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Introduction
Using A Truly Blended Approach
Level
Level
Level
Level
3
4
5 ROI
6 - Transfer Climate
10 Conclusion
TALENTACQUISITIONANDDEVELOPMENT
Introduction
With its primary focus on business results and return on investment, American Express once again takes center stage
and pioneers the research on how to most effectively deliver
best-in-class training for its global population of people
leaders. While companies all over the globe are scrambling
to offer their employees a variety of training media, there
exists little, if any, research to support their ultimate investment decisions. American Express, a $64 billion, global
organization with more than 65,000 employees in 45 countries, has compared and analyzed three delivery options for
its leadership training program - online, instructor-led, and
a blended approach, using the results to inform its training
strategies and maximize return on investment (ROI).
Despite the growing pressure on training organizations to
deliver tangible and measurable results, a vast majority of
companies cannot quantify the behavior change, business
impact, and ultimate ROI of their initiatives. Add to this, the
challenge of creating an ROI for a Leadership program and
results get even more elusive. This study not only measures
ROI results for a leadership development program, but also
uses these findings to compare ROI across various delivery
modes. Further, a new measure is introduced, where the
leading indicators of impact - those things that help or hinder learners from applying their new knowledge and skills
- are identified and discussed.
As an organization in the service industry, American Express
realized as part of its overall talent strategy, it needed to
inspire its employees to be even more engaged and motivated, as it is their people who ultimately create the American Express customer experience that is unparalleled by
competitors. The company determined it could achieve this
by increasing leadership capability - by equipping its people
leaders with the knowledge and skills to truly engage all
employees.
Level 1: Reaction
Level 2: Knowledge
Level 3: Behavior
Level 4: Impact
2
Level 5: ROI
Level 6: Transfer
Climate
Method of Evaluation
Learner responds to survey upon completion of learning event
(satisfaction with experience)
Learner responds to survey upon completion of learning event
(new knowledge and skills acquired)
Assessment completed by manager, learner, and direct reports
three months after learning event
(observed improvement in leadership skills)
Assessment completed by manager, learner, and direct reports
three months after learning event
(improved productivity of direct reports)
Cost vs. Benefit analysis based on increase in sales productivity
of direct reports over three months
Assesses factors in learners work environment (climate) that will
help or hinder the transfer of learning
Table 1
Measurement
2
3
Participants completed
learning experience*:
Online (n=105)
Instructor-led (n=1,479)
Blended (n=550)
3
Months
7 Level 5
ROI study
Table 2
Level 3 & 4
4.34
4.55
4.47
4.50
4.54
4.53
Level 1 - Satisfaction
Online
Level 2 - Learning
Instructor-led
Blended
Table 3
Level 3
Level 3 - Behavior Change
% or participants showing High Improvement in leadership competencies
100%
90%
Exceptional
80%
High Improvement
70%
60%
51%
50%
40%
30%
42%
32%
20%
10%
0%
Online
Instructor-led
Blended
Table 4
RESULTS:
Level 4
Here American Express study separated its entire sample of direct reports into two distinct groups: Group A
direct reports of high improvement leaders vs. Group
B - direct reports of no improvement leaders. When
looking at the extent to which each of these two groups
of direct reports improved on their primary measures
of performance, some quite astounding differences
emerged. The direct reports of high improvement
leaders increased productivity by an average of 42%,
while the direct reports of no improvement leaders
showed increases of only 16%. (see graph below).
More Often/Open
Recognition of
Accomplishments
Increased/
Maintained 1:1
meeting to
follow-up
42%
40%
Better at Assessing
Strengths and
Weaknesses 7%
Direct Reports of
Direct Reports of
High Improvement No Improvement
Leaders
Leaders
Table 5
16%
21%
More Concentration
on Development/
Career Planning 9%
80%
0%
30%
Setting Clearer/
more aligned
goals 10%
100%
20%
Percentages listed above represent how many participants expressed something similar
Table 6
60%
RESULTS:
Level 4 (Cont.)
gram (expressed as another percentage). That is, on the
direct report survey, it was asked how much of their productivity increases could be attributable to improved leadership (e.g. more direction and support from their leaders)
and on the participant survey it was asked how much of
the improved leadership could be attributable to the training experience. These two percentages are multiplied for
the Level 4 calculation total productivity improvement
directly attributable to the training. When looking at these
products across delivery modes, it was again found that
there were clear differences in impact between the three
delivery options. See the level 4 calculation and the results
of each delivery mode below:
Level 4 Calculation:
%DR productivity
lifted by leadership
% leadership lifted
by SLII (Self Survey)
Total productivity
increase attributable
to training
=
12%
10%
10%
5%
0%
Instructor-led
Blended
From these results we see that for the blended solution, 12% of the direct reports productivity improvement is a direct outcome of his/her leader attending the leadership training. This
means that a manager can improve his/her direct reports performance on a given metric
by 12% should he/she demonstrate an improved leadership style. American Express then
decided to examine what a 5, 10, or 15% increase in productivity ultimately means to the
corporate bottom line.
Table 7
While the Level 4 data makes an incredible case for how the
behavior of a leader can impact productivity, the next step
was to isolate just how much of this difference in productivity can be directly attributed to the training, and once again,
compare this impact across delivery modes (classroom vs.
online vs. blended). After all, there may be a multitude of
factors that can either make an employee perform better
or make their leader improve their leadership skills over
a three-month period. To isolate the unique influence of
the leadership program, American Express factored in how
much each direct report was influenced by their leaders
specific changes (expressed as a percentage) and how
much each leaders changes were influenced by the pro-
Level 5 - ROI
Instructorled Training
Online
Learning
Blended
Learning
$50,000
$50,000
$50,000
Increase in Productivity
10%
5%
12%
$5,000
$2,500
$6,000
5.6
5.6
5.6
$28,000
$14,000
$33,600
$2,611*
$1,368
$1,766
Return on Investment
972%
923%
1,599%
Table 8
86%
82%
72%
46%
17%
38%
Expects to be
rewarded?
No Improvement Group
High Improvement Group
Table 9
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
RESULTS:
important to the impact of the training that when the climate was held constant across all delivery modes (where
online, instructor-led, and blended training participants had
equally supportive and involved immediate managers) there
were no significant differences in impact.
Leone explains, If you have a high climate, differences
created by the mode of delivery disappear and you will
get similarly effective results. The climate is really what
is predicting the impact and not necessarily the delivery
mode. The blended approach had more positive results
here because many of the sustainability tools and conversation starters are built right into the training design. This
led to the high climate, which led to higher improvement in
the leadership competencies, greater impact on the business, and finally greater ROI. The overall message is that
although any delivery mode can be highly effective, in reality the blended solution does more to ensure the climate
is there and maximized. The illustration below summarizes
these important relationships:
Higher
transfer
climate
Higher
improvement in
leadership
competencies
Greater
business
impact
Greater ROI
Manager clearly communicates endorsement and support for the training set goals and expectations
before learner initiates learning event
Manager follows up with participant after the event to discuss what was learned and how to apply
Manager recognizes and rewards improved leadership behavior
Table 10
Blended =
High touch
communication,
business leader
support, kick-off,
follow-up
sessions
Conclusion
In 2003, American Express launched a global leadership
development effort in three formats. At the same time, the
Talent Acquisition and Development group also launched a
comprehensive evaluation effort to determine the sustained
effectiveness of the development efforts.
10
American Express evaluated the three training delivery options: basic online courses; instructor-lead classroom training events; and a blended learning solution combining both
online and classroom training, including executive sponsorship communications, kick-off and wrap-up events and supportive manager discussions throughout the courses.
In evaluating each method, American Express used the traditional Kirkpatrick Level 1-4 and Philips Level 5 measures
and found the following results:
The leadership training received similar positive satisfaction (L1) and knowledge (L2) scores (88-90%), regardless of how it was delivered.
The training resulted consistently in high improvement
in on-the-job performance (L3) (32% online; 42% classroom; 51% blended).
The direct reports of high improvement leaders reported from 5% to 12% net improvement in productivity
(L4) attributed to the training itself.
Due to cost savings in the American Express approach
to blended learning delivery, ROI (L5) for blended was
75%-100% greater than either online or classroom
alone.
They found that the key measurement was Return on Investment (ROI) and then American Expresss own, crucial Level
6 measure, Transfer Climate.
The Transfer Climate measure, developed by American Express researcher Paul Leone, is the extent to which factors
in a participants immediate work environment were either
helping or hindering the transfer of the learning back to
the job. This additional level of analysis not only lets the
organization know why training is far more effective for
some groups over others, but also informs business groups
what they can do to maximize the effects of their employees
training in the future.
In this case, the new measure Level 6 Transfer Climate,
indicated that the blended learning approach, which created and fostered a climate of high, immediate manager
support, offered significantly higher impact at a much lower
cost. This resulted in an ROI almost 75% greater than that
of the other two delivery modes, or nearly double if the full
costs of the two-day instructor led options are considered.
Conclusion
TALENTACQUISITIONANDDEVELOPMENT
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1.