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THE PURPOSE OF THE CHAPTER
The purpose of this five-part chapter is to explain how L&D activity can add value to an
organisation (SLIDES 1 and 2). I use both Porter’s Value Chain model and Green’s ‘Align,
engage and measure’ framework to demonstrate different ways in which L&D practitioners can
identify where and how to add value.
CLARIFYING ‘ADDED VALUE’
‘BEST VALUE’ AND ‘ADDED VALUE’: WHAT IS THE DIFFERENCE?
I have preceded this section with a Reflection. It could be used to stimulate class discussion in
order to discover the differing perceptions students hold about the relationship between L&D
and adding value and what the latter task involves.
Taking your own or some other organisation with which you are familiar, consider
how you would decide where and how L&D activity could add greatest value to that
To add value is to make a difference where it matters most (SLIDE 3). In their (2005) book
The HR Value Proposition Ulrich and Brockbank argue that value is defined by the receivers of
HR work. The same holds true in an L&D context: delivering value is about responding
effectively to the needs and expectations of stakeholders, not about evaluating L&D inputs or
the achievement of learning objectives per se. The case of Procon Manufacturing UK narrated
in Chapter 8 is a detailed example of how to work in partnership in order to decide where and
how to add value through L&D activity. The following case is another, much briefer, example.
THE VALUE OF LEARNING AT LYRECO
Effective people development and learning strategies have been vital to the growth of
Lyreco UK, part of a large family-owned office supplies group operating in Europe,
Canada and Asia. ... Developing leaders and teams, and becoming an employer of choice
have ... been key components of the company’s successful drive to increase market share.
Lyreco, one of the organisations taking part in the CIPD/University of Portsmouth
research, manages to align learning activities to strategic priorities largely because its
training and development director is in the senior management team, alongside HR and
reporting directly to the managing director. In this way the learning function contributes
to a five-year planning process and the creation of the business plan for the current year.
Metrics are a central part of all management processes at Lyreco and these inform the
learning investment and planning processes. In field sales, for example, measures include
sales turnover, margin and new business, while in customer service they include
abandoned call rate, average call time and average wait time. Monthly performance
results in all areas are scrutinised to identify areas for attention, and the learning and
development team runs learning sessions and activities aimed at helping people to
improve their performance and make good the promise the company makes to its
customers: ‘Yours tomorrow or yours free’.
Source: extracts from M. Sloman (2008) People Management, 29 November, pp32–4. With permission of
THE VALUE CHAIN MODEL
THE VALUE CHAIN OF THE FIRM
Porter’s value chain model, its strengths and weaknesses, continues to form a central topic in
business strategy courses (SLIDE 4). Using it here as an approach for L&D practitioners to
adopt in order to determine where to add value should therefore help students to see the strong
links that should exist between business strategy and L&D outcomes. Those already familiar
with the model should explain in class session their own views about how best to apply it to the
L&D field, in order to aid transfer of their learning to an L&D context and provide insights for
It may also be helpful to provide here a more detailed explanation of the Five Partners Model
described in the case example in this subsection. The case is relevant to the content of Chapter
14 because of the attention it draws to the importance of identifying and working with key
stakeholders in the firm’s (in this case external) value chain in order to achieve shared ends and
FRANCE TELECOM AND THE FIVE PARTNERS MODEL
At the time when D’Cruz and Rugman wrote their article, France Telecom was a French
service-provider, state-owned since 1991. It subsequently became one of the world’s
leading telecommunications operators and is now ‘France Telecom Group’ (groupe
France Télécom). Orange, with its mission of ‘Together we can do more’, is its key
brand, serving two thirds of its customers.
During the 1990s FT developed its Five Partners Model as ‘a co-operation-based
framework for organising economic activity to create international competitiveness for
globally-oriented firms’ (D’Cruz and Rugman: 59). The structure was geared to sharing
and accessing resources with partner organisations and provided a contrast with the
multi-divisional structure widely used by multinational firms. FT’s chosen partners were
its key suppliers, customers and competitors, and the non-business infrastructure. The
latter comprised non-traded service sectors, government, education, healthcare, social
services and not-for-profit cultural industries.
Organising for expanded scope and expertise and for mutual benefit
FT’s approach was (and still is) based on the assumption that business performance can
benefit from co-operative forms of organising where partners’ commitment to a common
purpose overrides any tendency to purely opportunistic behaviour. As explained in the
chapter, FT as the flagship firm had the strategic leadership role, while the partners
carried much of the responsibility to execute and operationalise the network’s strategy.
Each partner had a clear role related to a shared purpose that had initially brought them
together, and all gained benefits from the partnership.
A model of this kind operates as below:
The flagship firm provides strategic vision and direction related to the network’s
shared purpose. It carries the primary responsibility for determining the markets to
be served, the products and services to be produced, and the benchmarking of
network activities and processes to ensure that they meet global standards.
Chosen suppliers carry much of the production responsibility, gaining in return a
greater share of the value-added in the product service, and a greater than normal
amount of business from the flagship firm.
Chosen customers supply input to strategies and gain in return access to those
strategies and the benefits of the flagship’s leadership in regard to the area of each
customer’s business that the flagship supplies.
Chosen competitors participate in mutually beneficial market-sharing arrangements,
joint research and development projects, co-operative training ventures and
suppliers’ development projects.
The non-business infrastructure that supplies much of the human and technological
capital for the network gains in return funding from the flagship and can also gain
physical space and human resources.
Source: J. R. D’Cruz and A. M. Rugman (1994) http://www.francetelecom.com [accessed 4 December
ALIGN, ENGAGE AND MEASURE: ALIGNING THE PEOPLE
This section introduces Green’s (1999) three-stage framework for adding value and discusses
and illustrates various ways in which the first stage – alignment – can be aided by L&D activity
(SLIDE 5). That discussion is detailed and I have no further comments to add here, other than
to point out that the material in Chapter 8 (the Procon management development case) offers
further illustration of the power of strategically-focused collaborative L&D interventions to
‘point people in the right direction’.
ENGAGING THE PEOPLE
WHAT IS ‘ENGAGEMENT’?
It would be useful at the start of any discussion on ‘engagement’ to find out what students think
the term means in a practical sense. The reason for my lengthy discussion in this section is that
it seems currently to mean all things to all people, with confusing outcomes. I chose the
definition in the text because it has a sound research base (SLIDE 3).
MOTIVATION, SATISFACTION AND COMMITMENT
In this subsection my purpose is to ensure that readers clearly distinguish between three
phenomena that, although in their different ways related to engagement, in no one case equate
with it. It may be helpful at this point to involve students in the following exercise, whether on
an individual basis or as a group task.
ASSESSING A ‘MODEL’ OF EMPLOYEE ENGAGEMENT
To increase awareness of factors relating to employee engagement.
The BCL ‘model of employee engagement’
In 2001 Best Companies Ltd (BCL) produced its first-ever ‘Best Companies in the UK’
list. Over the next seven years it ‘rigorously developed’ what it claims to be a ‘model of
engagement’ that is also used to produce the Sunday Times list of 100 Best Companies to
Work For. It focuses on eight factors that BCL on its website sees from its ‘year-on-year
statistical analysis’ to be ‘fundamental in driving employee satisfaction and engagement
with employers’. When a company applies for BCL accreditation, BCL confidentially
ask employees of that organisation 16 key questions, which are central to the eight
factors. From answers given, BCL then ranks each organisation and produces a Best
Companies Index (BCI) score. The eight factors and a summary of the way they are
described on the website are as follows:
Identified as ‘the factor that influences employee engagement the most’, this factor
concerns the extent to which leaders and senior management listen to staff, how far
senior management actions and style reflect the values of the organisation, and how the
leadership communicates with employees.
This factor focuses on how much people value their company and whether they are
encouraged to provide ideas for its wider development.
This factor concerns whether employees feel they have opportunities to learn and to
further their careers in the company, and whether they have regular performance reviews.
This factor focuses on the employees’ working relationship with their managers, on
management training, and on the support that managers give their staff.
This factor concerns how far the company promotes a team environment and provides
opportunities for team interactions across the organisation.
GIVING SOMETHING BAC K
This factor explores how much people think their employers put back into society, both
locally and more widely, and whether the company supports employees in charitable
This factor measures how well employees are treated in terms of pay and benefits
compared to similar organisations.
This factor concerns the importance of ‘happy employees’. It measures stress, pressure,
the balance between work and home life and the impact they have on personal health and
Source: BCL’s website http://www.bestcompaniesguide.co.uk [accessed 4 December 2008]
The research-based definition of ‘employee engagement’ given in Chapter 14 is:
Employee engagement refers to employees’ willingness and capability to ‘go the extra
mile’ in working for the organisation and its goals.
1 Use this definition to determine whether the ‘model’ described above is in reality one
that enables employee engagement to be measured.
2 Then prepare a presentation of your analysis and conclusion for plenary discussion.
As far as we can tell from the information that BCL provides, the ‘model’ is not sufficient to
measure employee engagement. This is because although it does focus strongly on factors that
help to produce employee satisfaction with and commitment to the organisation, it makes no
specific mention of measures related to their willingness to ‘go the extra mile’ for their
organisation, of their capability and opportunities to do so, or of their understanding of and
support for its business goals.
MEASURING THE DATA
PAY-BACK AND PAY-FORWARD MEASURES
In this subsection I refer to the CIPD’s ‘return on expectations’ approach to measuring the
value of the learning investment (Anderson, 2007). The researchers at the University of
Portsmouth Business School who developed this approach in their report for the CIPD
identified four different ways in use to assess the contribution that learning makes in
organisations today (SLIDE 6):
learning function efficiency measures – These are used to assess the efficiency and
effectiveness of the learning function. The researchers found them to be popular with L&D
professionals but not with senior managers
key performance indicators and benchmark measures – These are used to evaluate HR
processes and performance through a comparison with external standards. However, this
approach says nothing about the impact of HR activity on the organisation
return on investment (ROI) measures – These are used to establish the economic benefits
of specific learning and training interventions compared with their costs – helpful in
assessing cost-efficiency but not the best indicator for establishing the value to the
organisation of its entire learning investment
return on expectation measures – These are used to assess how far the benefits that
stakeholders expected would be achieved by a learning investment have been realised. The
measures form the basis of the CIPD’s Learning Evaluation toolkit mentioned in the
chapter. They call for (Sloman, 2007: 33):
a wide-ranging approach that involves aligning learning processes and investme nt
with the organisation’s strategic priorities, and establishing, through dialogue with
senior decision-makers, what are the most relevant evaluation methods for the
organisation. ... The key challenge is to understand and respond to the legitimate
expectations that key stakeholders, especially senior managers, have in relation to
the strategic value of learning.
TASKS FOR L&D PROFESSIONALS
The Annex to the notes on this chapter (at the end of this section) contains a questionnaire that
students could complete in order to provide material for a final class session on ‘adding value’.
Most of the questions require the collection of information that will provide a convincing
evidence base, so it is best to set this task in advance of the related class session – or to use it as
the basis for coursework. Students may not be able to find all the information that they need,
but vital learning points of the exercise should be that their assessment must not be based on
guesswork and that anecdotes and allegations do not constitute evidence.
CHAPTER REVIEW QUESTIONS
Review Question 1
Explain the key factors in your organisation that either support or work against a value-
adding L&D function.
There are various ways in which this question could be answered, depending on the factors that
each individual identifies. However, one approach that would work in any context would be to
highlight factors covered in the questionnaire in Annex 1 to these notes.
Review Question 2
Explain and justify criteria that an L&D professional should use in order to decide how
best to add value to the business for which he or she works.
Any answer to this question should start with a convincing definition of ‘adding value’ such as
the one provided at the start of Chapter 14.
One way of proceeding from there would be to use an established framework such as Porter’s
value chain (1980) or Green’s (1999) ‘Align, engage and measure’. Either can be justified by
reference to the above definition of ‘adding value’, and will provide a clear structure for an
An alternative approach would be to explain and justify criteria that underpin the eight key
tasks of L&D professionals identified at the end of the chapter. They relate to:
using the business’s operating and financial review systems to make explicit and to
communicate and measure L&D’s value-adding strategies and targets
making L&D ‘value-adding’ part of ongoing conversations with business sponsors about
the priorities of the business
sharing with business partners and sponsors a clear picture of the initial state of affairs and
envisaging together options that could change that picture, and how change could be
expressing L&D expectations in terms of clear, feasible value-adding goals
agreeing with partners and sponsors on the path to follow in order to achieve agreed
outcomes, and on how and when to measure progress along that path (making use of
strategic milestones and business KPIs and metrics)
agreeing on what must happen in the workplace if that path is to be taken
using a pragmatic mix of quantitative measurement methods for hard objectives, and a
range of techniques that capture the essence of softer objectives
using measures broad and flexible enough to capture the essence of L&D activity without
interfering overmuch in operations.
Assessing the quality of your L&D function’s service
Please respond to each question by circling Yes, No, or Don’t know
Looking at your L&D function/service,
Does it participate in joint ventures with L&D functions in
other organisations to develop and offer value-adding tools
and services? Yes / No / Don’t know
Does it have its own business plan for developing its capability
and performance? Yes / No / Don’t know
If it does, is this plan well related to the challenges facing
your organisation? Yes / No / Don’t know
Does it use regular structured feedback and benchmarking of
its own personnel and activities in order to assess its performance? Yes / No / Don’t know
Does it work to an explicit set of ethics and values that have been
agreed at the highest level? Yes / No / Don’t know
Does your L&D function/service add value by:
aligning? Yes / No / Don’t know
engaging? Yes / No / Don’t know
measuring? Yes / No / Don’t know
Looking at the L&D professionals who work in or for the organisation,
Do they seem clear about who are their customers, suppliers and
business partners, and do they understand the people and
organisational implications of the challenges those clients and
partners are facing? Yes / No / Don’t know
Do they seem clear about the purpose of their jobs and the processes
that they are responsible for managing? Yes / No / Don’t know
Do they create and pursue their own development plans? Yes / No / Don’t know
Do they assess their own performance with regard to:
meeting standards agreed with customers? Yes / No / Don’t know
satisfying their customers’ expectations? Yes / No / Don’t know
contributing to their customers’ performance? Yes / No / Don’t know
finding value-adding ways to improve that contribution? Yes / No / Don’t know
What seem to be the main barriers and aids to the provision of a value-adding L&D service in your
With acknowledgements to N. Fonda and H. Rowland (1995)
(including those cited on the slides)
ANDERSON, V. (2007) The Value of Learning – A new model of value and evaluation. Change
Agenda. London: CIPD. Online version also available at: http://
www.cipd.co.uk/subjects/lrnanddev/evaluation [accessed 12 July 2008].
D’CRUZ, J. R. and RUGMAN, A. M. (1994) ‘The Five Partners Model: France Telecom, Alcatel,
and the global telecommunications industry’, European Management Journal, Vol.12, No.1:
FONDA, N. and ROWLAND, H. (1995) ‘Take me to your (personnel) leader’, People
Management, Vol.1, No.25, pp18–23.
GREEN, K. (1999) ‘Offensive thinking’, People Management, Vol.5, No.8, 22 April: 27.
PORTER, M. E. (1980) Competitive Strategy: Techniques for analyzing industries and
competitors. New York: Free Press. (Republished with a new introduction, 1998.)
SLOMAN, M. (2007) ‘Thanks – it’s just what I wanted ...’, People Management, 29 November:
ULRICH, D. and BROCKBANK, W. (2005) The HR Value Proposition. Boston, MA: Harvard