When companies dedicate time and resources to Learning & Development, it pays off—literally. Recent Udemy for Business research in the State of the ROI of Learning Report found a direct connection between company investment in L&D and business outcomes. 55% of high-growth companies (defined as companies enjoying 50–100% revenue growth year over year) had an average of 30–50 learning hours a year per employee, in contrast with lower-growth companies that saw a lower average of 0–30 learning hours a year. Download the full State of ROI of Learning Report here.
There’s definitely a connection between learning and business growth, but how exactly does L&D fuel a high-growth company? Here are four concrete ways to tie learning to business outcomes and revenue growth at your organization.
1. Practice strengths-based management
Learning on the job, especially when it relates to topics employees are already interested in, can lead to revenue growth and other positive financial outcomes. Gallup conducted a study of companies that practice strengths-based management, which has employees take a strengths assessment, incorporates strengths-based developmental coaching, and positions employees to do more of what they like. This study found a clear link between employees who focus on their strengths and business outcomes their companies enjoyed, including a 10–19% increase in sales and a 14–29% increase in profit.
Lissa Minkin, VP of People & Workplace at Tile, is taking a similar approach to learning at Tile. Managers participate in 360 assessments so they can receive feedback from their direct reports, peers, and managers. This approach allows managers to identify the gap between how they perceive themselves and how others perceive them as a leader, both in terms of character qualities and actions. Tile plans to use the results of 360 reviews to identify skill gaps and create learning modules around these topics and themes. The assessment helps managers to identify areas where they’re already strong and where they can continue to build on those strengths.
Once Tile launches the 360 tool here, the People team plans to create a two-tiered program. First, Tile will identify the skill gaps they see in aggregate across all the 360 assessments and create online and offline learning modules around these recurring topics or themes. The second part of the program will involve punctuating learning with individualized coaching. Using the 360 tool, Tile plans to measure the impact by conducting a 360 before a manager has participated in the program and again afterward to see if the gap was closed. See Tile’s VP of People & Workplace on One-Size-Fits-One (Not All) Learning.
2. Tie learning directly to revenue-generating opportunities
Learning programs can also be transformed directly into revenue-generating opportunities. In an article on Inc.com, Darci Weber, VP, Global Learning Services at Xerox, shares her take: “When you skill up a workforce in the area of customer service, this can increase customer satisfaction, which leads to better client retention. When you create an environment that encourages people to grow and take on new opportunities, it improves employee retention. When you run a learning intervention for a salesforce on a particular product, you can measure that increase in sales after the training.”
Sales academies are one way learning can increase revenue growth. These academies go beyond simply training sales reps about the product, and instead take a comprehensive approach to developing the knowledge and skills for different types of sales roles and solutions. For example, the award-winning Vodafone Sales Academy in the United Kingdom offered a series of different training modules focused on key sales skills like account management, business analysis, and presentation skills. Students received constant feedback on their performance and were paired with a mentor for personalized coaching. Sales certification programs like the Vodafone Sales Academy can have a significant impact on overall sales performance.
Similarly, learning programs can decrease ramp-up time for new employees and speed up time to productivity. Appian, a platform-as-a-service startup and one of the hottest IPOs of 2017, created a new engineer onboarding program that combined online courses and junior developers as coaches to teach their new hires key programming skills. This program reduced onboarding time to 2-3 months, enabling Appian’s developer team to focus on bringing software products to market faster. See Building the Business Case for Learning to read more about Appian and other companies’ approach to tying learning to revenue-generating activities.
3. Create “action learning” teams to solve key business challenges
Another way to tie learning to revenue growth is to bring employees from diverse backgrounds together to solve complex business challenges. A case study published in CLO describes how BP created a series of cross-functional business teams comprised of 10–15 employees to innovate new solutions for key business challenges. For example, the Mid-Continent Business in the US realized that its growth targets would require innovative ways of working. BP created a series of “action learning” events to spark innovation and learning.
These “action learning” teams gathered data and worked together to create a business case for their solutions, which they presented to the business unit’s leadership team. By helping employees get involved in long-standing business challenges, BP encouraged a culture of learning and innovation, which could ultimately have a real impact on the business.
ITX, a software development company, includes “the next challenge” in annual employee development plans and runs an annual Challenge Summit for employees to focus on innovating and solving key business challenges together. These Summits have led to new product innovations that have resulted in increased revenue growth.
4. Redesign talent development programs based on a growth mindset
The “growth mindset” (as opposed to the “fixed mindset”) is based on the belief that people have the ability to improve and change themselves over time. Companies can nurture this growth mindset by creating a culture of continuous learning, moving people horizontally to new roles, accepting failure as a necessary part of learning, and giving constructive feedback. Research from Bersin by Deloitte finds that companies that practice a growth mindset are three times more profitable.
Some companies have already redesigned their entire talent management program based on the concept of the growth mindset. For example, a Harvard Business Review article describes Microsoft’s shift to a growth mindset. Microsoft has traditionally identified and nurtured “high potential” employees to prepare them to take on leadership roles, but they’ve supplemented their existing approach with a program called “Talent Talks” where the CEO and senior leadership team meet with heads of each part of the organization to review employees, discuss career paths, and brainstorm ways to build skills and experiences. While this process is time-consuming, it also helps Microsoft identify and nurture “growth mindset” leaders.
Stanford professor Carol Dweck and Microsoft’s Chief People Officer Kathleen Hogan write, “The company is already seeing the benefits in the form of more innovative ideas and products—and employees are developing leadership skills in unexpected places, at every level.” For example, by developing and encouraging leaders to take risks, team members took the chance on a high-risk HoloLens project, a pioneer in holographic computing. Microsoft encouraged these smart risks by rewarding leaders for failing fast, learning quickly, and innovating. The result? New product innovations that drive revenue growth and new market share. Watch this on-demand webinar on how companies are creating a growth mindset.
As the demands of the working world change, companies and employees will continue to need to adapt. Dedicating time and resources to learning and development will benefit individual employees while also contributing to a high-growth culture and real business outcomes.
About Udemy for Business:
Udemy for Business is a learning platform that helps companies stay competitive in today’s rapidly changing workplace by offering fresh, relevant on-demand learning content, curated from the Udemy marketplace. Our mission is to help employees do whatever comes next—whether that’s the next project to do, skill to learn, or role to master. We’d love to partner with you on your employee development needs. Get in touch with us at email@example.com