Establishing L&D as a Business Unit: Are You a Value Driver or a Cost Center?

Did you know there’s a link between corn and data? Well… there is. In one of our most recent webinars—Establishing L&D as a Business Unit: Are you a Value Driver or a Cost Center?—Robyn A. Defelice, intrapreneur, author, and presenter, helped us make the uncommon connection. Back in the 1920s and 1930s, farmers discovered an innovative, hybrid corn seed that produced a better yield than its conventional counterparts. It didn’t need to be cultivated or propagated each season like traditional crops; it simply had to be bought yearly. It was a miracle crop. 

The only problem was no one was buying it.

What happened next was the diffusion of innovations and the birth of modern-day marketing. It’s a theory about the social economics of influence and communication that perpetuates the sale —or spreading—of an innovative product. The salesperson was the most knowledgeable about the innovative corn seed, but they couldn’t sell it. This experience taught us to lean on the influence of authoritative gatekeepers to diffuse innovation. It’s a formula that still rings true today through influencers on social media platforms like Twitter (X), Instagram, TikTok, and YouTube. Social media influencers have a profound impact on modern-day consumer behavior. 

Learning and development (L&D) professionals serve as the authoritative gatekeepers through which learning and development are diffused at an organization.

The competency quotient.

If your L&D function is not aligned with the company’s mission, you will be seen as a cost center, not a strategic partner. A mission statement is an organization's most rolled-up version of a capabilities statement. To do your daily mission work, you must be capable and confident to be competent. It’s almost like a mathematical equation: capable plus confident equals competence. Human resources (HR) and learning and development are the ambassadors of an organization’s capability. First, HR identifies the capabilities that need to be brought into the organization. These capable employees are then handed off to L&D to gain confidence through onboarding and training. L&D professionals ensure an internal and external talent pipeline of leaders and managers, all in service of the mission.

If you, as an L&D professional, aren’t tuned in to your own needs for competency, you’ll be deoptimized as well.

To be confident in your role, you need data. But what data? Data that tells you how your programs are performing. Having that data in your arsenal is how you become more efficient, mature, and proactive in your function. Equipped with the correct data, you become another essential part of the business that drives decision-making. You can build value by collecting data on your basic operational processes. This is about easy wins that, if implemented, could render results in as little as two weeks.

L&D is a young industry.

The function of finance has been around since ancient times. Marketing was developed in the late 1800s. HR and L&D, however, came about much later (early-to-mid 1900s). When you compare the L&D industry to other business drivers within an organization, it’s the newest kid on the block. More recently, the infant L&D industry has shifted toward data-driven performance enablement. 

Making the shift to driving value.

The perception of L&D needs a paradigm shift from cost center to value driver. In far too many organizations, L&D is seen as a cost center, just another expense for the business. L&D professionals are seen as order-takers who only deliver training upon request. Learning and development members are also known to focus solely on learning metrics like completion rates and engagement. And the function is structured wherever an organization thinks it fits best.

Learning and development should be:

• Driving value. An investment with measurable ROI instead of an expense.
• A strategic partner. Trusted collaborators who improve business performance, not order takers who deliver training on request.
• Focused on business metrics. Big-picture thinkers who concentrate on metrics that impact the business's overall health, like revenue and time to competency, instead of being hyper-focused on metrics like completion rates and engagement.
• Business-integrated. Be embedded in operational strategy rather than being placed where an organization thinks it fits best.  

“Learning and development is an art, it is a science, and it is a business. Period. It is not just one of those things. It is all three in combination. And they have to have reciprocity with each other.” — Robyn A. Defelice

How to tell a value-based story:

• Build your awareness and understanding. Develop a conscious awareness of L&D as a business function, including data literacy, understanding the difference between quantitative and qualitative data, data segmentation, and how to create standards. Descriptive statistics are essential, too, to describe the population of learners with key demographic information. Consistency is critical as well. 
  
  
• Pick your story. Decide what you want to communicate about impact. Is there a lack of resources? Do you want to share efficiencies? Are new capabilities being developed? By the way, it’s okay if the story you want to tell shifts as data becomes available. Iterate and adjust as needed. Use data to tell the story you want to tell.

• Develop a baseline. Track hours accurately over a period of about six weeks. Refine categories as needed and factor in other aspects of the story the snapshot doesn’t include.

Following a formula like this helps employees feel supported, heard, and acknowledged, making them more confident and, therefore, more competent to do their jobs well. This is a powerful value to provide as an L&D professional.

Watch the webinar recording here - Establishing L&D as a Business Unit - Are You a Value Driver or a Cost Center? Learn how to become a value driver instead of a mere business expense.