The global workforce is in constant flux, driven by an increasingly competitive business environment, growing complexities, and the relentless march of the digital revolution. This evolution is reshaping the very fabric of organizations, demanding a workforce that is not only skilled but also adaptable and continuously learning. Persistent uncertainties, a workforce spanning multiple generations, and the rapidly decreasing shelf life of knowledge itself further emphasize the critical need for effective reskilling and upskilling initiatives. In this digital, knowledge-centric economy, a dynamic and learning-oriented workforce is no longer just an asset—it’s a necessity. Research underscores this point, revealing that a significant portion of market capitalization in public companies is now attributed to intangible assets, primarily encompassing skilled employees, exceptional leaders, and the collective knowledge within the organization.
Learning and Development: From Evolution to a Strategic Imperative
Our journey to understand the evolving landscape of Learning and Development (L&D) began in 2014 with a survey of 1,500 executives focused on capability building. Building on this foundation, in 2016, we expanded our research to include 120 L&D leaders from 91 organizations. This deeper dive allowed us to gather insights into their traditional training methodologies and their aspirations for future learning programs. Furthermore, we engaged in in-depth interviews with 15 Chief Learning Officers and L&D heads at leading companies to gain firsthand perspectives on the challenges and opportunities within the field.
Historically, L&D functions have played a valuable role in equipping employees with the skills required to perform effectively in their current roles. The primary emphasis has traditionally been on upskilling, enhancing existing skill sets. However, the pace of change is accelerating at an unprecedented rate. Research estimates that automation could displace as many as 800 million jobs by 2030, highlighting the urgency for proactive adaptation.
Employee roles are undergoing continuous transformation, and a significant portion of the workforce will need to acquire entirely new skills simply to remain employable. Our research validated our initial premise: corporate learning must undergo a revolutionary transformation in the coming years to keep pace with the relentless advancements in technology and evolving business needs. Beyond merely updating training content, companies must prioritize blended-learning solutions. These integrated approaches combine the flexibility of digital learning with the practical application of fieldwork and the immersive engagement of classroom sessions. The rise of user-friendly digital learning platforms is also empowering employees to take greater ownership of their professional development. Individuals are increasingly able to access courses and resources precisely when they need them, moving away from rigid, scheduled classroom sessions.
These necessary innovations will require a greater commitment of resources to training initiatives. Our survey data indicates that 60 percent of respondents are planning to increase their L&D spending in the near future, and 66 percent aim to increase the number of employee training hours. As organizations dedicate more time and financial capital to L&D, it becomes paramount to ensure that the transformation of this function is strategic, efficient, and impactful.
Strategic Roles of Organizational Learning Function: Visual representation of five key strategic areas where learning and development plays a crucial role in organizational success.
All of these converging trends have elevated the strategic significance of the Learning and Development (L&D) function within organizations. Our multi-phase research initiative was undertaken to thoroughly understand the prevailing trends and current priorities within L&D. Our findings underscore how the L&D function is actively adapting to meet the evolving demands of modern organizations and the increasing levels of investment being directed towards professional development.
To maximize the return on investment in training programs and curriculum development, L&D leaders must embrace a more expansive and strategic role within their organizations. This requires formulating an ambitious vision for the function, one that is deeply integrated with overall business objectives. A comprehensive and coordinated Learning Strategy is essential. This strategy must actively engage the entire organization and foster a culture of collaboration to be truly effective. The ACADEMIES© framework, comprised of nine interconnected dimensions of L&D, provides a valuable structure to strengthen the L&D function and position it to serve the organization more strategically and effectively.
The Strategic Role of L&D: Beyond Traditional Training
One of the fundamental responsibilities of L&D is to manage the development of people within an organization. However, this development must be strategically aligned to support broader business priorities and contribute directly to organizational success. L&D’s strategic role extends across five key areas, moving beyond the traditional view of training as simply skills-based instruction.
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Attract and Retain Talent: Historically, the primary focus of learning was narrowly defined as improving productivity within existing roles. Today, learning has taken on a much broader significance, becoming a crucial factor in employee employability and career longevity. The traditional employment model of lifetime employment with a single company has shifted dramatically. Now, employees are retained based on the value they continuously bring to the organization. Employees are increasingly taking ownership of their personal and professional growth, and consequently, “opportunities for learning and development” consistently rank among the top criteria for individuals choosing to join an organization. Conversely, a perceived lack of L&D opportunities is frequently cited as a key reason for employees choosing to leave a company. A robust learning strategy is therefore a powerful tool for talent acquisition and retention.
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Develop Essential People Capabilities: Human capital, the collective skills and knowledge of an organization’s workforce, requires continuous investment to maintain and enhance its value. In today’s rapidly evolving world, knowledge can become outdated or obsolete at an accelerated pace. When this occurs, the value of human capital diminishes and must be replenished through new learning initiatives and relevant practical experiences. Companies that strategically invest in developing the next generation of leaders are seeing significant returns. Research indicates that companies in the top quartile for leadership effectiveness outperform other organizations by nearly two times in earnings before interest, taxes, depreciation, and amortization (EBITDA). Furthermore, companies that prioritize leadership development during periods of significant organizational transformation are 2.4 times more likely to achieve their performance targets. A forward-thinking learning strategy is essential for building and maintaining critical people capabilities.
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Create a Values-Based Culture: As workforces become increasingly virtual and globally dispersed, L&D plays a critical role in fostering a cohesive, values-based organizational culture and a strong sense of community. This is particularly important for attracting and engaging younger generations, such as millennials and Gen Z, who are increasingly drawn to working for values-driven and sustainable organizations that contribute positively to society. L&D programs can be designed to reinforce company values, promote ethical behavior, and build a shared sense of purpose across geographically dispersed teams. A culturally-aligned learning strategy can strengthen organizational identity and cohesion.
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Build a Strong Employer Brand: An organization’s brand is one of its most valuable assets, conveying important information about its market success, financial stability, industry position, and the quality of its products and services. Strategic investments in L&D can significantly enhance a company’s employer brand and bolster its reputation as an “employer of choice.” In a competitive talent market, especially as large segments of the workforce approach retirement, organizations must actively compete for a shrinking pool of skilled professionals. Communicating a strong employer value proposition, which prominently features L&D opportunities, is crucial. A brand-enhancing learning strategy can attract top talent and differentiate an organization in the eyes of prospective employees.
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Motivate and Engage Employees: Providing employees with opportunities for continuous learning and the development of new competencies is one of the most powerful drivers of employee engagement. Research suggests a strong correlation between lifelong learning and overall happiness and job satisfaction. When highly engaged employees are challenged, supported, and given the resources to grow and develop within their chosen career paths, they are more likely to be energized by new opportunities at work and demonstrate higher levels of satisfaction with their current organization. An engaging learning strategy fosters a culture of growth, development, and continuous improvement, leading to a more motivated and productive workforce.
The L&D Function in Transition: Embracing the ACADEMIES Framework
Over years of research and practical application, we have identified nine key dimensions that are consistently present in high-performing L&D functions. These dimensions have been synthesized into the ACADEMIES framework, a comprehensive model that encompasses all critical aspects of L&D, from defining strategic aspirations to rigorously measuring impact. While many organizations may implement elements of this framework, our recent research reveals that only a select few have achieved full maturity across all nine dimensions.
ACADEMIES Framework for Effective L&D: A visual representation outlining the nine key components of the ACADEMIES framework, crucial for building a robust and impactful learning and development strategy.
1. Alignment with Business Strategy: The Cornerstone of Effective Learning
A primary responsibility of any L&D leader is to develop and champion a learning strategy that is directly aligned with the overarching business and talent strategies of the organization. This learning strategy must be designed to support professional development, build critical capabilities across the company, and do so in a timely and cost-effective manner. Furthermore, an effective learning strategy can serve as a powerful lever to reinforce the company culture and encourage employees to embody the organization’s core values.
For many organizations, the L&D function plays a crucial role in enabling the successful implementation of business strategy. For example, if a company’s strategic priority is a digital transformation, the L&D function will be instrumental in building the necessary people capabilities to drive and support this transformation. This might involve developing programs focused on digital literacy, data analytics, or agile methodologies.
While virtually every business leader would agree on the importance of L&D alignment with overall business priorities, research indicates a significant gap in practice. A study revealed that only 40 percent of companies believe their learning strategy is truly aligned with their business goals. This means that for a majority of organizations, learning initiatives may lack a clear connection to the company’s strategic objectives. This misalignment can stem from outdated L&D approaches or budgets that are based on previous years’ priorities rather than current strategic imperatives, such as a pressing need for digital transformation or expansion into new markets.
To be truly effective, L&D must conduct a rigorous assessment of current employee capabilities and identify the skills and knowledge that are most critical to executing the company’s business strategy. L&D leaders should make it a practice to re-evaluate this alignment on an annual basis. This ensures that they are consistently developing a people-capability agenda that directly reflects and supports evolving business priorities and strategic objectives. A regularly reviewed and updated learning strategy is vital for maintaining relevance and impact.
2. Co-ownership Between Business Units and HR: A Collaborative Approach
In today’s dynamic business environment, characterized by the constant emergence of new tools and technologies, organizational agility is paramount. Companies must be prepared to rapidly adapt their business processes and operational practices. Similarly, L&D functions must be equally agile, capable of quickly launching capability-building programs in response to emerging business needs. This might include rapidly training staff on new technologies, such as cloud-based collaboration tools, or developing programs to address sudden shifts in market demand.
L&D functions can significantly enhance their partnership with business leaders by establishing a robust governance structure. This structure should be based on the principle of co-ownership, where leadership from both L&D and business units share responsibility for key aspects of capability building. This includes jointly defining the people-capability agenda, prioritizing development initiatives, designing relevant programs, and securing the necessary funding.
Under this collaborative governance model, key stakeholders such as the Chief Experience Officer (CXO), senior executives, and business-unit heads play a direct role in shaping the people-capability agenda for their respective areas of the business. This ensures that development initiatives are strategically aligned with the company’s overall strategic goals and directly address specific business needs. Furthermore, the active involvement of top business executives helps to firmly embed the learning function and all L&D initiatives into the very fabric of the organizational culture. This high-level engagement fosters a deeper commitment to the L&D function’s long-term vision and ensures that learning is seen as a core business driver, not just a support function. A collaborative learning strategy ensures relevance and buy-in across the organization.
3. Assessment of Capability Gaps and Estimated Value: Data-Driven Development
Once an organization has clearly defined its business priorities, the next crucial step is to rigorously assess whether its employees possess the capabilities required to successfully deliver on those priorities. This assessment can often be more challenging than it initially appears. Some companies fail to conduct any formal assessment of employee capabilities, while others only perform assessments at a very high, superficial level. Conversations with L&D, HR, and senior executives frequently reveal that many organizations struggle with effectively assessing capability gaps, particularly when it comes to senior leaders and mid-level managers.
The most effective organizations adopt a deliberate and systematic approach to capability assessment. At the heart of this process is a comprehensive competency or capability model. This model should be directly aligned with the organization’s strategic direction and define the key skills, knowledge, and behaviors required for success. For example, for a segment of an e-commerce company’s workforce focused on data-driven marketing, a key competency might be “deep expertise in big data and predictive analytics.”
After identifying the most essential capabilities for various functions or job descriptions, companies should then implement a robust process to assess how employees rate in each of these areas. This assessment can involve a variety of methods, including skills assessments, performance reviews, 360-degree feedback, and manager evaluations. The insights gained from these capability assessments then directly inform the learning strategy. L&D interventions should be specifically designed to close identified capability gaps, ensuring that development efforts are targeted and impactful. A data-driven learning strategy maximizes the return on development investments.
4. Design of Learning Journeys: Moving Beyond Standalone Programs
The delivery of corporate learning has evolved significantly, moving away from purely traditional classroom-based training. Today, most organizations utilize a blended approach, combining digital learning formats with in-person sessions. While research continues to validate the immense value of immersive, in-person L&D experiences, business leaders often face significant time constraints. They report being incredibly busy, making it challenging to dedicate extended periods to traditional classroom training. Furthermore, many learners express a preference for developing and practicing new skills and behaviors in a “safe environment,” where they can learn from mistakes without fear of public failure impacting their career progression.
Traditional L&D programs often consisted of multi-day classroom sessions with little to no follow-up or reinforcement. This approach often resulted in limited long-term retention and application of learned skills. Recognizing this limitation, leading L&D functions are shifting away from standalone programs and embracing the concept of learning journeys. Learning journeys are continuous learning experiences that unfold over a period of time, incorporating a variety of L&D interventions. These interventions can include practical fieldwork assignments, pre- and post-classroom digital learning modules, collaborative social learning activities, on-the-job coaching and mentoring, and focused short workshops.
The primary objectives of a learning journey are to facilitate the development of required new competencies in the most effective and efficient manner and to ensure the successful transfer of learning to the actual job context. By providing ongoing support and reinforcement over time, learning journeys promote deeper learning and more sustainable behavioral change. A well-designed learning strategy incorporates learning journeys to maximize impact and long-term skill development.
5. Execution and Scale-Up: Delivering on the Learning Agenda
A well-defined L&D agenda typically encompasses a range of strategic initiatives designed to support capability building and align with overarching business goals. These initiatives might include leadership development programs focused on building high-performing teams or company-wide rollouts of critical safety training programs. The successful execution of these L&D initiatives, delivered on time and within budget, is critical to building and sustaining support from business leaders and demonstrating the value of the L&D function.
L&D functions often face the challenge of managing a high volume of initiatives with potentially insufficient funding and resources. To address this, L&D leadership must maintain an open and ongoing dialogue with business leaders regarding the portfolio of initiatives and their relative priorities. This collaborative discussion ensures that L&D programs are adequately resourced and receive the necessary support to achieve their objectives.
Many new L&D initiatives are initially piloted with a limited audience to test their effectiveness and refine their design. The successful execution of a small pilot program, such as an online orientation program for a specific department, can pave the way for a much larger impact when the program is scaled up and rolled out to the entire enterprise. Scaling successful programs allows companies to benefit from economies of scale, reducing the cost per person and maximizing the overall impact of the learning strategy. A scalable learning strategy ensures broad reach and cost-effectiveness.
6. Measurement of Impact on Business Performance: Demonstrating Value
To ensure accountability and demonstrate the value of L&D, a learning strategy must include robust mechanisms for measuring execution and impact. This measurement should be based on key performance indicators (KPIs) that align with both L&D objectives and broader business goals. These KPIs can be categorized into three key areas:
- Business Excellence: This KPI assesses the degree to which L&D initiatives and investments are directly aligned with and contribute to overarching business priorities. It examines the strategic relevance of learning programs and their contribution to achieving organizational goals.
- Learning Excellence: This KPI focuses on the effectiveness of learning interventions in driving behavioral change and improving employee performance. It measures whether learning programs are successfully equipping employees with new skills and knowledge that translate into improved job performance.
- Operational Excellence: This KPI evaluates the efficiency and effectiveness of resource utilization within the corporate academy or L&D function. It assesses how well investments and resources are being managed to deliver learning programs in a cost-effective and operationally sound manner.
Accurate measurement of learning impact is not always straightforward. Many organizations still rely on traditional, less insightful metrics such as learning program satisfaction scores and course completion rates. However, high-performing organizations are increasingly focusing on outcomes-based metrics that provide a more direct measure of impact. These metrics include improvements in individual performance, employee engagement levels, team effectiveness, and measurable improvements in key business processes.
We have identified several lenses through which to articulate and measure learning impact more comprehensively:
- Strategic Alignment: How effectively does the learning strategy support the organization’s stated strategic priorities? This can be measured by assessing the alignment of learning initiatives with key business objectives and strategic goals.
- Capabilities: How well does the L&D function equip colleagues with the mindsets, skills, and expertise they need most to succeed in their roles and contribute to organizational success? This impact can be measured by tracking the closure of identified capability gaps against a comprehensive competency framework.
- Organizational Health: To what extent does learning contribute to strengthening the overall health and DNA of the organization? Relevant dimensions of the McKinsey Organizational Health Index (OHI) can provide a valuable baseline and framework for measuring this broader impact.
- Individual Peak Performance: Beyond simply building capabilities, how effectively does the L&D function help colleagues achieve maximum impact in their roles while also maintaining a healthy work-life balance and overall well-being? This holistic view of performance recognizes the importance of both productivity and employee well-being.
The increasing availability of big data provides L&D functions with unprecedented opportunities to analyze learning data, assess program effectiveness, and even predict the potential business impact of future L&D interventions. A data-driven approach to measuring impact is essential for a strategically focused learning strategy.
7. Integration of L&D Interventions into HR Processes: A Holistic Talent Ecosystem
Just as corporate learning activities must be strategically aligned with broader business objectives, they should also be seamlessly integrated into core HR processes. L&D has a vital role to play across the entire employee lifecycle, from recruitment and onboarding to performance management, promotion decisions, workforce planning, and succession planning. However, research indicates that many L&D functions still operate in relative isolation from other HR functions. At best, many L&D functions have only loose connections to annual performance reviews and lack a structured approach to incorporating development feedback into performance management practices.
L&D leadership must proactively develop a deep understanding of major HR management practices and processes and cultivate close collaboration with HR leaders. The most effective L&D functions leverage consolidated development feedback from performance reviews as valuable input for shaping their capability-building agenda. Furthermore, with a growing number of companies moving away from traditional annual performance appraisals towards more frequent, in-the-moment feedback, the L&D function can play a critical role in equipping managers with the skills and tools necessary to provide effective development-focused feedback on an ongoing basis.
Elevating Learning & Development Book Cover: Image of the book cover, representing a comprehensive resource for insights and practical guidance in the field of learning and development.
Another key area for HR integration is onboarding. Companies that have developed high-impact onboarding processes consistently achieve better employee engagement and satisfaction scores and experience lower rates of new hire attrition. The L&D function is uniquely positioned to play a critical role in creating and delivering effective onboarding programs. This can include helping new hires rapidly build the essential skills to be successful in their roles, providing them with seamless access to digital learning technologies, and facilitating connections with other new hires and experienced mentors to foster a sense of belonging and accelerate integration into the company culture. An integrated learning strategy embedded within HR processes creates a holistic and supportive talent ecosystem.
8. Enabling of the 70:20:10 Learning Framework: Beyond Formal Training
Many progressive L&D functions have embraced the 70:20:10 learning framework. This widely recognized model posits that approximately 70 percent of learning occurs through on-the-job experiences, 20 percent through social interaction and collaboration, and only 10 percent through formal learning interventions such as classroom training and structured digital curricula. It’s important to note that these percentages serve as general guidelines and can vary depending on the specific industry, organizational context, and learning objectives. Historically, L&D functions have predominantly focused on the formal learning component, the 10 percent.
In today’s environment, forward-thinking L&D leaders must expand their focus and actively design and implement interventions that effectively support informal learning, the crucial 90 percent of the learning equation. This includes initiatives such as coaching and mentoring programs, structured on-the-job instruction, apprenticeship opportunities, leadership shadowing experiences, action-based learning projects, on-demand access to digital learning resources, and informal knowledge-sharing sessions like lunch-and-learns. Social technologies are playing an increasingly vital role in connecting subject matter experts, facilitating knowledge creation and sharing, and fostering communities of practice within organizations. A comprehensive learning strategy leverages the 70:20:10 framework to maximize learning impact.
9. Systems and Learning Technology Applications: Enabling Just-in-Time Learning
Perhaps the most significant enablers of just-in-time learning, providing employees with access to learning resources precisely when and where they need them, are technology platforms and applications. The landscape of learning technology is constantly evolving, offering a diverse array of tools to enhance and transform L&D. Examples of these technologies include next-generation learning management systems (LMS), virtual classrooms, mobile learning apps, embedded performance support systems, interactive polling software, video-based learning platforms, learning assessment and measurement platforms, massive open online courses (MOOCs), and small private online courses (SPOCs), and many more.
The learning technology industry has largely transitioned to cloud-based platforms. This shift provides L&D functions with unprecedented flexibility and agility. Cloud-based systems allow organizations to easily “plug and unplug” different systems and access the latest functionalities without the complexities and high costs associated with lengthy and expensive on-premises system implementations. L&D leaders must ensure that their selection and implementation of learning technologies are guided by a well-defined overall system architecture. This architecture should encompass functionality to support the entire talent lifecycle, creating a seamless and integrated experience across recruitment, onboarding, performance management, L&D, real-time feedback tools, career management, succession planning, and rewards and recognition.
While L&D leaders are increasingly aware of the transformative challenges and opportunities presented by the Fourth Industrial Revolution and its convergence of physical and digital worlds, many are still in the early stages of implementing large-scale transformation programs within their L&D functions. Instead, most organizations are adopting a more gradual approach, incrementally adapting their learning strategy and curricula as needed. However, with technology advancing at an ever-accelerating pace, the time for incremental adaptation is rapidly diminishing. Human capital is more critical than ever before and will be the primary factor in sustaining competitive advantage in the coming years. A technology-enabled learning strategy is essential for future-proofing L&D.
Revolutionizing L&D for the Digital Age: A Call to Action
Leaders of L&D functions must embrace a revolutionary mindset and fundamentally rethink their approach. This requires creating a learning strategy that is not only tightly aligned with business strategy but also proactively identifies and cultivates the capabilities needed to achieve sustained organizational success in a rapidly changing world. This strategic approach will result in robust and relevant curricula that effectively leverage every available and appropriate learning method and technology. The most effective companies will be those that boldly invest in innovative L&D programs, remain flexible and agile in their approach, and prioritize building the human talent necessary to thrive in the digital age.
These transformative changes will inevitably involve some level of risk and may require a willingness to experiment and learn from both successes and failures. However, the potential rewards of a strategically driven and future-focused L&D function are immense. Organizations that embrace this revolution in learning will be best positioned to attract, develop, and retain top talent, drive innovation, and achieve sustainable competitive advantage in the years to come.
A version of this chapter was previously published in TvOO Magazine in September 2016 and is also included in “Elevating Learning & Development: Insights and Practical Guidance from the Field,” August 2018.
