From FinTech to MarTech to EdTech, I’ve been around the startup and scaleup tech scene, and in my mind, the Learning and Development (L&D) department is the last bastion that struggles to demonstrate Return on Investment (ROI) consistently. The reality is that learning should be maximising profitability across the whole business, plain and simple - the irony is that it holds the keys to making every individual, every employee, perform at their optimum. Business success is in L&D’s control - they just need to realise it.
The fact is, learning platforms with EdTech are becoming as data-centric as any FinTech and MarTech solution out there, and there are basic metrics that can tell the C-suite exactly what it needs to know. As a learning and knowledge platform, Fuse is driving top-line growth leading to increased profitability, and it’s demonstrated on a daily basis amongst our clients.
Rest assured that we do value the other benefits learning brings to companies and individuals. It’s a big sense of pride for us to know that we are helping to build happier, stronger companies driven by people who are using learning as fuel to drive their knowledge, intelligence and career paths.
But as L&D leaders, it’s unlikely these are consistent metrics you’re measured against, So, in this article, let’s look at profitability as the key focus. To do this, we’re going to demonstrate a few examples of how Fuse is affecting the bottom line for our customers - consistently, and reliably.
Avon takes learning to new levels of profitability with +320% in aggregate sales over a 6 month period
Many of the companies we meet have a common problem: they have too many learning platforms. It’s not hard to imagine how this can happen on a global scale, but the fact is that learning platforms aren’t insignificant technology and time investments, and the more people it takes to run them, the bigger the budget line becomes.
Avon has more than 5 million beauty entrepreneurs spanning 53 markets. The company had too many learning platforms, many of which were not successfully promoting continuous learning. It’s one thing to have too many platforms, but if none of them is doing the job in a meaningful way that is driving increased profitability reliably, then the scope of the problem is multiplied.
So, first off, Avon turned off most of its learning platforms and replaced them with Fuse as a common learning platform accessible globally, using different communities for different countries. This in itself was a huge cost saving, which flows straight through to improved profitability.
Secondly, our approach to learning transformed it from a task to a habit. Why? Because you can’t just have engaged learners who are accelerating company profitability from June to September, for example. In order for learning to drive profitability reliably and consistently, it has to be continuous and habitual.
It worked. When Avon analysed different metrics such as completion rates, consumption of content and levels of interaction, the data very clearly showed that it was the frequency with which our beauty entrepreneurs were coming back to the platform that made the biggest difference - this is where we saw the really dramatic uplifts in business performance.
An incremental increase in monthly visits to the platform - the difference between low frequency (1 to 2 visits per month) and medium frequency (3 to 4 visits per month) - showed dramatic uplifts of +320% in aggregate sales over a 6 month period.
Beauty entrepreneurs were coming back to the platform because it worked for them. They were refreshing their understanding of products, and searching for answers to problems. They were looking for new knowledge.
These habits of learning measured by the frequency Avon reps chose to return to the platform each month became one of the biggest indicators of commercial success the learning industry has ever seen. Again, this all flowed through to bottom line growth (in other words, profitability) leading to increased shareholder value.
Reduced time-to-market for both engineers and salespeople: The Hilti learning transformation
Hilti is a multinational developer and manufacturer of products for construction and building maintenance has more than 3,000 employees globally. In 2017, Hilti partnered with Fuse to revolutionise its learning experiences for all employees, and to drive ROI and profitability from learning.
Ask Hilti what ‘performance’ means in learning and you’ll get a consistent answer across the organisation. What the company calls its ‘triple bottom line’ is this: Performance means achieving quarterly and annual targets - this means that each employee contributes to the overall Hilti targets - and this is done by maintaining both employee and customer engagement.
So how did Hilti tie in learning to achieve its targets? First and foremost, with Fuse, Hilti quickly went from having 90% of its learning as third party, external content, to having 90% of its learning come from internal Hilti thought leaders. From a top-level point of view, the in-house content was a cost-saving in itself, but there’s more to it than that.
In implementing Fuse, Hilti changed from static courses, to ‘learning in the flow of work, at the point of need.’ Originally, its engineering modules took more than ten hours per course, and employee onboarding was a four week, in-person commitment. As the company says, with Fuse, what used to take 60-90% of the year to deliver in learning is now learning on the go, in bite-sized amounts, via mobile devices.
Not only is the time and cost savings significant, but the impact on performance and profitability has been widely recognised: when people don’t have to dedicate vast time commitments to training that may be become obsolete within six months or a year, they can focus on providing valuable services for customers that can and do affect the bottom line.
Hilti’s sales onboarding time and reduced costs with Fuse costs are also a strong metric: what used to be a 15 months sales onboarding process payback period has become a three-month payback process with Fuse. Surely helping your salespeople to hit the ground running has got to be one the strongest drivers of profitability a company can ask for, right?
Recalibrating Technology ROI in the Pandemic Era
Regardless of whether we’re entering a mid or post-pandemic stage, it would be wrong to say that profitability is a bigger priority than ever: profitability has and always will be business’ biggest priority. But I agree, as per Deloitte’s 2020 Global Technology Leadership Study,that maximising the impact of technology investments will become the new normal, and that we’ll see a marked move or recalibration of technology ROI in today’s business landscape.
It’s not enough for learning to be a nice-to-have, or a promoter of good knowledge transfer or employee engagement. The C-suite and technology leaders quite rightly expect their technology investments to drive demonstrable business value by delivering growth and innovation. As we’ve shown with just two Fuse customer examples, learning that affects the bottom line positively is an achievable and measurable reality.
In the next part of this series, we’ll be looking at the top 10 metrics that matter for L&D for profitability.