How Do You Choose the Right Metric to Measure Learning ROI?

When learning professionals try to measure learning ROI, there seems to be a sticking point. There is one question that trips them up: What is the right metric to measure?

Too many learning professionals believe (falsely) that you should measure strategic metrics.

What are strategic metrics?

These include retention rates, employee satisfaction, customer satisfaction, cost of goods sold, and profit. These measures are influenced by many factors. To measure accurately, you would need to spend too much time and money trying to isolate the impact of each factor.

When you’re done, the results would be an educated guess, at best. This compares to isolating how much one bean in your chili contributed to the taste!

The better choice, and the process we teach in the ROI by Design® model, is using operational metrics.

What are operational metrics?

Operational metrics typically measure how well people perform a task or how well a process works.

In a fictional business, let’s say employees produce X number of widgets in Y number of hours. An operational metric might measure average widgets produced per hour.

Conversely, a strategic metric might measure widget profit. That calculation requires knowing the number of widgets produced per hour, cost of raw materials, wages paid to the widget makers, operation and overhead costs of the manufacturing facility, and so on.

Why should learning programs measure operational metrics?

Learning improves knowledge, skills, attitudes, or a combination of the three.

Improving a knowledge, skill, or attitude changes behavior because the improvement leads to greater competency and better performance.

Behavior change directly impacts operational metrics. A metric that measures behavior creates a direct tie to training.

Why should this be an easy change for learning professionals to make?

Operational metrics (also known as business unit metrics) are already being used by business to determine the health of an organization. In fact, they are often the tool the business manager uses to identify the need for training in the first place. The problem is they are just not being communicated to the learning professional or tied to learning program design.

In order to connect learning to a metric you need to identify the behavior needed to improve performance. Then you must identify the metric that measures that performance.

To do that, it helps to ask these two questions (which I mentioned in my previous post The One Secret You Need to Measure Learning ROI):

  • What needs to change?
  • When that change occurs, where will it show up?

By using operational metrics used by the business units, you discover the metrics most directly impacted by behavior.

ROI By Design® teaches you this process

In the ROI by Design® process, you learn how to identify the metric and, at the same time, the behavior needed to improve the metric. When you design learning with the goal to change the behavior that changes the metric you develop a clear cause and effect. This connects your learning program to your metric.

Once you have chosen the metric you want to change, research the behaviors needed to improve the metric. Those behavior changes become the goal of the learning program. If the learning program works, the behavior changes, the metric changes, and the ROI evidence is clear!

Design your programs to change behavior. This provides a transparent way to measure the value of your learning program measured in both behavior changes and metric changes.

Do you need help measuring learning ROI? Contact eParamus and we can teach you how to measure learning ROI.

Please follow eParamus on LinkedIn and feel free to connect with me, Laura Paramoure, PhD. I’d love to know more about your training challenges.