E L E VAT I N G

Learning & Development

INSIGHTS AND PRACTICAL GUIDANCE

FROM THE FIELD

Edited by Nick van Dam

Preface by Elliott Masie
INTRODUCTION:
Components of a successful
L&D strategy

AUTHORS

Jacqueline Brassey
Lisa Christensen
Nick van Dam

The ACADEMIES framework is a useful tool for conceptualizing

learning strategy.

Over the past decade, the global workforce has been continually
evolving due to 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.1

All of these trends have elevated the importance of the learning-

and-development (L&D) function. To get the most out of invest-
ments 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. At McKinsey,

2 Elevating Learning & Development

we use a variety of frameworks to help companies set up and
manage their corporate academies. One such structure is the
ACADEMIES© framework, which encompasses nine dimensions
that can help to strengthen the L&D function and position it to
serve the organization more effectively.

The strategic role of L&D

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 A).2

Exhibit A: The learning function of an organization has a strategic role

in five areas.

Attract and
retain talent

Develop Learning Motivate

people and talent and engage
capabilities development employees

Create a Build an
values-based employer
culture brand

Source: Adapted from Nick van Dam, 25 Best Practices in Learning & Talent Development, Raleigh, NC: Lulu Publishing, 2008

1. Attract and retain talent. 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.

Introduction: Components of a successful L&D strategy 3

2. Develop people capabilities. 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.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
2.4 times more likely to hit their performance targets. 4

3. Create a values-based culture. 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.

4. Build an employer brand. 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.

5. Motivate and engage employees. 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.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.

4 Elevating Learning & Development

The L&D function in transition
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 B). 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.

1. Alignment with business strategy

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
McK Learning
strategies. Compendium
A learning strategy seeks to support professional
Introduction
development and build capabilities across the company, on time,
Exhibit 2 of 2

Exhibit B: The ACADEMIES framework includes nine components.

Business units and

HR co-own academy

Align Assess capability

with business gaps and
strategy estimate value

Enable Design
70:20:10 learning
journeys

Systems and learning

technology application

Institutionalize Execute and

and integrate scale effectively

Measure impact
on business

Source: McKinsey & Company

Introduction: Components of a successful L&D strategy 5

 Learning and development—From
evolution to revolution
To understand trends and priorities in L&D, we undertook several phases
of research. 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. We also interviewed 15 chief learning
officers or L&D heads at major companies.¹

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; McKinsey research estimates that as many as 800 million jobs
could be displaced by automation by 2030.² 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.³ 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.

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.

1 Richard Benson-Armer, Arne Gast, and Nick van Dam, “Learning at the speed of
business,” McKinsey Quarterly, May 2016, McKinsey.com.
2 For more information, see "What the future of work will mean for jobs, skills, and
wages," McKinsey Global Institute, November 2017, on McKinsey.com.
3 Benson-Armer, Gast, and van Dam, "Learning at the speed of business."

6 Elevating Learning & Development

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.

For many organizations, the L&D function supports the implemen-

tation 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.

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.6 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 due to outdated approaches or because
budgets have been based on priorities from previous years rather
than today’s imperatives, such as a digital transformation.

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.

2. Co-ownership between business units and HR

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.

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.

Introduction: Components of a successful L&D strategy 7

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 busi-
ness 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.

3. Assessment of capability gaps and estimated value

After companies identify their business priorities, they must
verify that their employees can deliver 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 assess-
ing capability gaps, especially when it comes to senior leaders and
midlevel managers.

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.”

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.

4. Design of learning journeys

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

8 Elevating Learning & Development

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.

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.

5. Execution and scale-up

An established L&D agenda consists of a number of strategic initia-
tives that support capability building and are aligned with busi-
ness 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.

L&D functions often face an overload of initiatives and insufficient

funding. L&D leadership needs to maintain an ongoing discus-
sion with business leaders about initiatives and priorities to ensure
the requisite resources and support.

After companies identify their business

priorities, they must verify that their
employees can deliver them—a task that
may be more difficult than it sounds.

Introduction: Components of a successful L&D strategy 9

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.

6. Measurement of impact on business performance

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.

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. We have identified four lenses for articulating and
measuring learning impact:

1. Strategic alignment: How effectively does the learning strategy

support the organization’s priorities?

2. 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.

3. Organizational health: To what extent does learning strengthen

the overall health and DNA of the organization? Relevant
dimensions of the McKinsey Organizational Health Index can
provide a baseline.7

10 Elevating Learning & Development

4. 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?

Access to big data provides L&D functions with more opportunities

to assess and predict the business impact of their interventions.

7. Integration of L&D interventions into HR processes

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.

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.8 This is another area in
which the L&D function can help managers build skills to provide
development feedback effectively.

Another example is onboarding. Companies that have developed

high-impact onboarding processes score better on employee engage-
ment and satisfaction and lose fewer new hires.9 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.

8. Enabling of the 70:20:10 learning framework

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

Introduction: Components of a successful L&D strategy 11

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.

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.

9. Systems and learning-technology applications

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.

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.

12 Elevating Learning & Development

 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.

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 f lexible and agile, and build the human talent needed to
master the digital age.

These changes entail some risk, and perhaps some trial and error,
but the rewards are great.

A version of this chapter was published in TvOO Magazine in

September 2016.

1 Intangible Asset Market Value Study, Ocean Tomo.

2 Nick van Dam, 25 Best Practices in Learning & Talent Development, Raleigh, NC: Lulu
Publishing, 2008.
3 Gary S. Becker, “Investment in human capital: A theoretical analysis,” Journal of
Political Economy, 1962, Volume 70, Number 5, Part 2, pp. 9–49, jstor.org.
4 "What successful transformations share: McKinsey Global Survey results," March
2010, McKinsey.com; and "Economic Conditions Snapshot, June 2009: McKinsey
Global Survey results," June 2009, McKinsey.com.
5 John Coleman, “Lifelong learning is good for your health, your wallet, and your social
life,” Harvard Business Review, February 7, 2017, hbr.org.
6 Human Capital Management Excellence Conference 2018, Brandon Hall Group.

7 For more information, visit the Organizational Health Index on McKinsey.com.

8 HCM outlook 2018, Brandon Hall Group.

9 HCM outlook 2018, Brandon Hall Group.

Introduction: Components of a successful L&D strategy 13

Mapping the ACADEMIES framework
to the book chapters

Chapter 1 Chapter 6
Enabling agile learning organizations: Shaping individual development along
Structuring options for L&D the S-curve

Chapter 2 Chapter 7
L&D governance: The key to earning Maximizing learning impact: The role
a seat at the table of authentic confidence

Chapter 3 Chapter 8
Optimizing the partnership with IT Curation: Moving beyond content
management

Chapter 4 Chapter 9
Learning-needs analysis: Cracking How to improve employee
the code engagement with digital learning

Chapter 5 Chapter 10
Seven essential elements of a lifelong- Changing mind-sets and behaviors:
learning mind-set Our role in personal and organizational
change

14 Elevating Learning & Development

Chapter 11 Chapter 16
Marketing the idea of lifelong learning Developing an organizational coaching
strategy and culture

Chapter 12 Chapter 17
Harnessing analytics to shape the Finding the right faculty: Teaching
learning-and-development agenda excellence means classroom success

Chapter 13 Chapter 18
Reinvigorating blended learning The learning facility of the future

Chapter 14 Chapter 19
Proven strategies to integrate Migrating learning to the cloud
immersive learning into your
organization

Chapter 15
Maximizing the impact of feedback for
learning and behavior change

Introduction: Components of a successful L&D strategy 15

The defining attributes of the 21st-century economy and Authors include:
fourth industrial revolution are innovation, technology, Mary Andrade
globalization, and a rapid pace of change. Therefore, Maria Eugenia Arias
an organization’s capacity to enhance the capabilities of its Carissa Bell
Kim Blank
workforce and create a culture of continuous learning
Jacqueline Brassey
are vital to remaining competitive. These trends make
Janine Carboni
an effective learning-and-development (L&D) function more
Lisa Christensen
critical than ever. This compendium of articles, from
Katie Coates
L&D professionals at McKinsey & Company, discusses
Tonya Corley
every facet of professional development and training— Sara Diniz
from ensuring that L&D’s efforts are closely aligned with Gina Fine
business strategy to elements of advancing the L&D Karen Freeman
function, designing learning solutions, deploying digital Stephanie Gabriels
learning, executing flawlessly, measuring impact, and Sarah Gisser
ensuring good governance. For L&D professionals seeking Terrence Hackett
to hone their organization’s efforts, Elevating Learning & Gene Kuo
Development: Insights and Practical Guidance from the Field Duncan Larkin
is the ideal resource. Maeve Lucey
Barbara Matthews
Karen J. Merry
Larry Murphy
As business leaders, it is our responsibility Stephanie Nadda
to provide those in our span of care with Nick Pappas
opportunities to realize their potential and James Pritchard
know that who they are and what they do Ron Rabin
matters. How else can we help them realize Brodie Riordan
their potential and elevate humanity? Let John Sangimino
this practical yet inspiring compendium guide Lois Schaub
you on your journey to create a thriving Janice Steffen
Allison Stevenson
organization.
Allison Thom
—Bob Chapman, Barry-Wehmiller CEO Nick van Dam
Author, Everybody Matters: The Gina Webster
Extraordinary Power of Caring for Your Ashley Williams
People Like Family Cathy Wright

All proceeds from this book

ISBN 978-0-692-15081-8
90000 will be donated to the
e-learning for kids foundation.

9 780692 150818 e-learningforkids.org