The essential components of a
successful L&D strategy PART I
February 2019 | Article
The essential components of a successful L&D
strategy
Over the past decade, the global workforce has been
continually evolving because of a number of factors. An increasingly
competitive business landscape, rising complexity, and the digital revolution
are reshaping the mix of employees. Meanwhile, persistent uncertainty, a
multigenerational workforce, and a shorter shelf life for knowledge have placed
a premium on reskilling and upskilling. The shift to a digital, knowledge-based
economy means that a vibrant workforce is more important than ever: research suggests
that a very significant percentage of market capitalization in public companies
is based on intangible assets—skilled employees, exceptional leaders, and knowledge.
Learning and
development—From evolution to revolution
We began in 2014 by
surveying 1,500 executives about capability building. In 2016, we added 120
L&D leaders at 91 organizations to our database, gathering information on
their traditional training strategies and aspirations for future
programs. We also interviewed 15 chief learning officers or L&D heads at major companies.
Historically, the L&D
function has been relatively successful in helping employees build skills and
perform well in their existing roles. The main focus of L&D has been on
upskilling. However, the pace of change continues to accelerate; McKinsey research estimates that as many as 800 million
jobs could be displaced by automation by 2030.
Employee roles are
expected to continue evolving, and a large number of people will need to learn
new skills to remain employable. Unsurprisingly, our research confirmed our
initial hypothesis: corporate learning must undergo revolutionary changes over
the next few years to keep pace with constant technological advances. In
addition to updating training content, companies must increase their focus on
blended-learning solutions, which combine digital learning, fieldwork, and
highly immersive classroom sessions. With the growth of user-friendly
digital-learning platforms, employees will take more ownership of their professional
development, logging in to take courses when the need arises rather than
waiting for a scheduled classroom session.
Such innovations will require companies to
devote more resources to training: our survey revealed that 60 percent of
respondents plan to increase L&D spending over the next few years, and 66
percent want to boost the number of employee-training hours. As they commit
more time and money, companies must ensure that the transformation of the
L&D function proceeds smoothly.
All of these trends have elevated the importance of the
learning-and-development (L&D) function. We undertook several phases of
research to understand trends and current priorities in L&D (see sidebar,
“Learning and development—From evolution to revolution”). Our efforts highlighted
how the L&D function is adapting to meet the changing needs of
organizations, as well as the growing levels of investment in professional
development.
To get the most out of investments in training programs and
curriculum development, L&D leaders must embrace a broader role within the
organization and formulate an ambitious vision for the function. An essential
component of this effort is a comprehensive, coordinated strategy that engages
the organization and encourages collaboration. The ACADEMIES© framework, which
consists of nine dimensions of L&D, can help to strengthen the function and
position it to serve the organization more effectively.
The strategic role of L&D
One of L&D’s primary responsibilities is to manage the
development of people—and to do so in a way that supports other key business
priorities. L&D’s strategic role spans five areas (Exhibit 1).
Exhibit 1 IN THEORIGINAL ARTICLE
1. Attract
and retain talent.
Traditionally,
learning focused solely on improving productivity. Today, learning also
contributes to employability. Over the past several decades, employment has
shifted from staying with the same company for a lifetime to a model where
workers are being retained only as long as they can add value to an enterprise.
Workers are now in charge of their personal and professional growth and
development—one reason that people list “opportunities for learning and
development” among the top criteria for joining an organization. Conversely, a
lack of L&D is one of the key reasons people cite for leaving a company.
2. Develop
people capabilities.
Human
capital requires ongoing investments in L&D to retain its value. When
knowledge becomes outdated or forgotten—a more rapid occurrence today—the value
of human capital declines and needs to be supplemented by new learning and
relevant work experiences.3 Companies that make investments in
the next generation of leaders are seeing an impressive return. Research
indicates that companies in the top quartile of leadership outperform other
organizations by nearly two times on earnings before interest, taxes,
depreciation, and amortization (EBITDA). Moreover, companies that invest in
developing leaders during significant transformations are 2.4 times more likely to hit their
performance targets.
3. Create
a values-based Culture.
As
the workforce in many companies becomes increasingly virtual and globally
dispersed, L&D can help to build a values-based culture and a sense of
community. In particular, millennials are particularly interested in working
for values-based, sustainable enterprises that contribute to the welfare of
society.
4. Build
an employer brand.
An
organization’s brand is one of its most important assets and conveys a great
deal about the company’s success in the market, financial strengths, position
in the industry, and products and services. Investments in L&D can help to
enhance company’s brand and boost its reputation as an “employer of choice.” As
large segments of the workforce prepare to retire, employers must work harder
to compete for a shrinking talent pool. To do so, they must communicate their
brand strength explicitly through an employer value proposition.
5. Motivate
and engage employees.
The
most important way to engage employees is to provide them with opportunities to
learn and develop new competencies. Research suggests that lifelong learning
contributes to happiness. When highly engaged employees are challenged and
given the skills to grow and develop within their chosen career path, they are
more likely to be energized by new opportunities at work and satisfied with
their current organization.
CONTINUES
IN PART II
By
Jacqueline Brassey, Lisa Christensen, and Nick van Dam
https://www.mckinsey.com/business-functions/organization/our-insights/the-essential-components-of-a-successful-l-and-d-strategy?cid=other-eml-alt-mip-mck&hlkid=609edfa945254ceeac7a25092f5ce385&hctky=1627601&hdpid=4a586936-e25d-452d-83b4-969eb0daa091
CONTINUES
IN PART II
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