Corporate learning is a $200+ billion per year business that must be managed as a business to deliver significant, bottom line results to an organization.

In many organizations learning expenditures represent 2–3% or more of pay- roll and even more if the indirect costs of learning are included, such as the value of participants’ time. Managed well, the learning function can become an indispensable, strategic partner with a significant impact on an organization’s goals. Managed poorly, learning will be viewed as a cost with questionable value and little connection to an organization’s goals or success.

Running learning like a business is the only way to realize the full potential of learning and maximize its impact on an organization’s results.

Fortunately, no new concepts are required for success. The application of standard business practices like strategic alignment, development of a business case, creation of a business plan, and disciplined execution will dramatically improve the effectiveness of the function. Likewise, the application of standard economic concepts and analysis can significantly improve efficiency and decision making.

Unfortunately, few in the profession have been trained in these methods, and fewer still have had an opportunity to practice them or learn from others who are using them. Consequently, many lack the knowledge, experience, and confidence to employ these management practices. So, a business-like approach to learning is not the norm, and when one exists, the leader often has come from outside of human resources (HR) and may have an MBA or experience managing a business.

This, then, is the challenge: First, improve the business acumen and management capability of learning professionals who do not have business background or experience. Second, help learning professionals, both from the field and from other disciplines, apply these concepts to the learning function. And third, provide sufficient detail, examples, and templates so that learning managers will have the knowledge, tools, and confidence to actually implement these concepts.

My goal in writing this book is to meet the above challenge and provide the reader with exactly what is needed to manage learning with much greater effectiveness and efficiency. Effectiveness means that the learning budget is focused on the most important learning, the right learning solutions are chosen, and the programs are managed to ensure the expected value is delivered. Efficiency means that the best possible solution has been chosen, opportunities to reduce costs have been explored, and the best possible trade offs have been made.

The bottom line is that learning must be run like a business. Many organizations already dedicate significant resources to learning. If so, they need to be managed well and deliver the greatest possible return. Other organizations currently under-invest in learning, and a convincing business case can be made for greater investment. In either case the key to success is to understand that learning is a business that can benefit from the application of proven business and economic concepts.

There are some today who already manage this way, and we all can continue to learn from them. This book, though, is for those who are not there yet but would like to be. It is for those who want to improve, especially those who want to transform the way they manage. It is also for those who want to improve just a particular aspect of their management or who just want to compare these recommendations to their existing practices.

Theory will be provided where it is important, but the focus will be primarily on the practical. For some topics such as needs analysis, measurement, and evaluation, a large body of literature already exists, so the emphasis will be less on technique per se and more on its role in the management of learning. For other topics like strategic alignment, the business plan for learning, use of net benefit dollars, use of estimates and forecasts, and the economics of learning, little or no literature exists, so the coverage of these subjects will be more expansive.

Every organization is unique, and any implementation has to be tailored to that organization. The primary focus will be on learning functions in for-profit corporations, but many of the recommendations will apply as well to nonprofit organizations and government bodies. It is also the case that some learning functions have a total of one person on staff whereas others have hundreds. Although the recommendations apply to organizations of all sizes, some are easier to implement if there is a staff. Strategies, examples, and templates will be provided for both small and large organizations.

The book is organized into five parts, which follow a logical sequence. Imagine you are a newly appointed chief learning officer (CLO ) or VP of learning. In a nutshell, here is what you need to do:

  1. Learn what your existing resources are (staff and budget), where they
    are deployed, and what they are producing. Know and understand your
  2. Align the organization’s learning to its strategy and goals, focusing on the highest-priority goals.
  3. Choose the right solutions to meet the identified needs. Develop a business case to show the benefits and costs clearly.
  4. Create a business plan for learning with the right strategically aligned learning solutions that have specific, measurable goals. Include an evaluation strategy.
  5. Create a governing body (or bodies) to provide input for and approval of the business plan and use this governing body to help you manage learning throughout the year.
  6. Measure results to ensure value is being delivered and to make improvements.
  7. Implement plans to improve operating efficiencies and reduce costs.
  8. Promote, communicate, and improve.

Part One

Part One serves as the foundation, laying out basic business fundamentals (Chapter 1), the business case for learning at a program level (Chapter 2),
and a discussion of learning expenditures and resources (Chapter 3).

Part Two

Part Two shows how to align learning strategically (Chapter 4), develop a business case for the entire learning function (Chapter 5), and create a business plan for learning (Chapter 6).

Part Three

Part Three deals with the day-to-day operations of the function once you have a business plan in place. It provides the concepts and tools to set up governing bodies (Chapter 7), manage the measurement process (Chapter 8), and execute the business plan with discipline (Chapter 9).

Part Four

Part Four employs some economic concepts like marginal analysis to improve your efficiency and decision making to ensure that the best programs, options (instructor-led, web based, simulation, performance support, blended), and durations (for example, a one-day or five-day program) have been selected and that you can make the best decisions about pricing a course, canceling a class, or revising the plan (Chapters 10 and 11).

Part Five

Finally, Part Five concludes with guidance on organizational structure and funding for the learning function (Chapter 12) and recommendations about how to pull all of this together for a successful transformation (Chapter 13).

Another way to view the organization of the book is by the pyramid below. The bottom three rows represent the foundation necessary to create and support the business plan for learning (middle three rows), which then must be successfully executed (top two rows) to deliver the planned results. Since success requires combining a business approach to learning with L&D expertise, these two factors are placed beneath the pyramid in support of all the activities above them. This visual representation of the content will serve as a process map to be used throughout the book to remind the reader where we are.

As a practitioner, I have wrestled with all the issues faced by those who manage learning. I didn’t always start with the right answer. I made mistakes and learned a lot along the way. My goal is to share these lessons with you. Although every recommendation may not be right for you, all of the recommendations are practical, and I have personally implemented most of them. Since they have worked for me and for others, they may also work for you. The book is intended to be a practical guide, and you will find numerous real-world examples as well as advice, lessons learned, checklists, and templates. Examples from the Caterpillar University experience are also included.

Finally, a few words about terminology. When the word “we” is used throughout the book, it refers to the Caterpillar University staff in the context of practices at Caterpillar Inc. or to the learning profession more generally. The term “learning” will be favored over “training,” so you will see “learning function” rather than “training function” and “VP for learning” rather than “VP for training.” I will leave it to others to draw out the distinctions between learning and training but simply note that in practice they are often used interchangeably. The term “chief learning officer” (CLO ) will be used as well as “VP for learning” to describe the head of the group responsible for learning.

This book is about managing the function, whatever it is called and whatever the title of the person managing it. I will generally refer to it as a function, recognizing that there are many forms and many names, including the traditional learning or training department and the corporate university. The above nine steps are consistent with what a corporate university should do, but in fact some call themselves corporate universities without implementing the above steps, and others do implement these steps (and more) but prefer not to be called a corporate university.