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A guide to business impact modelling

26th Nov 2012
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Kenneth Fee and Dr Alasdair Rutherford explain the strategic linkage between learning activities and business outcomes for the L&D community.
Does learning and development have an impact on your organisation? Perhaps you run a lot of courses, support a lot of coaching or work-based learning, create and distribute a lot of online learning, and/or many other things; but does it make a difference? And can you prove it?
Many organisations are acutely cost aware without being remotely value aware – they don't have a clear understanding of what impact their learning and development has. But you can't expect to know what the impact of your learning will be if you don't understand how it will have impact. Business impact modelling provides a means to describe and test the ways in which learning creates value in your organisation.
At its most basic, business impact modelling is a description of the chain of events leading from learners first showing up on day one through to the impact on your organisation. At its most complex, it can be a sophisticated diagrammatic model of the pathways and links between activities and outcomes that interact to create value. However, business impact modelling is not an end in itself, but rather a tool to help you diagnose and demonstrate how learning adds value, and so how you use it should be driven by the needs of your organisation.

Understanding the basics

To begin with, you need to agree on the activities which make up the learning you are going to evaluate. These will be the OUTPUTS. You also need to identify the resources required to deliver the learning activities. These are the INPUTS. You then need to identify what it is that learners will learn, and how this will change what they do. These are the OUTCOMES. Outcomes can range from learning a new procedure, through actually applying that procedure, to the impact on the business of employees adopting that procedure.
OUTCOMES
INPUTS
OUTPUTS
SHORT TERM
MEDIUM TERM
LONG TERM
Resources including staff time, room hire, equipment
Sessions run, workshops, tutorials, coaching,
Outcomes immediately following the training, including knowledge learned, skills gained, attitudes developed.
Outcomes once the learning begins to be applied, including behaviour change, work outputs and impacts on colleagues
Outcomes once learning has been imbedded, including changes in efficiency, effectiveness, and organisational level impact such as profit or sales
You need to be able to draw direct links from activities to knowledge to behaviour, from outputs to outcomes, and from short-term outcomes to long-term outcomes. Critically, you also need to secure agreement from the relevant stakeholders that these links are credible and realistic.
The impact model should tell the story of your learning activity, building the chain of impacts from delivering learning through to the impact on the organisational objectives. Describing your learning activities in this way can be very helpful in identifying how trainers, learners, line managers, and senior management anticipate that the learning will add value to the business. They may not all agree. Establishing that early on, and creating an impact model that all stakeholders can agree on can be a really valuable exercise in itself. But the real value is when it comes to evaluating the learning.
A simple model like the one above works well for more traditional learning interventions where learning is delivered in a structured way, and is then applied in the workplace. Impact clearly runs from left to right in the diagram. However, business impact modelling really comes into its element when you are trying to describe (and then evaluate) more complex learning interventions.
Your learning programme may include interlinked outputs over time. Short- or medium-term outcomes may contribute to the delivery of later outputs or of other outcomes. The delivery of some outputs may be contingent on the extent or type of some outcomes. Combinations of these outcomes through time may combine to realise longer term outcomes. The impact links in your model may then run left to right, right to left, or up and down. The model may incorporate feedback cycles. The process of monitoring and evaluation itself may feed into the design and delivery of later outputs. Business impact modelling provides a method to represent this structure in an accessible way, so that the chain of impacts can be clearly defined and tested.

Testing the link

Once you have built your impact model you can then use it to design your learning evaluation. It should include all the potential sources of value that stakeholders expect the learning to produce. It may include potential value that was not identified when the learning was designed or commissioned. You can then prioritise the value for your organisation, and use the model to identify when and where to measure in your evaluation.

Causality

Causality is a topic that can really fire up evaluators. When it is not possible or practical to use control groups, an impact model can be used to gather evidence that the learning is at least contributing to the value created. Gathering evidence to test the links in the chain helps to show that the learning is contributing at each stage to the final value observed. If you can gather robust evidence of impact at several critical points in your impact model then you can build a compelling case for the impact of your learning programme.

Putting it all together

Business impact modelling is an approach to help you describe your learning programme in a way that makes evaluation of learning easier. It is a useful tool for explaining your learning programme and its impacts to others. And finally, it helps to ensure that stakeholders have a shared understanding of what the learning is and how it will make a difference in your organisation. Whether you use it to build a simple chain or a complicated spider’s web, business impact modelling can help you understand both the 'what' and the 'how' of the impact of learning in your organisation.
This article first appeared on the Airthrey website

Kenneth Fee and Dr Alasdair Rutherford are the founding directors of learning evaluation firm Airthrey Ltd. Ken is a career learning and development professional, whose latest book, 101 Learning & Development Tools, deals with evaluation among other topics. Alasdair is an evaluation and econometrics specialist, and a Research Fellow at the University of Stirling

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