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class="mck-u-links-inline">The ACADEMIES framework is a useful tool for conceptualizing learning strategy.</div></div></div></section><main data-layer-region="article-body" class="mdc-u-grid mdc-u-grid-gutter-xxl"><div class="mdc-u-grid mdc-u-grid-col-1 mdc-u-grid-col-md-12"><div class="mdc-u-grid-col-md-start-2 mdc-u-grid-col-md-end-12 mdc-u-grid-col-lg-start-3 mdc-u-grid-col-lg-end-11"><div class="mdc-o-content-body mck-u-dropcap"><div data-component="mdc-c-module-wrapper" data-module-theme="default" data-module-background="transparent" data-module-category="" class="DownloadsSidebar_mck-c-downloads-sidebar__iFmyt mck-o-xs-right-span"><div data-layer-region="downloads-right-rail"><h3 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_2734c4f mdc-c-heading--title___5qyOB_2734c4f mdc-c-heading--border___K8dj3_2734c4f"></h3><div><div data-component="mdc-c-link-container" class="mdc-c-link-container___xefGu_2734c4f"><a data-component="mdc-c-link" href="#/download/%2F~%2Fmedia%2Fmckinsey%2Fbusiness%20functions%2Fpeople%20and%20organizational%20performance%2Four%20insights%2Fthe%20essential%20components%20of%20a%20successful%20l%20and%20d%20strategy%2Fthe-essential-components-of-a-successful-l-and-d-strategy-final.pdf%3FshouldIndex%3Dfalse" class="DownloadsSidebar_mck-c-downloads-sidebar__download-link__fPqFQ mdc-c-link___lBbY1_2734c4f" target="_self" data-layer-event-prefix="Download Link" data-layer-action="click" data-layer-report-type="" data-layer-file-name="the-essential-components-of-a-successful-l-and-d-strategy-final" data-layer-report-name="the-essential-components-of-a-successful-l-and-d-strategy-final>"><span data-component="mdc-c-icon" class="mdc-c-icon___oi7ef_2734c4f mdc-c-icon--size-md___yi5fA_2734c4f mck-download-icon"></span><span class="mdc-c-link__label___Pfqtd_2734c4f"> (PDF-502 KB)</span></a></div></div></div></div> <p><strong>Over the past decade,</strong> the global workforce has been continually evolving because of a number of factors. An increasingly competitive business landscape, rising complexity, and the digital revolution are reshaping the mix of employees. Meanwhile, persistent uncertainty, a multigenerational workforce, and a shorter shelf life for knowledge have placed a premium on reskilling and upskilling. The shift to a digital, knowledge-based economy means that a vibrant workforce is more important than ever: research suggests that a very significant percentage of market capitalization in public companies is based on intangible assets—skilled employees, exceptional leaders, and knowledge.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="09e6538c-01e5-4b8c-841d-285d757deb3b"><sup class="FootNote_footnotesup__e73z_">1</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="09e6538c-01e5-4b8c-841d-285d757deb3b" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">Intangible Asset Market Value Study, Ocean Tomo.</span></span></span></a></span></p> <div data-component="mdc-c-module-wrapper" data-module-theme="light" data-module-background="lightest-grey" data-module-category="" data-module-gradient-position="bottom-right" class="mck-c-inline-module-container SideBar_mck-c-sidebar__bgimg-wrapper__Qj4Dt mck-o-sm-left-span SideBar_mck-c-sidebar__sidebar-wrapper__Dpjw2 SideBar_mck-c-sidebar__sidebar-wrapper--istablet__IQ6ii mck-u-screen-only mck-c-module-wrapper" data-layer-region="sidebar"><div class="SideBar_mck-c-sidebar__epoAm mck-o-md-center"><div class="SideBar_mck-c-sidebar__share-icons-wrapper__9gB_c"><div data-component="mdc-c-link-container" class="mdc-c-link-container___xefGu_2734c4f mdc-c-link-container--display-column___X0HDD_2734c4f SideBar_mck-c-sidebar__share-icons___eQy6"><div data-component="mdc-c-dropdown-menu" class="mdc-c-drop-down"><button data-component="mdc-c-button" aria-label="" type="button" id="button_id" class="mdc-c-button___U4iY2_2734c4f mdc-c-button--ghost mdc-c-button--size-medium mdc-c-drop-down__rootmenu___yJzvz_2734c4f" aria-expanded="false" aria-haspopup="menu"><span data-component="mdc-c-icon" class="mdc-c-icon___oi7ef_2734c4f mdc-c-icon--default___f-hQM_2734c4f mdc-c-icon--size-md___yi5fA_2734c4f mck-share2-icon"></span></button><div data-component="mdc-c-module-wrapper" data-module-theme="light" data-module-background="white" data-module-category="" class=""></div></div><button data-component="mdc-c-button" aria-label="Expandable Sidebar" type="button" id="button_id" class="mdc-c-button___U4iY2_2734c4f mdc-c-button--ghost mdc-c-button--size-medium SideBar_mck-c-sidebar__toggle-btn__EL8iE" aria-expanded="false" data-layer-event-prefix="UI Item" data-layer-action="click" data-layer-category="sidebar" data-layer-subcategory="open" data-layer-text="open sidebar"><span data-component="mdc-c-icon" class="mdc-c-icon___oi7ef_2734c4f mdc-c-icon--radial___y3csX_2734c4f mdc-c-icon--size-xxl___cL3ZT_2734c4f mck-plus-no-circle-icon"></span></button></div></div><div class="SideBar_mck-c-sidebar__content-outer__UdWCq"><div class="SideBar_mck-c-sidebar__eyebrow__5GSEq"></div><div class="SideBar_mck-c-sidebar__content__raEwe"><h2 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_2734c4f mdc-u-ts-3 SideBar_mck-c-sidebar__content-heading__NJekY"><div>Learning and development—From evolution to revolution</div></h2><div class="SideBar_mck-c-sidebar__content-description__4p9iI mdc-u-ts-7"><div class="mdc-o-content-body"><p>We began in 2014 by surveying 1,500 executives about capability building. In 2016, we added 120 L&D leaders at 91 organizations to our database, gathering information on their traditional training strategies and aspirations for future programs. <a href="/capabilities/people-and-organizational-performance/our-insights/learning-at-the-speed-of-business">We also interviewed 15 chief learning officers</a> or L&D heads at major companies.</p> <p>Historically, the L&D function has been relatively successful in helping employees build skills and perform well in their existing roles. The main focus of L&D has been on upskilling. However, the pace of change continues to accelerate; <a href="/featured-insights/future-of-work/jobs-lost-jobs-gained-what-the-future-of-work-will-mean-for-jobs-skills-and-wages">McKinsey research</a> estimates that as many as 800 million jobs could be displaced by automation by 2030.</p> <p>Employee roles are expected to continue evolving, and a large number of people will need to learn new skills to remain employable. Unsurprisingly, our research confirmed our initial hypothesis: corporate learning must undergo revolutionary changes over the next few years to keep pace with constant technological advances. In addition to updating training content, companies must increase their focus on blended-learning solutions, which combine digital learning, fieldwork, and highly immersive classroom sessions. With the growth of user-friendly digital-learning platforms, employees will take more ownership of their professional development, logging in to take courses when the need arises rather than waiting for a scheduled classroom session.</p> <p>Such innovations will require companies to devote more resources to training: our survey revealed that 60 percent of respondents plan to increase L&D spending over the next few years, and 66 percent want to boost the number of employee-training hours. As they commit more time and money, companies must ensure that the transformation of the L&D function proceeds smoothly.</p></div></div></div></div></div></div> <p>All of these trends have elevated the importance of the learning-and-development (L&D) function. We undertook several phases of research to understand trends and current priorities in L&D (see sidebar, “Learning and development—From evolution to revolution”). Our efforts highlighted how the L&D function is adapting to meet the changing needs of organizations, as well as the growing levels of investment in professional development.</p> <p>To get the most out of investments in training programs and curriculum development, L&D leaders must embrace a broader role within the organization and formulate an ambitious vision for the function. An essential component of this effort is a comprehensive, coordinated strategy that engages the organization and encourages collaboration. The ACADEMIES© framework, which consists of nine dimensions of L&D, can help to strengthen the function and position it to serve the organization more effectively.</p> <h2>The strategic role of L&D</h2> <p>One of L&D’s primary responsibilities is to manage the development of people—and to do so in a way that supports other key business priorities. L&D’s strategic role spans five areas (Exhibit 1).<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="559b287a-4f7b-43ba-855d-d8d099ff2da6"><sup class="FootNote_footnotesup__e73z_">2</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="559b287a-4f7b-43ba-855d-d8d099ff2da6" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">Nick van Dam, <em>25 Best Practices in Learning & Talent Development</em>, second edition, Raleigh, NC: Lulu Publishing, 2008.</span></span></span></a></span></p> <div data-component="mdc-c-module-wrapper" data-module-theme="default" data-module-background="transparent" data-module-category="" class="mck-c-inline-module-container mck-o-md-center"><div class="mdc-u-grid mdc-u-grid-gutter-lg mdc-u-grid-col-sm-1 mdc-u-grid--align-start mdc-u-mb-3 GenericItem_mck-c-generic-item__sGwKL"><div data-component="mdc-c-content-block" class="mdc-c-content-block___7p6Lu_2734c4f mdc-u-grid-gutter-xs GenericItem_mck-c-generic-item__content__gq1m0"><div class="mck-c-eyebrow mdc-u-ts-10"><span> 1</span></div></div></div><div class="mck-u-inline-module-border-top mck-u-inline-module-border-bottom"><picture data-component="mdc-c-picture" class="Exhibit_mck-c-exhibit__image__pyIDm"><source media="(min-width: 768px)" srcSet="/~/media/mckinsey/business%20functions/people%20and%20organizational%20performance/our%20insights/the%20essential%20components%20of%20a%20successful%20l%20and%20d%20strategy/svgz-essential-components-l-and-d-strategy-ex1.svgz?cq=50&cpy=Center"/><img alt="The learning function of an organization has a strategic role in five areas." src="/~/media/mckinsey/business%20functions/people%20and%20organizational%20performance/our%20insights/the%20essential%20components%20of%20a%20successful%20l%20and%20d%20strategy/svgz-essential-components-l-and-d-strategy-ex1.svgz?cq=50&cpy=Center" loading="lazy"/></picture></div><div class="mck-u-sr-only"></div></div> <ol> <li><em>Attract and retain talent.</em> Traditionally, learning focused solely on improving productivity. Today, learning also contributes to employability. Over the past several decades, employment has shifted from staying with the same company for a lifetime to a model where workers are being retained only as long as they can add value to an enterprise. Workers are now in charge of their personal and professional growth and development—one reason that people list “opportunities for learning and development” among the top criteria for joining an organization. Conversely, a lack of L&D is one of the key reasons people cite for leaving a company.</li> <li><em>Develop people capabilities.</em> Human capital requires ongoing investments in L&D to retain its value. When knowledge becomes outdated or forgotten—a more rapid occurrence today—the value of human capital declines and needs to be supplemented by new learning and relevant work experiences.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="3ce3992a-a135-4296-8b35-1032b8eb8117"><sup class="FootNote_footnotesup__e73z_">3</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="3ce3992a-a135-4296-8b35-1032b8eb8117" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">Gary S. Becker, “Investment in human capital: A theoretical analysis,” <em>Journal of Political Economy</em>, 1962, Volume 70, Number 5, Part 2, pp. 9–49, jstor.org.</span></span></span></a></span> Companies that make investments in the next generation of leaders are seeing an impressive return. Research indicates that companies in the top quartile of leadership outperform other organizations by nearly two times on earnings before interest, taxes, depreciation, and amortization (EBITDA). Moreover, companies that invest in developing leaders during significant transformations are <a href="/sitecore/service/notfound.aspx?item=web%3a%7b9b6cb4e2-6eae-4a23-ba98-6974d5ca7856%7d%40en">2.4 times more likely to hit their performance targets</a>.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="1fb23db0-e353-4b6c-8127-ce16413b9568"><sup class="FootNote_footnotesup__e73z_">4</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="1fb23db0-e353-4b6c-8127-ce16413b9568" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">“<a href="/featured-insights/employment-and-growth/economic-conditions-snapshot-june-2009-mckinsey-global-survey-results">Economic Conditions Snapshot, June 2009: McKinsey Global Survey results</a>,” June 2009.</span></span></span></a></span></li> <li><em>Create a values-based culture.</em> As the workforce in many companies becomes increasingly virtual and globally dispersed, L&D can help to build a values-based culture and a sense of community. In particular, millennials are particularly interested in working for values-based, sustainable enterprises that contribute to the welfare of society.</li> <li><em>Build an employer brand.</em> An organization’s brand is one of its most important assets and conveys a great deal about the company’s success in the market, financial strengths, position in the industry, and products and services. Investments in L&D can help to enhance company’s brand and boost its reputation as an “employer of choice.” As large segments of the workforce prepare to retire, employers must work harder to compete for a shrinking talent pool. To do so, they must communicate their brand strength explicitly through an employer value proposition.</li> <li><em>Motivate and engage employees.</em> The most important way to engage employees is to provide them with opportunities to learn and develop new competencies. Research suggests that lifelong learning contributes to happiness.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="7633b253-b505-40b3-9f2e-6a3326dbfc84"><sup class="FootNote_footnotesup__e73z_">5</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="7633b253-b505-40b3-9f2e-6a3326dbfc84" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">John Coleman, “Lifelong learning is good for your health, your wallet, and your social life,” <em>Harvard Business Review</em>, February 7, 2017, hbr.org.</span></span></span></a></span> When highly engaged employees are challenged and given the skills to grow and develop within their chosen career path, they are more likely to be energized by new opportunities at work and satisfied with their current organization.</li> </ol> <h2>The L&D function in transition</h2> <p>Over the years, we have identified and field-tested nine dimensions that contribute to a strong L&D function. We combined these dimensions to create the ACADEMIES framework, which covers all aspects of L&D functions, from setting aspirations to measuring impact (Exhibit 2). Although many companies regularly execute on several dimensions of this framework, our recent research found that only a few companies are fully mature in all dimensions.</p> <div data-component="mdc-c-module-wrapper" data-module-theme="default" data-module-background="transparent" data-module-category="" class="mck-c-inline-module-container mck-o-md-center"><div class="mdc-u-grid mdc-u-grid-gutter-lg mdc-u-grid-col-sm-1 mdc-u-grid--align-start mdc-u-mb-3 GenericItem_mck-c-generic-item__sGwKL"><div data-component="mdc-c-content-block" class="mdc-c-content-block___7p6Lu_2734c4f mdc-u-grid-gutter-xs GenericItem_mck-c-generic-item__content__gq1m0"><div class="mck-c-eyebrow mdc-u-ts-10"><span> 2</span></div></div></div><div class="mck-u-inline-module-border-top mck-u-inline-module-border-bottom"><picture data-component="mdc-c-picture" class="Exhibit_mck-c-exhibit__image__pyIDm"><source media="(min-width: 768px)" srcSet="/~/media/mckinsey/business%20functions/people%20and%20organizational%20performance/our%20insights/the%20essential%20components%20of%20a%20successful%20l%20and%20d%20strategy/svgz-essential-components-l-and-d-strategy-ex2.svgz?cq=50&cpy=Center"/><img alt="The ACADEMIES framework includes nine components." src="/~/media/mckinsey/business%20functions/people%20and%20organizational%20performance/our%20insights/the%20essential%20components%20of%20a%20successful%20l%20and%20d%20strategy/svgz-essential-components-l-and-d-strategy-ex2.svgz?cq=50&cpy=Center" loading="lazy"/></picture></div><div class="mck-u-sr-only"></div></div> <h3>1. Alignment with business strategy</h3> <p>One of an L&D executive’s primary tasks is to develop and shape a learning strategy based on the company’s business and talent strategies. The learning strategy seeks to support professional development and build capabilities across the company, on time, and in a cost-effective manner. In addition, the learning strategy can enhance the company culture and encourage employees to live the company’s values.</p> <p>For many organizations, the L&D function supports the implementation of the business strategy. For example, if one of the business strategies is a digital transformation, L&D will focus on building the necessary people capabilities to make that possible.</p> <p>Every business leader would agree that L&D must align with a company’s overall priorities. Yet research has found that many L&D functions fall short on this dimension. Only 40 percent of companies say that their learning strategy is aligned with business goals.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="a4108d81-c867-4be5-8d71-7691988c0213"><sup class="FootNote_footnotesup__e73z_">6</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="a4108d81-c867-4be5-8d71-7691988c0213" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">Human Capital Management Excellence Conference 2018, Brandon Hall Group.</span></span></span></a></span> For 60 percent, then, learning has no explicit connection to the company’s strategic objectives. L&D functions may be out of sync with the business because of outdated approaches or because budgets have been based on priorities from previous years rather than today’s imperatives, such as a digital transformation.</p> <div data-component="mdc-c-module-wrapper" data-module-theme="default" data-module-background="transparent" data-module-category="" class="mck-c-disruptor1up mck-o-md-center mck-u-inline-module-border-top mck-u-inline-module-border-bottom mck-u-screen-only" data-layer-region="disruptor-1up"><div class="mdc-u-grid mdc-u-grid-gutter-md mdc-u-grid-col-lg-12 mdc-u-grid-col-md-12 "><div class="mdc-u-grid-col-md-span-12"><header data-component="mdc-c-header" class="mdc-c-header"><div class="mdc-c-header__block___i1Lg-_2734c4f"><h3 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_2734c4f"><div>Would you like to learn more about the <a href="/sitecore/service/notfound.aspx?item=web%3a%7be00f5f58-17b1-4ee8-99cd-ec4c875174e0%7d%40en">McKinsey Academy</a>?</div></h3></div></header><div data-component="mdc-c-link-container" class="mdc-c-link-container___xefGu_2734c4f mdc-c-link-container--display-column___X0HDD_2734c4f mck-c-disruptor1up__content Disruptor1Up_mck-c-disruptor1up__content--links__VV4lE mdc-u-grid-gutter-md"><a data-component="mdc-c-link" href="" class="mdc-c-link-cta___NBQVi_2734c4f"><span class="mdc-c-link__label___Pfqtd_2734c4f">See how we help clients</span><span data-component="mdc-c-icon" class="mdc-c-icon___oi7ef_2734c4f mck-link-arrow-right-icon"></span></a></div></div></div></div> <p>To be effective, L&D must take a hard look at employee capabilities and determine which are most essential to support the execution of the company’s business strategy. L&D leaders should reevaluate this alignment on a yearly basis to ensure they are creating a people-capability agenda that truly reflects business priorities and strategic objectives.</p> <h3>2. Co-ownership between business units and HR</h3> <p>With new tools and technologies constantly emerging, companies must become more agile, ready to adapt their business processes and practices. L&D functions must likewise be prepared to rapidly launch capability-building programs—for example, if new business needs suddenly arise or staff members require immediate training on new technologies such as cloud-based collaboration tools.</p> <p>L&D functions can enhance their partnership with business leaders by establishing a governance structure in which leadership from both groups share responsibility for defining, prioritizing, designing, and securing funds for capability-building programs. Under this governance model, a company’s chief experience officer (CXO), senior executives, and business-unit heads will develop the people-capability agenda for segments of the enterprise and ensure that it aligns with the company’s overall strategic goals. Top business executives will also help firmly embed the learning function and all L&D initiatives in the organizational culture. The involvement of senior leadership enables full commitment to the L&D function’s longer-term vision.</p> <h3>3. Assessment of capability gaps and estimated value</h3> <p>After companies identify their business priorities, they must verify that their employees can deliver on them—a task that may be more difficult than it sounds. Some companies make no effort to assess employee capabilities, while others do so only at a high level. Conversations with L&D, HR, and senior executives suggest that many companies are ineffective or indifferent at assessing capability gaps, especially when it comes to senior leaders and midlevel managers.</p> <p>The most effective companies take a deliberate, systematic approach to capability assessment. At the heart of this process is a comprehensive competency or capability model based on the organization’s strategic direction. For example, a key competency for a segment of an e-commerce company’s workforce could be “deep expertise in big data and predictive analytics.”</p> <p>After identifying the most essential capabilities for various functions or job descriptions, companies should then assess how employees rate in each of these areas. L&D interventions should seek to close these capability gaps.</p> <h3>4. Design of learning journeys</h3> <p>Most corporate learning is delivered through a combination of digital-learning formats and in-person sessions. While our research indicates that immersive L&D experiences in the classroom still have immense value, leaders have told us that they are incredibly busy “from eight to late,” which does not give them a lot of time to sit in a classroom. Furthermore, many said that they prefer to develop and practice new skills and behaviors in a “safe environment,” where they don’t have to worry about public failures that might affect their career paths.</p> <p>Traditional L&D programs consisted of several days of classroom learning with no follow-up sessions, even though people tend to forget what they have learned without regular reinforcement. As a result, many L&D functions are moving away from stand-alone programs by designing learning journeys—continuous learning opportunities that take place over a period of time and include L&D interventions such as fieldwork, pre- and post-classroom digital learning, social learning, on-the-job coaching and mentoring, and short workshops. The main objectives of a learning journey are to help people develop the required new competencies in the most effective and efficient way and to support the transfer of learning to the job.</p> <h3>5. Execution and scale-up</h3> <p>An established L&D agenda consists of a number of strategic initiatives that support capability building and are aligned with business goals, such as helping leaders develop high-performing teams or roll out safety training. The successful execution of L&D initiatives on time and on budget is critical to build and sustain support from business leaders.</p> <p>L&D functions often face an overload of initiatives and insufficient funding. L&D leadership needs to maintain an ongoing discussion with business leaders about initiatives and priorities to ensure the requisite resources and support.</p> <p>Many new L&D initiatives are initially targeted to a limited audience. A successful execution of a small pilot, such as an online orientation program for a specific audience, can lead to an even bigger impact once the program is rolled out to the entire enterprise. The program’s cost per person declines as companies benefit from economies of scale.</p> <h3>6. Measurement of impact on business performance</h3> <p>A learning strategy’s execution and impact should be measured using key performance indicators (KPIs). The first indicator looks at business excellence: how closely aligned all L&D initiatives and investments are with business priorities. The second KPI looks at learning excellence: whether learning interventions change people’s behavior and performance. Last, an operational-excellence KPI measures how well investments and resources in the corporate academy are used.</p> <p>Accurate measurement is not simple, and many organizations still rely on traditional impact metrics such as learning-program satisfaction and completion scores. But high-performing organizations focus on outcomes-based metrics such as impact on individual performance, employee engagement, team effectiveness, and business-process improvement.</p> <p>We have identified several lenses for articulating and measuring learning impact:</p> <ul> <li>Strategic alignment: How effectively does the learning strategy support the organization’s priorities?</li> <li>Capabilities: How well does the L&D function help colleagues build the mind-sets, skills, and expertise they need most? This impact can be measured by assessing people’s capability gaps against a comprehensive competency framework.</li> <li>Organizational health: To what extent does learning strengthen the overall health and DNA of the organization? Relevant dimensions of the McKinsey <a href="/solutions/orgsolutions/overview/organizational-health-index">Organizational Health Index</a> can provide a baseline.</li> <li>Individual peak performance: Beyond raw capabilities, how well does the L&D function help colleagues achieve maximum impact in their role while maintaining a healthy work-life balance?</li> </ul> <p>Access to big data provides L&D functions with more opportunities to assess and predict the business impact of their interventions.</p> <h3>7. Integration of L&D interventions into HR processes</h3> <p>Just as L&D corporate-learning activities need to be aligned with the business, they should also be an integral part of the HR agenda. L&D has an important role to play in recruitment, onboarding, performance management, promotion, workforce, and succession planning. Our research shows that at best, many L&D functions have only loose connections to annual performance reviews and lack a structured approach and follow-up to performance-management practices.</p> <p>L&D leadership must understand major HR management practices and processes and collaborate closely with HR leaders. The best L&D functions use consolidated development feedback from performance reviews as input for their capability-building agenda. A growing number of companies are replacing annual performance appraisals with frequent, in-the-moment feedback.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="5bc5dc1f-0f58-4c1f-92ba-6ca3062b6f14"><sup class="FootNote_footnotesup__e73z_">7</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="5bc5dc1f-0f58-4c1f-92ba-6ca3062b6f14" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline"><em>HCM outlook 2018</em>, Brandon Hall Group.</span></span></span></a></span> This is another area in which the L&D function can help managers build skills to provide development feedback effectively.</p> <div data-component="mdc-c-module-wrapper" data-module-theme="default" data-module-background="transparent" data-module-category="" class="mck-c-disruptor1up mck-o-md-center mck-u-inline-module-border-top mck-u-inline-module-border-bottom mck-u-screen-only" data-layer-region="disruptor-1up"><div class="mdc-u-grid mdc-u-grid-gutter-md mdc-u-grid-col-lg-12 mdc-u-grid-col-md-12 "><div class="mdc-u-grid-col-lg-span-4 mdc-u-grid-col-md-span-5 Disruptor1Up_mck-c-disruptor1up__image___2Gc4"><picture data-component="mdc-c-picture"><img alt="Elevating Learning & Development: Insights and Practical Guidance from the Field" src="/~/media/mckinsey/business%20functions/people%20and%20organizational%20performance/our%20insights/elevating%20learning%20and%20development/elevating-learning-development_thumb-book_1536x1536.jpg?cq=50&mh=145&car=16:9&cpy=Center" loading="lazy"/></picture></div><div class="mdc-u-grid-col-lg-span-8 mdc-u-grid-col-md-span-7"><header data-component="mdc-c-header" class="mdc-c-header"><div class="mdc-c-header__block___i1Lg-_2734c4f"><h3 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_2734c4f"><div>Elevating Learning & Development: Insights and Practical Guidance from the Field</div></h3></div></header><div data-component="mdc-c-link-container" class="mdc-c-link-container___xefGu_2734c4f mdc-c-link-container--display-column___X0HDD_2734c4f mck-c-disruptor1up__content Disruptor1Up_mck-c-disruptor1up__content--links__VV4lE mdc-u-grid-gutter-md"><a data-component="mdc-c-link" href="/capabilities/people-and-organizational-performance/our-insights/elevating-learning-and-development-insights-and-practical-guidance-from-the-field" class="mdc-c-link-cta___NBQVi_2734c4f"><span class="mdc-c-link__label___Pfqtd_2734c4f">Learn more about the book</span><span data-component="mdc-c-icon" class="mdc-c-icon___oi7ef_2734c4f mck-link-arrow-right-icon"></span></a></div></div></div></div> <p>Another example is onboarding. Companies that have developed high-impact onboarding processes score better on employee engagement and satisfaction and lose fewer new hires.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_inactive__VZfCp" aria-describedby="77375f3b-32f4-41c6-8c2f-8bf155467bb8"><sup class="FootNote_footnotesup__e73z_">8</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="77375f3b-32f4-41c6-8c2f-8bf155467bb8" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline"><em>HCM outlook 2018</em>, Brandon Hall Group.</span></span></span></a></span> The L&D function can play a critical role in onboarding—for example, by helping people build the skills to be successful in their role, providing new hires with access to digital-learning technologies, and connecting them with other new hires and mentors.</p> <h3>8. Enabling of the 70:20:10 learning framework</h3> <p>Many L&D functions embrace a framework known as “70:20:10,” in which 70 percent of learning takes place on the job, 20 percent through interaction and collaboration, and 10 percent through formal-learning interventions such as classroom training and digital curricula. These percentages are general guidelines and vary by industry and organization. L&D functions have traditionally focused on the formal-learning component.</p> <p>Today, L&D leaders must design and implement interventions that support informal learning, including coaching and mentoring, on-the-job instruction, apprenticeships, leadership shadowing, action-based learning, on-demand access to digital learning, and lunch-and-learn sessions. Social technologies play a growing role in connecting experts and creating and sharing knowledge.</p> <h3>9. Systems and learning technology applications</h3> <p>The most significant enablers for just-in-time learning are technology platforms and applications. Examples include next-generation learning-management systems, virtual classrooms, mobile-learning apps, embedded performance-support systems, polling software, learning-video platforms, learning-assessment and -measurement platforms, massive open online courses (MOOCs), and small private online courses (SPOCs), to name just a few.</p> <p>The learning-technology industry has moved entirely to cloud-based platforms, which provide L&D functions with unlimited opportunities to plug and unplug systems and access the latest functionality without having to go through lengthy and expensive implementations of an on-premises system. L&D leaders must make sure that learning technologies fit into an overall system architecture that includes functionality to support the entire talent cycle, including recruitment, onboarding, performance management, L&D, real-time feedback tools, career management, succession planning, and rewards and recognition.</p> <hr/> <p>L&D leaders are increasingly aware of the challenges created by the fourth industrial revolution (technologies that are connecting the physical and digital worlds), but few have implemented large-scale transformation programs. Instead, most are slowly adapting their strategy and curricula as needed. However, with technology advancing at an ever-accelerating pace, L&D leaders can delay no longer: human capital is more important than ever and will be the primary factor in sustaining competitive advantage over the next few years.</p> <p>The leaders of L&D functions need to revolutionize their approach by creating a learning strategy that aligns with business strategy and by identifying and enabling the capabilities needed to achieve success. This approach will result in robust curricula that employ every relevant and available learning method and technology. The most effective companies will invest in innovative L&D programs, remain flexible and agile, and build the human talent needed to master the digital age.</p> <p>These changes entail some risk, and perhaps some trial and error, but the rewards are great.</p> <p><em>A version of this chapter was published in TvOO Magazine in September 2016. It is also included in</em> <a href="/capabilities/people-and-organizational-performance/our-insights/elevating-learning-and-development-insights-and-practical-guidance-from-the-field">Elevating Learning & Development: Insights and Practical Guidance from the Field</a><em>, August 2018.</em></p> <div data-component="mdc-c-module-wrapper" data-module-theme="default" data-module-background="transparent" data-module-category="" class="mck-c-disruptor-signup mck-o-lg-right-span mck-u-inline-module-border-top mck-u-inline-module-border-bottom mck-u-screen-only" data-layer-region="disruptor-signup"><div data-component="mdc-c-content-block" class="mdc-c-content-block___7p6Lu_2734c4f"><h2 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_2734c4f mdc-u-ts-4 DisruptorSignUp_mck-c-disruptor-signup__heading__JR4i0"><div>Stay current on your favorite topics</div></h2></div><div data-component="mdc-c-link-container" class="mdc-c-link-container___xefGu_2734c4f mdc-c-link-container--align-left"><a data-component="mdc-c-link" href="/user-registration/register-mvc" class="mdc-c-button___U4iY2_2734c4f mdc-c-button--primary___Ed-lT_2734c4f mdc-c-button--size-large___jwpUy_2734c4f"><span class="mdc-c-link__label___Pfqtd_2734c4f">Subscribe</span></a></div></div></div><div class="container-placeholder"></div></div></div><div class="mdc-u-grid mdc-u-grid-gutter-xl"><section role="contentinfo" data-layer-region="article-about-authors" class="mdc-u-grid mdc-u-grid-col-md-12 AboutAuthor_mck-c-about-author__nRJzu"><div class="mdc-u-grid-col-md-start-2 mdc-u-grid-col-md-end-12 mdc-u-grid-col-lg-start-3 mdc-u-grid-col-lg-end-11"><h5 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_2734c4f mdc-c-heading--title___5qyOB_2734c4f mdc-c-heading--border___K8dj3_2734c4f mdc-u-align-center"></h5><div data-component="mdc-c-description" class="mdc-c-description___SrnQP_2734c4f mdc-u-ts-8 mck-u-links-inline mck-u-links-inline--secondary mdc-u-mt-5"><div><p><strong>Jacqueline Brassey</strong> is director of Enduring Priorities Learning in McKinsey’s Amsterdam office, where <strong>Nick van Dam</strong> is an alumnus and senior adviser to the firm as well as professor and chief of the IE University (Madrid) Center for Learning Innovation; <strong>Lisa Christensen</strong> is a senior learning expert in the San Francisco office.</p></div></div></div></section><section class="mdc-u-grid mdc-u-grid-col-md-12 mck-u-screen-only"><div class="mdc-u-grid-col-md-start-2 mdc-u-grid-col-md-end-12 mdc-u-grid-col-lg-start-5 mdc-u-grid-col-lg-end-9"><h5 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_2734c4f mdc-c-heading--title___5qyOB_2734c4f mdc-c-heading--border___K8dj3_2734c4f mdc-u-align-center">Explore a career with us</h5><div data-component="mdc-c-link-container" class="mdc-c-link-container___xefGu_2734c4f mdc-c-link-container--align-center___ar3mu_2734c4f"><a data-component="mdc-c-link" href="/careers/search-jobs" class="mdc-c-button___U4iY2_2734c4f mdc-c-button--secondary___Boipq_2734c4f mdc-c-button--size-large___jwpUy_2734c4f" aria-label="Search Openings" data-layer-event-prefix="CTA Link" data-layer-action="click" data-layer-category="careers" data-layer-subcategory="search" data-layer-text="Search Openings"><span class="mdc-c-link__label___Pfqtd_2734c4f">Search Openings</span></a></div></div></section></div></main></div><div data-component="mdc-c-module-wrapper" data-module-theme="light" data-module-background="lightest-grey" data-module-category="StandalonePromo" class="RelatedArticle_mck-c-article-related__GGA76 mck-u-screen-only" data-layer-region="related-articles"><div class="mdc-o-container__wrapper is-wrapped mdc-u-spaced-mobile"><h5 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_2734c4f mdc-c-heading--title___5qyOB_2734c4f mdc-u-align-center">Related Articles</h5><div class="mdc-u-grid mdc-u-grid-col-md-3 RelatedArticle_items-container__s2uD0"><div class="mdc-u-grid mdc-u-grid-gutter-lg Card_card__diA2r Card_hover-effect__RGb9b"><div class="Card_wrapper-image__8b4P6"><a data-component="mdc-c-link" href="/capabilities/people-and-organizational-performance/our-insights/elevating-learning-and-development-insights-and-practical-guidance-from-the-field" class="mdc-c-link___lBbY1_2734c4f"><picture data-component="mdc-c-picture" class="Card_wrapper-image__8b4P6"><style>.picture-uniqueKey-eleva-0 { aspect-ratio: 16/9 }</style><img alt="Elevating Learning & Development: Insights and Practical Guidance from the Field" class="picture-uniqueKey-eleva-0" src="/~/media/mckinsey/business%20functions/people%20and%20organizational%20performance/our%20insights/elevating%20learning%20and%20development/elevating-learning-development_thumb-book_1536x1536.jpg?cq=50&mw=767&car=16:9&cpy=Center" loading="lazy"/></picture></a></div><div class="Card_wrapper-text__U6Y3k"><div data-component="mdc-c-content-block" class="mdc-c-content-block___7p6Lu_2734c4f Card_content-block__pF6Z1"><span>Book - 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<i>McKinsey Quarterly</i></span><h6 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_2734c4f mdc-u-ts-6"><a data-component="mdc-c-link" href="/capabilities/people-and-organizational-performance/our-insights/putting-lifelong-learning-on-the-ceo-agenda" class="mdc-c-link-heading___Zggl8_2734c4f mdc-c-link___lBbY1_2734c4f"><div>Putting lifelong learning on the CEO agenda</div></a></h6></div></div></div></div></div></div></div></main></div><script id="__NEXT_DATA__" type="application/json">{"props":{"pageProps":{"locale":"en","dictionary":{},"sitecoreContext":{"route":{"name":"The essential components of a successful L and D strategy","displayName":"The essential components of a successful L and D strategy","fields":null,"databaseName":"web","deviceId":"fe5d7fdf-89c0-4d99-9aa3-b5fbd009c9f3","itemId":"023e5571-8dfe-4791-8846-df70ea30c266","itemLanguage":"en","itemVersion":1,"layoutId":"ae753eb4-a035-40b4-83bf-4b4438df6742","templateId":"683910db-02ba-40ba-92e7-726c880160a9","templateName":"ArticleJSS","placeholders":{"jss-main":[{"uid":"232bb7e9-289f-492d-a916-2b6185e44a84","componentName":"ArticleTemplate","dataSource":"","fields":{"data":{"articleTemplate":{"title":{"jsonValue":{"value":"The essential components of a successful L\u0026amp;D strategy"}},"sEOTitle":{"value":"Essential components of a learning and development strategy"},"description":{"jsonValue":{"value":"The ACADEMIES framework is a useful tool for conceptualizing learning strategy."}},"sEODescription":{"value":"The ACADEMIES framework is a useful tool for conceptualizing a learning and development strategy."},"displayDate":{"jsonValue":{"value":"2019-02-13T00:00:00Z"}},"body":{"value":"[[DownloadsSidebar]] \u003cp\u003e\u003cstrong\u003eOver the past decade,\u003c/strong\u003e the global workforce has been continually evolving because of a number of factors. An increasingly competitive business landscape, rising complexity, and the digital revolution are reshaping the mix of employees. Meanwhile, persistent uncertainty, a multigenerational workforce, and a shorter shelf life for knowledge have placed a premium on reskilling and upskilling. The shift to a digital, knowledge-based economy means that a vibrant workforce is more important than ever: research suggests that a very significant percentage of market capitalization in public companies is based on intangible assets\u0026mdash;skilled employees, exceptional leaders, and knowledge.[[footnote 1]]\u003c/p\u003e\n[[sidebar 1]]\n\u003cp\u003eAll of these trends have elevated the importance of the learning-and-development (L\u0026amp;D) function. We undertook several phases of research to understand trends and current priorities in L\u0026amp;D (see sidebar, \u0026ldquo;Learning and development\u0026mdash;From evolution to revolution\u0026rdquo;). Our efforts highlighted how the L\u0026amp;D function is adapting to meet the changing needs of organizations, as well as the growing levels of investment in professional development.\u003c/p\u003e\n\u003cp\u003eTo get the most out of investments in training programs and curriculum development, L\u0026amp;D leaders must embrace a broader role within the organization and formulate an ambitious vision for the function. An essential component of this effort is a comprehensive, coordinated strategy that engages the organization and encourages collaboration. The ACADEMIES\u0026copy; framework, which consists of nine dimensions of L\u0026amp;D, can help to strengthen the function and position it to serve the organization more effectively.\u003c/p\u003e\n\u003ch2\u003eThe strategic role of L\u0026amp;D\u003c/h2\u003e\n\u003cp\u003eOne of L\u0026amp;D\u0026rsquo;s primary responsibilities is to manage the development of people\u0026mdash;and to do so in a way that supports other key business priorities. L\u0026amp;D\u0026rsquo;s strategic role spans five areas (Exhibit 1).[[footnote 2]]\u003c/p\u003e\n[[exhibit 1]]\n\u003col\u003e\n \u003cli\u003e\u003cem\u003eAttract and retain talent.\u003c/em\u003e Traditionally, learning focused solely on improving productivity. Today, learning also contributes to employability. Over the past several decades, employment has shifted from staying with the same company for a lifetime to a model where workers are being retained only as long as they can add value to an enterprise. Workers are now in charge of their personal and professional growth and development\u0026mdash;one reason that people list \u0026ldquo;opportunities for learning and development\u0026rdquo; among the top criteria for joining an organization. Conversely, a lack of L\u0026amp;D is one of the key reasons people cite for leaving a company.\u003c/li\u003e\n \u003cli\u003e\u003cem\u003eDevelop people capabilities.\u003c/em\u003e Human capital requires ongoing investments in L\u0026amp;D to retain its value. When knowledge becomes outdated or forgotten\u0026mdash;a more rapid occurrence today\u0026mdash;the value of human capital declines and needs to be supplemented by new learning and relevant work experiences.[[footnote 3]] Companies that make investments in the next generation of leaders are seeing an impressive return. Research indicates that companies in the top quartile of leadership outperform other organizations by nearly two times on earnings before interest, taxes, depreciation, and amortization (EBITDA). Moreover, companies that invest in developing leaders during significant transformations are \u003ca href=\"/sitecore/service/notfound.aspx?item=web%3a%7b9b6cb4e2-6eae-4a23-ba98-6974d5ca7856%7d%40en\"\u003e2.4 times more likely to hit their performance targets\u003c/a\u003e.[[footnote 4]]\u003c/li\u003e\n \u003cli\u003e\u003cem\u003eCreate a values-based culture.\u003c/em\u003e As the workforce in many companies becomes increasingly virtual and globally dispersed, L\u0026amp;D can help to build a values-based culture and a sense of community. In particular, millennials are particularly interested in working for values-based, sustainable enterprises that contribute to the welfare of society.\u003c/li\u003e\n \u003cli\u003e\u003cem\u003eBuild an employer brand.\u003c/em\u003e An organization\u0026rsquo;s brand is one of its most important assets and conveys a great deal about the company\u0026rsquo;s success in the market, financial strengths, position in the industry, and products and services. Investments in L\u0026amp;D can help to enhance company\u0026rsquo;s brand and boost its reputation as an \u0026ldquo;employer of choice.\u0026rdquo; As large segments of the workforce prepare to retire, employers must work harder to compete for a shrinking talent pool. To do so, they must communicate their brand strength explicitly through an employer value proposition.\u003c/li\u003e\n \u003cli\u003e\u003cem\u003eMotivate and engage employees.\u003c/em\u003e The most important way to engage employees is to provide them with opportunities to learn and develop new competencies. Research suggests that lifelong learning contributes to happiness.[[footnote 5]] When highly engaged employees are challenged and given the skills to grow and develop within their chosen career path, they are more likely to be energized by new opportunities at work and satisfied with their current organization.\u003c/li\u003e\n\u003c/ol\u003e\n\u003ch2\u003eThe L\u0026amp;D function in transition\u003c/h2\u003e\n\u003cp\u003eOver the years, we have identified and field-tested nine dimensions that contribute to a strong L\u0026amp;D function. We combined these dimensions to create the ACADEMIES framework, which covers all aspects of L\u0026amp;D functions, from setting aspirations to measuring impact (Exhibit 2). Although many companies regularly execute on several dimensions of this framework, our recent research found that only a few companies are fully mature in all dimensions.\u003c/p\u003e\n[[exhibit 2]]\n\u003ch3\u003e1. Alignment with business strategy\u003c/h3\u003e\n\u003cp\u003eOne of an L\u0026amp;D executive\u0026rsquo;s primary tasks is to develop and shape a learning strategy based on the company\u0026rsquo;s business and talent strategies. The learning strategy seeks to support professional development and build capabilities across the company, on time, and in a cost-effective manner. In addition, the learning strategy can enhance the company culture and encourage employees to live the company\u0026rsquo;s values.\u003c/p\u003e\n\u003cp\u003eFor many organizations, the L\u0026amp;D function supports the implementation of the business strategy. For example, if one of the business strategies is a digital transformation, L\u0026amp;D will focus on building the necessary people capabilities to make that possible.\u003c/p\u003e\n\u003cp\u003eEvery business leader would agree that L\u0026amp;D must align with a company\u0026rsquo;s overall priorities. Yet research has found that many L\u0026amp;D functions fall short on this dimension. Only 40 percent of companies say that their learning strategy is aligned with business goals.[[footnote 6]] For 60 percent, then, learning has no explicit connection to the company\u0026rsquo;s strategic objectives. L\u0026amp;D functions may be out of sync with the business because of outdated approaches or because budgets have been based on priorities from previous years rather than today\u0026rsquo;s imperatives, such as a digital transformation.\u003c/p\u003e\n[[disruptor1Up dis1]]\n\u003cp\u003eTo be effective, L\u0026amp;D must take a hard look at employee capabilities and determine which are most essential to support the execution of the company\u0026rsquo;s business strategy. L\u0026amp;D leaders should reevaluate this alignment on a yearly basis to ensure they are creating a people-capability agenda that truly reflects business priorities and strategic objectives.\u003c/p\u003e\n\u003ch3\u003e2. Co-ownership between business units and HR\u003c/h3\u003e\n\u003cp\u003eWith new tools and technologies constantly emerging, companies must become more agile, ready to adapt their business processes and practices. L\u0026amp;D functions must likewise be prepared to rapidly launch capability-building programs\u0026mdash;for example, if new business needs suddenly arise or staff members require immediate training on new technologies such as cloud-based collaboration tools.\u003c/p\u003e\n\u003cp\u003eL\u0026amp;D functions can enhance their partnership with business leaders by establishing a governance structure in which leadership from both groups share responsibility for defining, prioritizing, designing, and securing funds for capability-building programs. Under this governance model, a company\u0026rsquo;s chief experience officer (CXO), senior executives, and business-unit heads will develop the people-capability agenda for segments of the enterprise and ensure that it aligns with the company\u0026rsquo;s overall strategic goals. Top business executives will also help firmly embed the learning function and all L\u0026amp;D initiatives in the organizational culture. The involvement of senior leadership enables full commitment to the L\u0026amp;D function\u0026rsquo;s longer-term vision.\u003c/p\u003e\n\u003ch3\u003e3. Assessment of capability gaps and estimated value\u003c/h3\u003e\n\u003cp\u003eAfter companies identify their business priorities, they must verify that their employees can deliver on them\u0026mdash;a task that may be more difficult than it sounds. Some companies make no effort to assess employee capabilities, while others do so only at a high level. Conversations with L\u0026amp;D, HR, and senior executives suggest that many companies are ineffective or indifferent at assessing capability gaps, especially when it comes to senior leaders and midlevel managers.\u003c/p\u003e\n\u003cp\u003eThe most effective companies take a deliberate, systematic approach to capability assessment. At the heart of this process is a comprehensive competency or capability model based on the organization\u0026rsquo;s strategic direction. For example, a key competency for a segment of an e-commerce company\u0026rsquo;s workforce could be \u0026ldquo;deep expertise in big data and predictive analytics.\u0026rdquo;\u003c/p\u003e\n\u003cp\u003eAfter identifying the most essential capabilities for various functions or job descriptions, companies should then assess how employees rate in each of these areas. L\u0026amp;D interventions should seek to close these capability gaps.\u003c/p\u003e\n\u003ch3\u003e4. Design of learning journeys\u003c/h3\u003e\n\u003cp\u003eMost corporate learning is delivered through a combination of digital-learning formats and in-person sessions. While our research indicates that immersive L\u0026amp;D experiences in the classroom still have immense value, leaders have told us that they are incredibly busy \u0026ldquo;from eight to late,\u0026rdquo; which does not give them a lot of time to sit in a classroom. Furthermore, many said that they prefer to develop and practice new skills and behaviors in a \u0026ldquo;safe environment,\u0026rdquo; where they don\u0026rsquo;t have to worry about public failures that might affect their career paths.\u003c/p\u003e\n\u003cp\u003eTraditional L\u0026amp;D programs consisted of several days of classroom learning with no follow-up sessions, even though people tend to forget what they have learned without regular reinforcement. As a result, many L\u0026amp;D functions are moving away from stand-alone programs by designing learning journeys\u0026mdash;continuous learning opportunities that take place over a period of time and include L\u0026amp;D interventions such as fieldwork, pre- and post-classroom digital learning, social learning, on-the-job coaching and mentoring, and short workshops. The main objectives of a learning journey are to help people develop the required new competencies in the most effective and efficient way and to support the transfer of learning to the job.\u003c/p\u003e\n\u003ch3\u003e5. Execution and scale-up\u003c/h3\u003e\n\u003cp\u003eAn established L\u0026amp;D agenda consists of a number of strategic initiatives that support capability building and are aligned with business goals, such as helping leaders develop high-performing teams or roll out safety training. The successful execution of L\u0026amp;D initiatives on time and on budget is critical to build and sustain support from business leaders.\u003c/p\u003e\n\u003cp\u003eL\u0026amp;D functions often face an overload of initiatives and insufficient funding. L\u0026amp;D leadership needs to maintain an ongoing discussion with business leaders about initiatives and priorities to ensure the requisite resources and support.\u003c/p\u003e\n\u003cp\u003eMany new L\u0026amp;D initiatives are initially targeted to a limited audience. A successful execution of a small pilot, such as an online orientation program for a specific audience, can lead to an even bigger impact once the program is rolled out to the entire enterprise. The program\u0026rsquo;s cost per person declines as companies benefit from economies of scale.\u003c/p\u003e\n\u003ch3\u003e6. Measurement of impact on business performance\u003c/h3\u003e\n\u003cp\u003eA learning strategy\u0026rsquo;s execution and impact should be measured using key performance indicators (KPIs). The first indicator looks at business excellence: how closely aligned all L\u0026amp;D initiatives and investments are with business priorities. The second KPI looks at learning excellence: whether learning interventions change people\u0026rsquo;s behavior and performance. Last, an operational-excellence KPI measures how well investments and resources in the corporate academy are used.\u003c/p\u003e\n\u003cp\u003eAccurate measurement is not simple, and many organizations still rely on traditional impact metrics such as learning-program satisfaction and completion scores. But high-performing organizations focus on outcomes-based metrics such as impact on individual performance, employee engagement, team effectiveness, and business-process improvement.\u003c/p\u003e\n\u003cp\u003eWe have identified several lenses for articulating and measuring learning impact:\u003c/p\u003e\n\u003cul\u003e\n \u003cli\u003eStrategic alignment: How effectively does the learning strategy support the organization\u0026rsquo;s priorities?\u003c/li\u003e\n \u003cli\u003eCapabilities: How well does the L\u0026amp;D function help colleagues build the mind-sets, skills, and expertise they need most? This impact can be measured by assessing people\u0026rsquo;s capability gaps against a comprehensive competency framework.\u003c/li\u003e\n \u003cli\u003eOrganizational health: To what extent does learning strengthen the overall health and DNA of the organization? Relevant dimensions of the McKinsey \u003ca href=\"/solutions/orgsolutions/overview/organizational-health-index\"\u003eOrganizational Health Index\u003c/a\u003e can provide a baseline.\u003c/li\u003e\n \u003cli\u003eIndividual peak performance: Beyond raw capabilities, how well does the L\u0026amp;D function help colleagues achieve maximum impact in their role while maintaining a healthy work-life balance?\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003eAccess to big data provides L\u0026amp;D functions with more opportunities to assess and predict the business impact of their interventions.\u003c/p\u003e\n\u003ch3\u003e7. Integration of L\u0026amp;D interventions into HR processes\u003c/h3\u003e\n\u003cp\u003eJust as L\u0026amp;D corporate-learning activities need to be aligned with the business, they should also be an integral part of the HR agenda. L\u0026amp;D has an important role to play in recruitment, onboarding, performance management, promotion, workforce, and succession planning. Our research shows that at best, many L\u0026amp;D functions have only loose connections to annual performance reviews and lack a structured approach and follow-up to performance-management practices.\u003c/p\u003e\n\u003cp\u003eL\u0026amp;D leadership must understand major HR management practices and processes and collaborate closely with HR leaders. The best L\u0026amp;D functions use consolidated development feedback from performance reviews as input for their capability-building agenda. A growing number of companies are replacing annual performance appraisals with frequent, in-the-moment feedback.[[footnote 7]] This is another area in which the L\u0026amp;D function can help managers build skills to provide development feedback effectively.\u003c/p\u003e\n[[disruptor1Up dis2]]\n\u003cp\u003eAnother example is onboarding. Companies that have developed high-impact onboarding processes score better on employee engagement and satisfaction and lose fewer new hires.[[footnote 8]] The L\u0026amp;D function can play a critical role in onboarding\u0026mdash;for example, by helping people build the skills to be successful in their role, providing new hires with access to digital-learning technologies, and connecting them with other new hires and mentors.\u003c/p\u003e\n\u003ch3\u003e8. Enabling of the 70:20:10 learning framework\u003c/h3\u003e\n\u003cp\u003eMany L\u0026amp;D functions embrace a framework known as \u0026ldquo;70:20:10,\u0026rdquo; in which 70 percent of learning takes place on the job, 20 percent through interaction and collaboration, and 10 percent through formal-learning interventions such as classroom training and digital curricula. These percentages are general guidelines and vary by industry and organization. L\u0026amp;D functions have traditionally focused on the formal-learning component.\u003c/p\u003e\n\u003cp\u003eToday, L\u0026amp;D leaders must design and implement interventions that support informal learning, including coaching and mentoring, on-the-job instruction, apprenticeships, leadership shadowing, action-based learning, on-demand access to digital learning, and lunch-and-learn sessions. Social technologies play a growing role in connecting experts and creating and sharing knowledge.\u003c/p\u003e\n\u003ch3\u003e9. Systems and learning technology applications\u003c/h3\u003e\n\u003cp\u003eThe most significant enablers for just-in-time learning are technology platforms and applications. Examples include next-generation learning-management systems, virtual classrooms, mobile-learning apps, embedded performance-support systems, polling software, learning-video platforms, learning-assessment and -measurement platforms, massive open online courses (MOOCs), and small private online courses (SPOCs), to name just a few.\u003c/p\u003e\n\u003cp\u003eThe learning-technology industry has moved entirely to cloud-based platforms, which provide L\u0026amp;D functions with unlimited opportunities to plug and unplug systems and access the latest functionality without having to go through lengthy and expensive implementations of an on-premises system. L\u0026amp;D leaders must make sure that learning technologies fit into an overall system architecture that includes functionality to support the entire talent cycle, including recruitment, onboarding, performance management, L\u0026amp;D, real-time feedback tools, career management, succession planning, and rewards and recognition.\u003c/p\u003e\n\u003chr /\u003e\n\u003cp\u003eL\u0026amp;D leaders are increasingly aware of the challenges created by the fourth industrial revolution (technologies that are connecting the physical and digital worlds), but few have implemented large-scale transformation programs. Instead, most are slowly adapting their strategy and curricula as needed. However, with technology advancing at an ever-accelerating pace, L\u0026amp;D leaders can delay no longer: human capital is more important than ever and will be the primary factor in sustaining competitive advantage over the next few years.\u003c/p\u003e\n\u003cp\u003eThe leaders of L\u0026amp;D functions need to revolutionize their approach by creating a learning strategy that aligns with business strategy and by identifying and enabling the capabilities needed to achieve success. This approach will result in robust curricula that employ every relevant and available learning method and technology. The most effective companies will invest in innovative L\u0026amp;D programs, remain flexible and agile, and build the human talent needed to master the digital age.\u003c/p\u003e\n\u003cp\u003eThese changes entail some risk, and perhaps some trial and error, but the rewards are great.\u003c/p\u003e\n\u003cp\u003e\u003cem\u003eA version of this chapter was published in TvOO Magazine in September 2016. It is also included in\u003c/em\u003e \u003ca href=\"/capabilities/people-and-organizational-performance/our-insights/elevating-learning-and-development-insights-and-practical-guidance-from-the-field\"\u003eElevating Learning \u0026amp; Development: Insights and Practical Guidance from the Field\u003c/a\u003e\u003cem\u003e, August 2018.\u003c/em\u003e\u003c/p\u003e\n[[DisruptorSignUp full-width]]"},"isFullScreenInteractive":{"boolValue":false},"hideStickySocialShareBar":{"boolValue":false},"desktopID":{"value":""},"mobileID":{"value":""},"desktopURL":{"value":""},"mobileURL":{"value":""},"desktopPaddingPercentage":{"value":""},"mobilePaddingPercentage":{"value":""},"desktopOverrideHeight":{"value":""},"mobileOverrideHeight":{"value":""},"cerosOembedURL":{"value":""},"cerosRenderMode":{"targetItem":null},"cerosBackgroundColor":{"targetItem":null},"hideByLine":{"boolValue":false},"tableOfContentsTitle":{"value":"TABLE OF CONTENTS"},"accessStatus":{"targetItem":{"key":{"value":"RegisteredUsers"},"value":{"value":"Registered Users"}}},"articleType":{"targetItem":{"displayName":"Article"}},"hasSpecialReport":{"boolValue":false},"contentType":{"targetItem":{"displayName":"Article"}},"sourcePublication":{"targetItem":null},"externalPublication":{"value":""},"mobileReady":{"boolValue":true},"forClientsOnly":{"boolValue":false},"excludeFromClientLink":{"boolValue":false},"originalPublishDate":{"jsonValue":{"value":"2019-02-13T00:00:00Z"}},"footnotes":{"value":"\u003col\u003e\n \u003cli\u003eIntangible Asset Market Value Study, Ocean Tomo.\u003c/li\u003e\n \u003cli\u003eNick van Dam, \u003cem\u003e25 Best Practices in Learning \u0026amp; Talent Development\u003c/em\u003e, second edition, Raleigh, NC: Lulu Publishing, 2008.\u003c/li\u003e\n \u003cli\u003eGary S. Becker, \u0026ldquo;Investment in human capital: A theoretical analysis,\u0026rdquo; \u003cem\u003eJournal of Political Economy\u003c/em\u003e, 1962, Volume 70, Number 5, Part 2, pp. 9\u0026ndash;49, jstor.org.\u003c/li\u003e\n \u003cli\u003e\u0026ldquo;\u003ca href=\"/featured-insights/employment-and-growth/economic-conditions-snapshot-june-2009-mckinsey-global-survey-results\"\u003eEconomic Conditions Snapshot, June 2009: McKinsey Global Survey results\u003c/a\u003e,\u0026rdquo; June 2009.\u003c/li\u003e\n \u003cli\u003eJohn Coleman, \u0026ldquo;Lifelong learning is good for your health, your wallet, and your social life,\u0026rdquo; \u003cem\u003eHarvard Business Review\u003c/em\u003e, February 7, 2017, hbr.org.\u003c/li\u003e\n \u003cli\u003eHuman Capital Management Excellence Conference 2018, Brandon Hall Group.\u003c/li\u003e\n \u003cli\u003e\u003cem\u003eHCM outlook 2018\u003c/em\u003e, Brandon Hall Group.\u003c/li\u003e\n \u003cli\u003e\u003cem\u003eHCM outlook 2018\u003c/em\u003e, Brandon Hall Group.\u003c/li\u003e\n\u003c/ol\u003e"},"contributoryPractice":{"targetItems":[{"displayName":"People \u0026amp; Organizational Performance"}]},"aboutTheAuthors":{"value":"\u003cp\u003e\u003cstrong\u003eJacqueline Brassey\u003c/strong\u003e is director of Enduring Priorities Learning in McKinsey\u0026rsquo;s Amsterdam office, where \u003cstrong\u003eNick van Dam\u003c/strong\u003e is an alumnus and senior adviser to the firm as well as professor and chief of the IE University (Madrid) Center for Learning Innovation; \u003cstrong\u003eLisa Christensen\u003c/strong\u003e is a senior learning expert in the San Francisco office.\u003c/p\u003e"},"authors":{"targetItems":[{"template":{"id":"3FBABDB63A094F68B1F8E1BBE1BA124E","name":"Author"},"id":"EA1C5F0700D847CEB08A6C78D35EF381","name":"Jacqueline Brassey","authorTitle":{"value":"Jacqueline Brassey"},"description":{"value":"Core researcher and practitioner in the field of sustainable human performance helping executives and organizations thrive by promoting improved mental health, well-being, agility, and resilience"},"thumbnailImage":{"alt":"","src":null},"profile":{"targetItems":[{"standardImage":{"src":"/~/media/mckinsey/our people/jacqueline brassey/jb_fc_mask_profile_1536x1152.jpg","alt":"Jacqueline Brassey"},"emailLinks":{"value":""},"linkedInUrl":{"value":"https://www.linkedin.com/in/jacquibrassey/"},"description":{"value":"Coleader of Healthy Workforces and Director of Research Science at the McKinsey Health Institute, passionate about helping individuals and organizations thrive by promoting improved mental health, well-being, agility, and resilience."},"locations":{"targetItems":[{"name":"Luxembourg","displayName":"Luxembourg"}]},"firmTitle":{"value":"Senior Fellow, MHI"},"thumbnailImage":{"alt":"Jacqueline Brassey","src":"/~/media/mckinsey/our people/jacqueline brassey/jb_fc-mask_headshot_988x741.jpg"},"url":{"path":"/our-people/jacqueline-brassey"}}]}},{"template":{"id":"3FBABDB63A094F68B1F8E1BBE1BA124E","name":"Author"},"id":"08B45F69F41A454C973AF7238D66EAF6","name":"Lisa Christensen","authorTitle":{"value":"Lisa Christensen"},"description":{"value":"Lisa Christensen is a director of learning in McKinsey’s Learning Design COE, coleader of McKinsey’s Research and Innovation Learning Lab, and is based in the Southern California office"},"thumbnailImage":{"alt":"Headshot of Lisa Christensen","src":"/~/media/mckinsey/featured insights/people in progress blog/authors/lisa christensen.png"},"profile":{"targetItems":[]}},{"template":{"id":"3FBABDB63A094F68B1F8E1BBE1BA124E","name":"Author"},"id":"F9A6DF64EC664E1793B1FAC2366605A6","name":"Nick van Dam","authorTitle":{"value":"Nick van Dam"},"description":{"value":""},"thumbnailImage":{"alt":"","src":null},"profile":{"targetItems":[]}}]},"nonPartnerAuthors":{"targetItems":[]},"interactiveToUse":{"targetItem":null},"enableArticleComponents":{"boolValue":false},"relatedArticles":{"targetItems":[{"sourcePublication":null,"publicationSource":null,"externalPublication":null,"title":{"value":"Elevating Learning \u0026amp; 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Seven practices can help them be mindful in their career path and achieve success."},"standardImage":{"src":"/~/media/mckinsey/business functions/people and organizational performance/our insights/seven essential elements of a lifelong learning mind set/seven-essential_1536x1536_400.jpg","alt":"Seven essential elements of a lifelong-learning mind-set"},"heroImage":null,"thumbnailImage":null},{"sourcePublication":{"targetItem":{"name":"McKinsey Quarterly"}},"publicationSource":null,"externalPublication":{"value":""},"title":{"value":"Putting lifelong learning on the CEO agenda"},"url":{"path":"/capabilities/people-and-organizational-performance/our-insights/putting-lifelong-learning-on-the-ceo-agenda"},"eyebrow":{"targetItem":{"name":"Commentary"}},"articleType":{"targetItem":{"name":"Commentary"}},"contentType":{"targetItem":{"name":"Article"}},"description":{"value":"In an open letter to business leaders, a Harvard Business School professor and a learning engineer at the Chan 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