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Discover the secret to effectively managing your Learning & Development budget! This guest post by Marco Mullers highlights how L&D professionals face the challenge of prioritizing initiatives, which may be overcome by considering the growth impact (G) and uniqueness (U) of each learning need, hence calculating the Learning Priority (LP). Prioritization is the key to successful L&D management.
Author: Marco Mullers – Vice President, Learning and Development at DSM
Slicing your L&D budget pie… Solved?
Organizations are challenged with effectively managing their learning and development (L&D) budgets. As the head of Learning & Development, you are likely responsible for making or influencing these decisions. A primary difficulty in this process is determining which initiatives should take priority. It is comparable to picking a favorite child, as everything may seem important, and each department head will likely argue why their own learning needs are most important. Your role is to discern which investments are genuinely vital for the overall success of the organization.
As head of Learning & Development, you possess a unique vantage point. You have a deep understanding of both the organization’s strategic objectives and the diverse learning needs of employees. The only simple step that remains, is to convince your stakeholders about the reasoning behind the size of the pie.
What is the learning priority?
The priority of a learning need is not a standalone attribute. Priority is a calculation that is derived from other factors. It can help if you think of a learning need like a risk mitigation of a problem. In risk management, the priority of a risk is often made up of the severity (the potential consequences or negative impact of a risk if it materializes) and the likelihood (the probability of the risk occurring). The priority of a risk can be calculated by multiplying severity and likelihood. How do you determine the priority of a learning need? It depends on your factors.
I like to think of two factors when assessing a learning portfolio or a new learning need.
1. “Will this help the organization grow?” (G)
This may seem like an obvious question, and initially, you might assume that every learning offering contributes to the organization’s growth. Possibly. But by how much? Does training on “Using Excel Pivot Tables” promote growth? What about safety training or the code of business ethics? While these are often crucial for maintaining organizational health, staying within legal boundaries, or assisting employees with daily tasks, they might not directly foster company growth.
Does this mean operational training are not a priority? That’s too soon to tell. So far, we have only considered one attribute that factors into the priority equation.
2. “Is the learning need truly unique for the organization?” (U)
The other attribute is more challenging to address, or more precisely, harder to accept. Determining whether a learning need is genuinely unique to your organization involves answering a simple question: could you use the learning offer in another company?
The psychology of this is more complex, as it means we need to acknowledge that our problems may not be unique. Is your organization’s approach to change management truly different from that of other organizations? What about your project management methods? Are you using something unique, or do you use Agile, Scrum or Waterfall, perhaps with some slight alterations in terminology?
Let’s make it more difficult: How about leadership development? How much of your program is genuinely exclusive to your organization? You may find that the elements in the program that cover values, or the company vision are unique, while many other elements are not.
Accepting that not everything we need is unique makes you vulnerable and takes courage!
Determining the priority
Once you have determined the Growth-impact (G) and the Uniqueness (U), you can calculate the Learning Priority (LP) using a straightforward formula:
LP = G * U
It is helpful to plot these two factors on two axis, and visualize this in a matrix.
Plotting the two axis on the priority matrix, with some examples per quadrant
Where it helps you
Now, you can plot both existing offerings and new learning needs in the matrix. Even better, you can begin treating them differently depending on the situation of your organization. If something is in the top half, it might be worth investing, whereas the bottom half should likely be executed at a lowest cost. The items on the left should be procured without significant (or any?) customization, while those on the right should be developed, or at least be a custom element you incorporate into a learning path of an item on the left. An example of how you implement this could look like this:
Depending on where items are plotted on the graph, you can start treating them differently
For example, you might want to buy your leadership development program off the shelf, and then insert your company values as a module in there. Maintain 90% of the standard content, and only adjust the 10% that truly makes it unique to your organization.
Consider plotting your existing portfolio and the allocated budget, and assess whether you have been spending right chunk of your budget in each quadrant?
Another interesting application of this model is utilizing it during dialogues about learning needs. More than once I have used (and even shown) this model when discussing a learning need with a stakeholder, to help them understand that we really don’t need to build their program from scratch or should invest less money in a particular topic.
Limitations and risks
Unsurprisingly, using this matrix does not solve every problem, and it should be applied with caution. For instance, if people in your company are struggling with workload, a learning intervention about time management or building resilience might be strategic and considered a “growth” topic or at least critical for enabling growth. It would be foolish to blindly keep pushing down the investment.
Another consideration is the balance between investment of time and money. You might not want to spend a lot of money to build a learning offering on change management, but that does not mean you should not invest in training employees on it, even if it incurs costs. One way to plot this on the matrix is by not just considering the location on the matrix, but by experimenting with bubble sizes, as shown in this example graph below. In this graph the number indicates the money investment, whereas the bubble size indicates the time investment in training delivery.
Example of priority matrix with some plotted learning offerings or needs
Effectively managing your L&D budget is essential for your organization’s growth and success. Using a priority matrix like this can aid in determining your learning strategy. Whether you utilize this specific approach or use different axis or variables, conscious decisions are key.
How do you approach prioritization? I would love to hear your thoughts and insights on this crucial aspect of learning and development management.
Happy plotting, and good luck dividing the pie!
ABOUT THE AUTHOR:
Marco Mullers is a seasoned professional with over 20 years of experience in shaping vision, driving innovation, and leading disruptive transformation in business and corporate environments. He thrives on developing, activating, inspiring, and influencing people to drive impactful change in challenging global settings. Currently serving as Vice President of Learning and Development at DSM, Marco brings his expertise to the forefront. Prior to that, he spent 14 years at Philips as the Global Head of Learning Development & Delivery. Marco’s extensive background and achievements make him a valuable asset in driving organizational growth and success.
Written by: Eva Mezosi
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