development

Lazy Management development

Body language is often included as part of management development programmes.  It’s easy to see why.  Telling people that crossed arms indicate resistance to what you are saying seem reasonable based on ‘common sense’.  However, as with many favourite topics on training courses, the evidence to support a lot of this stuff is either flimsy or non-existent.

The problem for management development

An excellent April 2013 New Scientist article “Lost in translation: Body language myths and reality“, by Caroline Williams, highlights a number of myths about “reading” body language.  Sadly, many of these myths are presented as ‘facts’ in management training and development programmes.  The giveaway is that they are presented with no evidence to support them. This lazy repetition of assertions that make the trainer sound insightful or that are simply attractive sound bites is bad practice and could cause damage by perpetuating myths that are either untrue or,at best, half-truths.

An example

For example, how many trainers involved in management development will admit to repeating one of the canards cited in the article rather than checking the evidence first.  Maybe you have heard it or used it yourself.  The assertion is that 93 per cent of our communication is non-verbal, and only 7 per cent is based on what we actually say. This figure came from research conducted over 40 years ago by Albert Mehrabian, a social psychologist at the University of California, Los Angeles. He found that if the unspoken message conveyed by tone of voice and facial expression differed from the word being used (for example, saying the word “brute” in a positive tone and with a smile), people tended to believe the non-verbal cues over the word itself. From these experiments Mehrabian calculated that perhaps only 7 per cent of the emotional message comes from the words we use, with 38 per cent coming from tone of voice, and 55 per cent from other non-verbal cues.

The source of the myth

The article explains that Mehrabian has spent much of his time in the past forty years explaining that he never meant this formula to be generalised, and that it only applies to very specific circumstances — when someone is talking about their likes and dislikes. Mehrabian claims that “unless a communicator is talking about their feelings or attitudes, these equations are not applicable” and so the oldest stat in the body language book isn’t quite what it seems. As Williams points out, if we really can understand 93 per cent of what people mean without using words, we don’t need to learn foreign languages and we would never get away with telling a lie.

Needless to say, we believe this is another reason to support the value of evidence-based training as part of management development.