Investment in learning is like any business investment and will either be operational, tactical or strategic.
As a business man, I look at investment in learning in exactly the same was as I look at any business investment. Just as I separate capital investment into operational, tactical and strategic investment, I separate learning investment into operational, tactical and strategic investment. A separation that impacts frequency of use, importance, breadth of knowledge and assessment of ROI.
Here you are considering investment in equipment or training that helps improve efficiency (and to a lesser extent effectiveness) and where it is possible to quantify benefits before or immediately after making the investment. For example, when thinking about purchasing a printer one can balance printer cost (investment) against the number of pages that you print each day, whether colour is needed and the benefit of automatic duplex. An evaluation that means that you can forecast Return on Investment (ROI).
Similarly, operational training is concerned with improving efficiency. An examples learning how to use a new software (such as MS Office 2007). Even if you cannot forecast the saving beforehand, it is reasonably easy to assess the saving after the course. Unfortunately, operational investments have a relatively short life. So a printer may have a life of a few years and learning about MS Office 2007 is likely to become irrelevant when it is replaced by MS Office 2010. It is likely that the best way of providing operational training is using E-learning.
Operational Learning Investment is largely concerned with gaining knowledge.
Here the investment in equipment or learning is to improve effectiveness or minimise risk. For example as soon as Microsoft brings out a new operating system, I purchase a computer running the operating system so that I can check that my software runs on the new operating system. An action that is cheaper than spending the time to installing the new operating system on one of my existing computers and much less expensive than my losses if my software has to be changed to be compatible with the new operating system.
Likewise learning about sales negotiation strategy and behaviours reduces the risk of not winning profitable business. But even if the impact of the learning can be assessed, this may only be after you have used the learning. Also, it may be difficult to separate the impact of the learning from other factors. For example, did you win a negotiated contract because you learnt about negotiation or was it because your product is great, the client is stupid, your business image is good or something else. Because of this, it may be impossible to assess ROI beforehand and difficult to quantify ROI afterwards.
Here the investment in equipment or systems is concerned with the long-term strategic development of the business and strategic learning is concerned with building competencies. Unfortunately, it is difficult perhaps impossible to evaluate financial benefits except in the very long-term where it becomes difficult to assign benefit to a specific investment. For example, in 1997 I registered my Internet Domain - www.simulations.co.uk and built a website. I did this at a time when it was impossible to anticipate the impact of the Internet on the world let alone on my business. Also, assessing the impact of this investment afterwards was virtually impossible as my success is not wholly due to having a web presence. It is impacted by my range of simulations, my research into simulation design, my creation of an award winning software platform, my award winning design methodology and substantial, perhaps unique, experience of using simulations with businesses.
Strategic Learning is similar. In the mid 1960's while on a manufacturing management graduate training program with GE, I learnt about finance. Learning that I have used as part of my business decision-making repeatedly over the last forty-five years. It is a key competency but I find impossible to quantify its financial impact. Likewise, I suggest developing business acumen, an understanding of flows of money, materials and information between functions, basic financial knowledge, team working etc. are all competencies with long-term benefits where the benefits are practically impossible to quantify! All are competencies developed and honed by business simulation.
This table from my book SIMULATION: Virtual Business Experience summarises the different levels of learning investment.
|Frequency of Use||Continuous||Occasionally||Infrequent|
|Importance of Work||Minor||Needed||Vital|
|Breadth of Knowledge||Narrow||Wide||Very Wide|
|Assessment of ROI||Easy||Difficult||Very Difficult|
Most recent update: 01/01/15
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