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Getting to the Bottom of ROI: Soft ROI Measurement

April 27, 2021
Apr 27, 2021 7:00 PM

I talked last week about the three primary ways to measure "ROI", which we'll dive into for the next few weeks:          

- Soft ROI (Leverages more general indicators, sometimes with qualitative data for support)          

- Inferred ROI (Do you or your team have the time?)         

- Full ROI Study (Most rigorous approach to ROI, leveraging the work done by the ROI Institute)

So, what are the possible ways to think about Soft ROI in terms of measures and the story that you can tell:

Measures: For Soft ROI, you're mostly going to be looking at evaluation data (Performitiv or other systems) and activity data (mostly from a learning management system or a content curation platform).  You can tell a good story with just this data if you are asking the right questions!

From an evaluation perspective, make sure you have data around the delivery (instructor, content, environment, technology) because you'll need to be able to show that training was delivered effectively.  If that's not the case, then the ROI won't be as strong.

You'll also need data on impact. This could be around application to the job, performance impact, productivity impact, or whatever the program is intended to impact in the business.  This is a critical piece for soft ROI because you're going to leverage the evaluations to provide you with indicators for business outcomes impacted by training.  Phrase questions in such a way that you'll be able to turn the results into a story.  More on this below.

From an activity perspective, instead of showing just raw completions or attendance numbers, consider showing "Reach," which is the % of the target population who completed training.  That can help speak to the breadth of the impact a program is having rather than just how many.  It can be the impetus for expanding training solutions or in some cases, scaling back where the target audience may be too general.

Telling the Story with Soft ROI: Telling the story is almost as important as the underlying data.  Even positive data can be lost or misrepresented if it's not communicated in the right way.  A few tips to consider when sharing your data:

Providing the Context: Don't just throw an average or number, even a good one, without some additional context to help the consumer understand whether it's "good" and to what extent.  Is the data going up or down?  Do you have an internal goal to compare against?  Is there an industry or external benchmark?  (This one especially tends to be a favorable comparison point)

Talking About Impact: Even with pure evaluations, if you ask the right questions you should have data available.  The easiest way to illustrate this is to talk through an example.  Let's say you have a New Manager Program that all new managers go through.  

As part of the measurement and discussions with the business, the most important outcomes are improved productivity (being able to work smarter, better, more effective) and confidence (do they feel more equipped and able as a manager?). We add two questions to our evaluations - "To what extent will this training make you more productive?" and "I am more confident in my abilities as a manager after going through the New Manager Program."  How would we report on that data?  

I might present it as the percentage of new managers that reported a high extent of impact (e.g. "78% of new managers report they will be more productive as a result of the program") and the percentage of new managers that reported increase confidence (e.g. "89% of new managers feel more confident in their abilities as a manager as a result of the program").  Two simple survey questions, but when they are reported on effectively, can be compelling to communicate impact.

Tell the story you want to tell, the way you want to tell it.  This does not mean to just focus on the positive data.  Executives already know that we aren't delivering 'perfect' training every time, so it goes further to have a balanced story (to the extent you can).  If there are improvement opportunities, call them out and tell the stakeholder(s) what you're doing about it.  Think about what you would communicate and what the stakeholder(s) would want to know to feel confident that the training you are delivering is effective.

Challenges with Soft ROI: This type of ROI is the easiest to execute but has a couple of its own bigger challenges.

The obvious one lies with the data availability; this is not an ROI method that involves extensive (or any) business data.  Some leaders may hone in on that for a number of reasons.  Although this is a challenge, reposition it to be favorable to you.  If a leader is questioning the method and asking about actual results, talk about what challenges you're experiencing and what could help you overcome those challenges.  Come prepared to your meeting with that information if it comes up!  

This type of ROI is more challenging after the fact if you didn't ask the right questions.  It's important to have your measurement plan ready as early as possible.  Ideally before the program even starts, but if the program has started and you realize you aren't asking the right questions - change them!  There's no use collecting data that's not valuable or actionable just because you already have some there.

I hope this is helping to get you thinking about different ways you may be able to leverage data you already have or could easily get; I look forward to sharing more information in the coming few weeks. Happy Measuring!

Chris LeBrun
Director, Professional Services