Financial Times IE Business School Corporate Learning Alliance

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1 Corporate Learning Financial Times IE Business School Corporate Learning Alliance A study into European senior management attitudes on corporate learning May 2016

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3 3 Corporate Learning Pulse Introduction Senior executives and HR leaders around the world increasingly see their employees as the key to strategy implementation and we believe learning can be a tool to empower employees to make this possible. It is this belief that inspired the creation of the Corporate Learning Alliance in December 2014 as a joint venture between the Financial Times and IE Business School. Corporate learning is more important than ever: it has the power to transform organisations. But how can learning and development professionals unlock its full potential and help organisations integrate executive education into their strategy development and execution? We set out to answer this question in the first quarter of 2016 by commissioning an independent survey of 600 business leaders from across Europe, drawn from France, Germany, the Netherlands, the Nordic countries, Spain and the United Kingdom. We surveyed C-suite executives, HR and learning and development leaders and senior managers at small, medium and large organisations who have led or participated in corporate learning programmes in the past five years. We are pleased to present the inaugural Corporate Learning Pulse with findings from our research. We hope it will spark a conversation about how your organisation can reach its strategic goals through learning. VanDyck Silveira CEO Financial Times IE Business School Corporate Learning Alliance

4 4 Corporate Learning Pulse The Corporate Learning Pulse Our research finds that a majority of the senior professionals surveyed believe that investing in employees drives organisational change and innovation (59 percent), with a similar proportion saying that an investment in executive education will yield positive outcomes for their organisation (57 percent). These findings are strong signifiers for the need of corporate learning programmes that are fit for purpose. That is, programmes that are dynamic, bespoke and, most importantly, aligned with and support broader business functions (as further data from our research will show). 57% See corporate learning as the top investment an organisation can make to improve its business outcomes Investing in the development of executives is more important than hiring new talent when it comes to driving change, stimulating innovation and improving corporate financial prospects The belief in employees as the change agents for innovation is strongest among senior professionals working in Spain, the UK and Germany. Furthermore, Spanish professionals feel most strongly that corporate learning programmes achieve the desired results for their organisation. Regardless of a respondent s level within an organisation, from senior managers upwards, belief in the power of employees is strong, but it is strongest among those in the C-Suite. As we will see later in this report, the C-Suite s belief in their employees to enact, live and drive change in their organisation aligns with their top learning priorities: strategy, leadership and innovation. The C-Suite value learning (they believe it has had a positive impact and past investments were worth it), but there is a desire for improvement in the programmes in which their companies invest. The C-Suite feels less bullish about putting more money towards learning than the senior professionals who manage the day-to-day operations in their organisations. Interestingly, professionals who are somewhat removed from senior management teams have the strongest belief that an investment in corporate learning can improve outcomes for their organisation. In spite of these strong beliefs among senior professionals, the perceived emphasis on, and investment in, corporate learning falls short relative to other areas of focus. This tension raises an important question for the industry: to what extent have current programmes been aligned with strategy execution and measurable business outcomes?

5 5 Corporate Learning Pulse For the C-Suite, corporate learning is a top priority in Challenges they expect to face in three years focus on innovation, in-market growth, and strategy development and execution. These challenges highlight the need to get it right now to influence the organisation positively in future. The room for error is small. A gap exists between the perceived value and importance of corporate learning and the ability for organisations to make a direct link to the business. Business Priorities 2016 Priorities Biggest challenges in three years Reputation and risk 18% 18% International expansion 20% 21% Organisational change 24% 32% Executive education 24% 23% Financial management 26% 27% Adapting to advances in technology 28% 27% Leadership 29% 25% Managing costs 30% 33% Innovation 32% 27% In market growth 33% 35% Strategy development and execution 36% 33% Our research finds that while more than half (57 percent) of respondents believe senior leaders in their organisation understand the value corporate learning delivers for their business, slightly less than half (47 percent) believe that corporate learning has had a positive impact on their organisation to date. Surprisingly, an equal number (46 percent) say the senior leaders in their organisation believe past investments in executive education have not added value because of an inability to measure fully the success and outcomes of past programmes. When we examine how these beliefs vary by respondents level within their organisation, the data show interesting and insightful variances. For instance, the most senior respondents C-Suite, presidents and managing directors believe that corporate learning has had a positive impact on their organisation and that past investments have been worth it to their organisation. However, these beliefs begin to fall among senior professionals who are more removed from the boardroom and more focused on day-to-day operations within their organisations. While at face value this data might cause one to conclude that senior managers do not see the value in executive education, we would argue the opposite: that senior managers, those in the trenches, are begging for learning programmes that help them deliver value for their organisation. They want programmes that help them achieve their goals and objectives.

6 6 Corporate Learning Pulse Despite some pessimism on the tangible value of corporate learning, senior professionals still claim they want it to drive business outcomes for their organisation and believe there is a need for improvement on how current programmes are designed and delivered. All Respondents 47% C Suite 58% President/MD 58% L&D 47% Director 48% HR Manager 53% 46% 53% 53% 48% 43% 46% 47% 47% 48% 50% 51% 27% Senior Manager 32% 39% 49% Positive impact on organisation Past investment had positive impact Exec ed vital to business goals Our research found that the top corporate learning needs for senior professionals across the UK, France, Germany, Spain, the Nordics and the Netherlands are customer engagement (58 percent), strategy and planning (58 percent), successful innovation (55 percent), leadership (55 percent) and strategy execution (54 percent). However, to date it is clear that these needs are not being fully met: just half (50 percent) of respondents say their current corporate learning programmes are aligned with overall business strategy. These findings cry out for the learning and development delivery sector to ensure that the programmes it creates are fit for purpose and tailored to each organisation. This could help to explain why less than half (47 percent) report they are satisfied with the corporate learning programmes their organisation currently invests in, and why just 43 percent believe executive education has given them necessary skills to do their jobs more effectively.

7 7 Corporate Learning Pulse Strategy and planning 58% 63% Customer engagement 58% 62% Leadership capabilities 55% 53% Successful innovation 55% 60% Strategy execution 54% 58% Senior managers who are most likely to feel the day-to-day impact of corporate learning programmes are the least likely to say learning and development is embedded in their culture or that executive education programmes are aligned with the overall strategy of their company. HR managers are most satisfied with current corporate learning programmes and most likely to say programmes have given them the skills they need to be more effective in their job. This data shines a light on our industry and the importance of making these programmes as beneficial as possible to not only the individual but also the organisation as a whole. We see this as an opportunity to take learning and development programmes to the next level. Despite the best efforts in the past to measure the impact of corporate learning, organisations are still searching for a validated and reliable approach to measure the impact of the programmes they invest in. It is not for a lack of effort that some organisations have failed to link learning to tangible business outcomes. In fact, the majority of respondents from our research say their organisations have tried to measure impact in the past, be it through measuring employee satisfaction and retention (74 percent), employee engagement (73 percent), customer satisfaction (69 percent) or revenue and profit (64 percent). Interestingly, the most senior professionals from our research are most likely to claim their organisations have attempted these types of business analyses in the past, most often focused on customer satisfaction, and revenue and profit. However, while they have tried to measure and link executive education to the business, the data suggests that these efforts have not been entirely successful. When asked how they expect executive education to impact their organisations, the senior professionals we surveyed were less bullish about how they expect that impact to play.

8 8 Corporate Learning Pulse Furthermore, when we weigh this data against responses related to how organisations choose executive education partners, we see the pressure they are under to act conservatively coming to the surface. When asked how they tend to choose their partners, only one in four (27 percent) respondents say their organisation makes its decision based on a provider s ability to measure impact for clients. What is the top choice? Working with partners they have used in the past (41 percent). And in fact, for the C-Suite, presidents and MDs, rankings and reputation are the most important factors they consider when choosing learning partners, which further illustrates the pressure decision makers face from internal stakeholders. In the organisational climate where all budgets and investments are heavily scrutinised, we see the difficulty some organisations have with taking a risk. For many, it is clear that the safe bet is the one they are inclined to take. However, there is hope: the data shows an aspiration for choosing corporate learning partners based on their ability to demonstrate business impact. The reality, however, is that this aspect does not often come into the decision-making process. Expected Outcomes Improved reputation in the market place 31% Increased understanding of company strategy and vision among employees 41% Improved customer engagement and satisfaction 42% Positive impact on revenue and profit 43% Improved employee engagenment score(s) 44% Positive impact on organisational change 47%

9 9 Corporate Learning Pulse What are the conclusions that those who design or lead corporate learning programmes can draw from our inaugural study? First and foremost, we believe our call to action as an industry is to close the gap between the expectations and reality of how corporate learning programmes are currently delivered. Organisations want programmes that lead to real impact and they want us to help them measure and demonstrate that impact to internal stakeholders. To deliver impactful programmes will also, in some cases, require organisations to shift their perceptions of corporate learning: how it can be delivered, what it should focus on, and most importantly, how it fits into strategy development and execution. This calls for dynamic and bespoke programmes. The results from the Corporate Learning Pulse suggest that corporate learning to date has focused too much on basic tools and not enough on how the learnings from programmes translate to strategy delivery and holistically support organisations. This means that programmes will have to satisfy the long-term view and vision of the organisation, while simultaneously supporting senior managers who are tasked with implementing that vision and who are under increasing pressure to demonstrate results quarter to quarter, if not month to month. These nuances are critical to recognise and understand because they have a direct impact on how we go about measuring and demonstrating our value. It is our belief that not only do the programmes we deliver need to be bespoke, but also the measurement approaches and measures we use. Ultimately, proving value not just claiming value will be the key to making an investment in learning a priority among European businesses, and ensuring it is managed as a strategic rather than tactical function. They believe it works, but to invest more and deliver transformative programmes, we need to demonstrate how it works.

10 10 Corporate Learning Pulse Research Approach The data, findings and insights in this report are based on an online survey of more than 600 senior professionals from medium, large and very large organisations from across the UK, France, Germany, Spain, the Nordics (Sweden & Norway) and the Netherlands. The research was conducted in partnership with Research Now Group, Inc, a global leader in digital data collection to power analytics and insights, and responses were collected between 19 February and 7 March The study reached out to 603 senior professionals and included company owners, CEOs, CFOs, chairmen, presidents / managing directors, chief learning officers, directors, human resource managers, learning and development managers / professionals, and senior managers. Data was collected to track business sector and size of business. The margin of error for the total sample is ±5.0%. Corporate Learning Pulse A European study into senior management attitudes on corporate learning First published May 2016 Financial Times IE Business School Corporate Learning Alliance One Southwark Bridge London SE1 9HL United Kingdom Copyright 2016 Corporate Learning Alliance Limited

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