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The New ROI: Return on Intelligence |
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Written by Philip E. Howe, CPA, and Joseph F. Kornfeind
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In today’s hyper-competitive business climate, many organizations are so focused on return on investment (ROI) that they have forgotten their most valuable asset: their employees’ intelligence and ideas. An increasing number of organizations, however, are opening their eyes to the fact that long-term organizational ROI means making routine investments in human capital. Finding ways to encourage employees to make better decisions, learn faster, and innovate quicker is becoming a top management challenge.
One benefit of institutional learning is synergy. Learning, change, and innovation are part of the same continuum and are not discrete activities. Learning from one area feeds another. It also creates an affirmation or a feeling of growth and enlightenment that can be contagious.
Another is meeting strategic goals. A good learning program assesses an organization’s workforce based upon personal strengths, accomplishments, and goals, and then links these to the organization’s overall strategy.
Innovation can also be enhanced. Most organizations are problem-focused. Increased learning produces a proficiency at looking at not only what has happened, but also at what is possible. Even failures present great learning opportunities.
Other benefits that can be reaped by corporate education programs include the following:
- Employee satisfaction - When people learn something of value, they are happier and more satisfied.
- Individual actualization - Successful learning sometimes requires learners to be teachers, teachers to be leaders, and leaders to be visionaries. As individuals are required to step up, the organization will take a huge leap forward.
- Customer transference - More educated employees help companies differentiate themselves from the competition by becoming better teachers to their customers.
- Transition - A large number of employees will soon be retiring from the workplace. The successful transfer of tacit knowledge will depend a great deal on learning.
If you accept these benefits, the next step is to incorporate a learning program into your organization. Below are some steps that managers can take to provide for institutional learning within their organizations:
- Commit to the investment - Have a dedicated resource, in-house or consultant, who thinks hard about how you learn as an organization.
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Know your goal - Real, beneficial learning comes from purpose and direction. Everyone cannot and should not learn everything. Knowing who should be offered specific programs is important. Otherwise, employees will be more educated, but really not much better off.
- Create a positive culture - Before people can learn effectively, they need to feel safe to make mistakes. Also, not only should they be encouraged to learn, it should be insisted upon.
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Measure progress - Create simple tools to measure how your employees are growing in the areas your organization values. This will help determine where employees are in the learning continuum.
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Offer feedback - Allow assumptions used in past decisions to be challenged and evaluated. Past errors are less likely to be repeated. For employees, this can open their eyes to how decisions are made, and provide insight into work styles, as well as where people are in the learning spectrum.
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Make lessons practical - Structure learning so employees can apply the lessons directly. Relevant training prior to a project or initiative that uses the lessons of that training will enhance insight and retention.
Henry Ford once lamented that when he hired workers for the assembly line that he had to take their heads as well as their hands. Today’s leaders have done an about-face from that thinking, acknowledging that value within an organization resides more squarely in the head of the individual worker. If organizations are to remain efficient and prosperous in the world economy, they need to increase their return on intelligence.
Philip E. Howe, CPA, is director of accelerated programs at The Wescoe School of Muhlenberg College and a member of the Pennsylvania CPA Journal Editorial Board. He can be reached at
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Joseph F. Kornfeind is associate dean of The Wescoe School of Muhlenberg College. He can be reached at
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. The original article first appeared in the Fall 2006 issue of Pennsylvania CPA Journal. Reprinted with permission.
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