Keep It Simple

It’s the best approach to business evaluation By Jack J. Phillips and Patti P. Phillips

Jack J. Phillips is chairman and Patti P. Phillips is president and CEO of the ROI Institute.
They can be reached at


s we assist talent development teams in showing the business value of what they do, we often encounter roadblocks, verbalized as, “This is too complicated” or “This will take too much time.” These typically are symptoms of resistance based on myths rather than facts. The process is simple, and we want to keep it that way. Let’s dispel these myths right now.

Myth 1: There is no framework available to show the ROI for every type of learning program.

Fact: More than 5,000 organizations evaluate programs along the five levels of outcomes of our Phillips ROI Methodology. These build on a four-level model created by industrial-organizational psychologist Raymond Katzell in the 1950s and further popularized by Donald Kirkpatrick. So, this is not a new concept. We have modified Katzell’s work to include these levels: reaction, learning, application, impact and ROI. This is a logical chain of value that must exist for any program to have a business connection and a financial contribution.

Myth 2: You cannot sort out the effects of learning.

Fact: While many influences work together in collaboration to produce business impact, senior executives and the sponsor need to know how much goes to a learning program. There are 10 ways to tackle this issue, which can be accomplished with the simplicity of fourth-grade math. To date, more than 5,000 professionals have successfully addressed this task to become Certified ROI Professionals, or CRPs. Without this step, you lose respect among the senior team.

When there is a need to connect learning to business results, keep it simple.

Myth 3: It’s impossible to convert data to money.

Fact: It’s the impact data that is converted to money, not learning or application. The good news is the impact measures that matter to the organization are already converted to money. It’s a matter of locating the value in the organization.

Myth 4: The financial ROI calculation is not possible (or appropriate).

Fact: While the ROI calculation should be reserved for programs that are very expensive, strategic, high-profile and attract the attention of the management team, it is important to be able to show ROI when it is needed. The ROI calculation is a simple ratio derived from finance and accounting literature and is a calculation the CLO will recognize and support.

Myth 5: Each study needs a different process.

Fact: It’s already been developed for you, much like a drop-down menu for each step in the process. The ROI Methodology has enjoyed three decades of use.

Myth 6: It’s impossible to have an evaluation process that meets the scrutiny of CFOs and university professors while being user-friendly.

Fact: The approach described here will withstand scrutiny of researchers, professional evaluators and professors. More than 75 universities use an ROI Institute book for courses. If the research and academic community rejects a process, it’s unlikely it will be used. The ROI Methodology is built on guiding principles that are both rigorous enough for the academic community and conservative enough for the CFO. It has become the most used evaluation system, attesting to its user-friendly approach.

Myth 7: We must have big data and an enormous amount of computer power to conduct this analysis.

Fact: While big data has its place, evaluations at the impact and ROI levels for a particular program require small data analyses. For example, if 50 executives attend an expensive leadership program, a top executive may ask, “How did that program contribute to the overall organization?” You can show business impact and ROI easily if you start with the why (clear business measures at the beginning of the process) and keep the focus on business measures throughout the process. By using simple processes, step-by-step analysis and even SurveyMonkey for data collection, you can have an ROI study. It’s that simple.

When there is a need to connect learning to business results, keep it simple. Impact and ROI evaluations are possible with step-by-step proven techniques, simple mathematics and minimal effort. In these uncertain economic times, major programs should drive business value, and various stakeholders need to see that learning makes a difference. You can only do this with serious evaluation that pushes to the impact and ROI level. If you would like a case study showing step-by-step how this is accomplished, please let us know.