Are you an L&D professional who happens to work for a business?
Or are you a business leader who is also skilled in L&D?
Each perspective has its benefits. But, if you are launching or restructuring an L&D department, then it will be best to adopt both perspectives.
In either case, of launching or restructuring, there are many ways to set-up an L&D function. This article will serve as a helpful guide as you embark on this project.
Many times companies tackle the building of L&D by buying e-learning content. Then they tend to wait and hope enough people watch said content to justify the initial spend.
Other times, companies will hire a learning professional or two, so as to “check the box” of having an L&D function, and hope the few L&D team members can design, deliver, evaluate, and sustain learning experiences for an entire organization.
There are even times when resource-rich institutions may buy pre-made e-learning content, purchase a learning platform, hire 10 or so learning professionals specializing in everything from design, delivery, evaluation, and analytics, to governance, and hope for training initiatives to have some kind of a positive impact.
In any of these scenarios or the hundreds of variations in between, organizations and leaders skip a few critical components of this transformational work:
- aligning L&D strategy with organizational strategy
- applying organizational development and workforce transformation frameworks
- incorporating basic marketing techniques when launching and sustaining the new or newly-structured department
- and understanding the end-user as they ultimately shape the success of the L&D initiatives
If you are a leader designing or refining your L&D department, then keep in mind that implementing a transformation is an iterative process. You have the option to either design/refine the way L&D works from day one, or you can start with a few targeted pilot programs that let you iterate your way toward your newly designed L&D function as you collect feedback and observe end-users. In the first approach, you will face more noticeable disruptions in exchange for a faster transformation, while in the second approach you ensure a smoother transition steered by user feedback. In either approach, you will want to keep the following 10 components in mind:
These 10 components are how we have structured this guide.
Note that you don’t have to approach each of these components in the order listed. In fact, your specific environment may allow for, or even demand, you to pursue multiple components at the same time or completely skip some components to tackle others first.
Let’s explore each component a bit more!
01 — Gain clarity on your business situation
To best position yourself for success, you’ll want to first have clarity on your business situation, by exploring these five areas: Organization, Competition, People, Product, and Promotion. We will refer to these five areas as OC3P; let’s dive deeper into each area.
Needs and goals of the organization
No learning strategy, regardless of how perfectly structured L&D is, will succeed if it is not aligned with the organizational strategy. After all, the learning org is responsible for the organizational competitive advantage and must deliver on organizational growth to help the company remain competitive.
To get a better understanding of the organization, you might consider exploring these 5 areas:
- What are your company’s performance goals for critical job families?
- What are your company’s growth goals; in terms of market share, products and service offerings, workforce size, etc?
- What are your company’s financial goals, in terms of increasing profitability (by selling more? producing more?) or cost mitigation (by reducing waste? or eliminating certain offerings?)
- What are the company’s core competencies, and what are the capability gaps?
- What are current areas of risk from competitors where the company should upskill or reskill the workforce?
Once you have a decent grasp of the answers to the questions listed above, you will then be able to pare down these organizational needs and goals to arrive at potential learning solutions.
Take an example from when I was Head of L&D at a capital markets company, one of the organizational goals was to double revenue in three years. We took this organizational goal and looked at all the levers we could push and pull to increase revenue (and decrease costs) to ultimately impact profitability!
To decrease costs, Internal Mobility and Retention were identified as two major levers at play.
To increase revenue, we had two categories to explore, each with its own levers:
1. Sales / Marketing levers were
- Cross-selling and Upselling
- New Client and Client Retention
2. Services / Features levers were
- Increasing the number of services and features provided to clients
- Improving service satisfaction levels through speed, accuracy, and user experience
We then bucketed each of these 6 levers into two main categories; Talent and Sales Enablement. Then we added a third bucket, Leadership Development, as none of this would be possible without involving leadership. The three buckets of Talent, Sales Enablement, and Leadership Development, became the three areas that the L&D team set out to tackle by curating and creating behavior-based learning experiences. For the following year, nearly all of the L&D team’s activities aligned to one of the three learning solution focus areas which were each connected to the organizational goal of increasing revenue (and decreasing costs). Paring down organizational objectives to reach learning solutions allowed for two things; a well-articulated learning strategy and total alignment between L&D activities and organizational goals.
While organizational goals shifted, and the company was soon acquired, we were still able to show significant improvement in cross-selling and upselling metrics.
Forces competing with the internal L&D function
Seeing your L&D department as a business and running it like one will further encourage you to identify all the competing sources of learning. While your L&D department does not need to meet all the learning needs of everyone, it is helpful for you to best position your offerings if you have a clear understanding of the competitive landscape, internally and externally.
The various teams and departments in your company may have business goals that translate to learning solutions and those department heads may not necessarily come to you for help with addressing these business goals.
Let's say your marketing department wants to improve the written communication skills of a group of junior team members. The marketing team lead feels that asking the L&D department for help will become a drawn-out process. So, the team lead buys some basic e-learning modules and a few off-the-shelf workshops led by a “Written Communication Skills” expert.
The team lead may not be aware that your internal L&D team has a robust intake process and also provides performance consulting. Leveraging these services could have helped the team lead identify performance outcomes and established performance goals before purchasing any content. Not making the marketing team lead aware of all that L&D offers is a disservice to the team lead and the org!
It is generally fair to understand that you are going to be competing on speed, cost, and quality, on learning experiences, internally and externally. Understanding what you can compete on, and how you want to differentiate yourself, will be important.
Is your environment such that all learning requests have to go through the enterprise learning function? Should they? Do you have the resources to meet all learning needs for all people in the org?
This is something that often comes up as a significant challenge for L&D teams. As Ryan Austin, CEO of Cognota – the first LearnOps platform for L&D, points out:
“We didn’t feel it was fair that other functions—marketing, sales, and engineering—all have their own operating systems, but learning and development are relying on disparate tools and manual processes to get the job done. We streamline processes in a way that’s purpose-built for L&D so they can get the job done efficiently, effectively, and in such a way that they can demonstrate the value of their work back to the overall organization.”
Note that once you identify other suppliers of learning (vendors with contracts already in the org or others trying to enter the org) you want to consider strategic partnerships that will help you expand the footprint of the learning function, as well as help scale meeting the learning needs of the organization. Linkedin Learning, Udemy, Pluralsight, Coursera, and dozens upon dozens of others can help you increase the variety of your content library. Platforms like Cognota’s LearnOps can help with your workflow while the many virtual whiteboard options (Miro, Mural, and many others) can help facilitate workshops. L&D doesn’t have to do everything; leverage the vendors who are already integrated into your organization!
It is a good idea to review Porter’s 5 Forces to get a stronger grasp of the forces at play in the competitive landscape.
The people using your services
You may refer to them as ‘learners’, and some (including myself, at times) may refer to them as ‘customers’ or ‘end-users’. It is important to remember that these are human beings with hopes, feelings, and emotions. These humans are on the receiving end of the learning experiences you ship.
With that said, it is crucial for you to understand who the people you are serving. What are their goals and aspirations? Where, when, and how do they consume learning? What is or isn’t relevant to them?
One of the ways to learn more about the people using your services is by conducting empathy interviews and plotting empathy maps (see Empathy Map framework).
There are many empathy interview templates available online for free. One I have used in the past is from Mindtools - Empathy Mapping.
The goal is to gain a general understanding of the various populations of people in your organization, what they want and need, and what works for them. Knowing how and when your audience like to consume learning or the challenges they currently have with the existing LMS will help you when deciding on delivery mechanisms later.
The products and experiences L&D will ship
As you gain an understanding of the organizational goals, the competitive landscape, and who your audience are, you will also need to start identifying what L&D will do.
Should it serve as a central repository of various content libraries ranging from Linkedin Learning to Udemy to Coursera to Pluralsight?
Should L&D be a content creator or curator?
Or maybe L&D should focus on creating learning experiences and cultivating social learning communities?
Does the workforce need L&D to be entirely virtual and async, live cohort-based learning, or a hybrid?
Starting to form a sense around these questions will help when designing the L&D department later.
Promoting the L&D function
You could develop a great L&D function, with a perfect learning strategy, but if no one knows about it then no one will become the ‘end-user’ of the services offered! Awareness is critical for the success and growth of the L&D initiatives.
Should internal comms, marketing, and raising awareness of a newly designed L&D function to be the job of the Marketing Team or HR?
The answer is a proper collaboration among both teams to ensure all people are reached through communication and that the correct metrics are tracked to monitor if communications and marketing methods are working or not.
While in this early stage of understanding the business situation, seek clarity on what communication channels have worked in the recent past with other initiatives. Here you want to look at successful but not too noisy communication channels available in the org.
02 — Developing a Brand Identity
An essential part of a strong relationship with the people using your services is strong brand identity. Your brand identity is not merely a logo or icon used to identify your new L&D department but it is an entire experience for the customer that is coherent and consistent across the board.
One way your brand identity helps form deep relationships with your users is through the values your brand exhibits. Your brand’s core values make it easier for you to have consistent messaging across all marketing and communication assets, and also helps you keep your brand authentic and unique.
While there are many tools available to help start developing a brand identity, one you can get started with right away is the Brand Key template. It has 9 elements that you identify for your brand. Learn more about the Brand Key and its elements here.
It can become easy to confuse your branding and brand identity. There is a very helpful post by Kim Jursa, Brand Strategist, on the differences between Branding, Brand Identity, and Brand - learn more about the differences here and how you can approach each component for your L&D department.
03 — Getting funding and buy-in
Before you ask for funding or an increased budget, you have to identify stakeholders and utilize a stakeholder map, like the one in the example below. Stakeholder mapping allows you to gain buy-in and execute on L&D initiatives more efficiently with support. Having the right stakeholders also allows you to increase project visibility, which in-turn equips you to ask for additional funding or added resources, provided the results are of value!
Too often L&D budgets are based on headcount, where companies will take the industry average of the ‘Direct Learning Expenditure’ (DLE) per employee and use that as a basis for what the enterprise L&D budget should be. According to the ATD 2021 State of the Industry Report, the Average Direct Learning Expenditure per employee in 2020 was about $1,300; with BEST award-winning organizations spending ~$1,000 per employee and organizations larger than 10,000 employees spending ~$700 per employee. This is to say the range for DLE varies and one can benchmark against any number of subsets within an industry to set a headcount-based budget.
There are a few other factors you want to add to your budget, or funding request.
- Learning technology or LXP
- Content creation route
- Internal/external SMEs
- Instructional Designer (ID)
- Content curation route
- Licenses for platforms, libraries, software, and media
- Fees to partner with external learning consultancy
- Learning professionals like Performance Consultants and Data Analyst
You can think of your budget in these primary categories (with room for additional, more nuanced categories):
- Internal staff
- External vendors
2. Tools and Technology
- This covers all the things needed to run L&D like a business, including marketing and advertising.
Here are four L&D budget templates you can get started with right away.
If you are operating on a smaller scale (say a team of 1) and already have a defined budget you need to operate within, then you could also very simply use a waterfall budget approach and work backward from the amount you have and allocate it to all you need to achieve.
For example, when I had a $650,000 budget for a 1,600-person firm (that’s $375 per employee) I focused on the quickest wins and also set aside some funding for (1) additional resources and (2) creating systems and processes for future wins.
- I set aside $150,000 for two L&D professionals, one of whom would help administer Workday Learning and the other would help design and refine learning experiences
- I used ~$100,000 to partner with an external L&D Consulting firm which gave me access to a team of ~5 learning professionals who were able to (a) catalog our currently existing content library, (b) run empathy interviews and focus groups to understand what has and hasn’t worked in previous learning experiences, and (c ) develop a roadmap for learning areas we should focus on with the remaining $400,000 we had left (only $250 per employee).
We focused on manager development, and sales enablement through playbooks and role-plays.
What's important to keep in mind here is that you don’t need to come up with the final budget overnight. It will take time to understand the needs of the organization. To develop a learning strategy that will inform how many people (and which ones) you want to target. And to understand how much time you can afford to build content for them, or how much content you can buy for them.
The above is a simplified approach to budgeting. The L&D budget should not rest only on how much content to build or buy, but should also ensure collaborative peer-learning experiences.