ROI Methodology

Forward-thinking HR and L&D professionals make vital contributions to organisational strategy and welcome the accountability that comes with greater engagement. To demonstrate impact, you need robust data and a discipline for extracting meaning from the data - in short, the ROI methodology.

The ROI methodology used and taught by Abdi specifically addresses the ambiguities in human interventions. Correctly applied, it lets you calculate the return on your organisation's investment in learning and development.

Bottom line improvement:
but can my intervention take the credit?

A vital question, with a three-part answer:

• Not causality but evidence of a chain of impact.
• Impact results are adjusted for the impact of other influences.
• Standardisation through twelve guiding principles supports credibility.

The ROI methodology links the outcome to the intervention through a chain of impact at up to five levels:

1. Participant reaction and planned action.
2. Participant learning.
3. Related operational changes.
4. Related improvements in business results.
5. Hence return on investment - the net financial gain set against the total cost.

The methodology uses a range of techniques to isolate the effects of the L&D from other influences.

Getting the data
Robust data - both quantitative and qualitative - is key to a credible ROI figure. The methodology helps you decide what to measure. It shows how to convert qualitative outcomes to monetary values.

Help with process
The ROI methodology offers case studies, checklists, pro-formas and other tools to help with:

• Planning an intervention (starting by identifying the business-level goals, then the operational needs, and considering how, and how well, the planned intervention will meet those needs).
• Planning upfront how the intervention will be evaluated - potentially at each of the five levels.
• Collecting the data for the evaluation.
• Estimating what proportion of the results can be attributed to the intervention.
• Converting the data to monetary value.

Credible results
Judgments are involved when translating soft data into money or isolating the impact of interventions. The ROI methodology uses twelve guiding principles to help standardise the approach and ensure the credibility of the results. The overall ethos is: if in doubt, claim less.

Continuous improvement
The best companies see the ROI methodology as much more than a means to quantify L&D impact. It is a process improvement tool. Measuring the impact of workplace learning shows up ways to make it more effective.

"We know this methodology is not a hard science, it's a craft."

David Vachell, former Head of Learning Strategy & Policy, BT Global Services

Aren't there alternatives to the approach abdi offers?

The ROI methodology is the de facto international standard for measuring the impact of L&D and other soft interventions. Plenty of other approaches offer parts of the process and use similar frameworks but none have the long track record that delivers what works in the widest range of real world settings.

Building scorecards

The evaluations of individual programmes are the building blocks of scorecards for tracking impact and value data across an organisation or sector.