It’s time to start planning and budgeting for next year — advanced planning that aligns with strategic business initiatives and priorities will give you a much firmer grasp on the learning and development (L&D) budget for your organization.

Of course, a primary focus within companies on developing and selling products is wholly understandable, but a properly trained and educated team is what drives the creation of superior products that simplify and guide the development and sales process. A savvy executive team understands this. If L&D hasn’t been a high priority in your organization, now is the time to demonstrate the value your team creates as you look to the coming year.

Determine Goals and Include L&D

We see a clear and measurable difference between learning organizations that create a well-defined plan with clear strategies — who have an integrated budgeting process — and those that are reactionary. It’s too often the equivalent of reading a repair manual after something breaks and trying to figure out which tools to use. Almost without exception, scrambling to catch up leaves the organization breathless and poorer for the experience.

What are the Signs of an Integrated Budgeting Process?

It starts with organizational priorities. The existing processes should be clear and driven as much by objectives as the budget or proposals. L&D planning should happen in parallel with other budgetary items and be viewed as necessary to achieve stated objectives. Proposals from L&D for the coming year are integrated with broader organizational goals and receive necessary cooperation and support from other teams.

Without that integration, your organization may be undermining, instead of augmenting, the efforts of every member of the team and missing out on the success that L&D investment creates.

Align Goals With Learning Objectives

The process of full-scale L&D planning begins with a philosophy that L&D is a full partner at the table. In an environment conducive to success, executive leaders understand how L&D provides significant support in meeting organizational goals. As your company sets 2025 goals and priorities, make sure to clearly identify the learning priorities that will feed those goals.

In planning meetings, you might ask questions like:

• What product developments does the sales team need to know more about to be effective?

• Do new marketing objectives require a better understanding of digital marketing tools and social media strategies?

• How can L&D facilitate leadership priorities and client demands/requests?

• What existing data is available for insight into the value and needs of company goals?

Simply put, every goal benefits from a better understanding of the tools and methodologies necessary to achieve it.

It’s also worthwhile to create measurable alignment among priorities. Focus L&D efforts on strategic organizational priorities that dovetail with other teams’ efforts instead of business-as-usual priorities that could perhaps be evaluated and eliminated. Specifically, identify how L&D will support strategic priorities. Do the legwork to give that support a monetary value, even if it’s just a conceptual starting point. Include key performance indicators (KPIs) if you have them, but avoid dogmatic adherence when it’s clear they’re not serving the overarching goal.

So many companies we’ve worked with make the mistake of thinking the use of KPIs automatically creates success. They’re not wrong, generally, but you have to identify the right ones for your organization, industry, and client base. It doesn’t work to track performance closely when it’s in service of misaligned goals.

Define a Strategy for L&D Talent

When high-level budgeting and planning for the upcoming year come into focus, it makes sense to map out the existing team in terms of the talent you have and the talent you need. This is an interesting time for both L&D and marketing teams, given the diversity of available digital tools and the wealth of potential external resources and vendors competing for business. You probably have an overlap between internal L&D and marketing that can enable you to maximize the use of internal skill sets.

The first step is to identify the initiatives for the year and the talent required to make them happen. Then, determine how to calculate what your team can achieve (potentially by looking at past or outside benchmarks). Does all that talent and time currently exist in-house? If not, take the time to list the roles and skills you don’t have and identify potential sources to make up that gap.

For modestly sized organizations, a mix of in-house and external talent usually makes the most sense from a human resources and budgeting perspective. But it’s important to have a logic for retaining external talent, particularly regarding their knowledge of your business and industry. Outsource the tasks that can be done generically and keep the nuanced projects in-house.

Identify Technology That Can Serve Multiple Purposes

Of course, given the costs of talent, it makes sense to work closely with IT to also identify the capacities of existing technology and determine where upgrades are necessary. Initially, identify the technology requirements embedded in objectives for the coming year and look at what you already have. Maybe you’re fully stocked or just need to upgrade a few software tools. Or perhaps you see a significant upside in an intensive coordinated campaign that requires new software tools and external support.

Thinking about the efficiencies to be gained through technology and the theoretical costs associated with retaining versus replacing certain components is time well spent, but not without also questioning the assumptions underlying those conversations.

“Overconfidence is a bias rooted in the systematic errors that we make when we try to predict the future,” said author Daniel Kahneman in his book “Thinking Fast and Slow.” “It is fed by the illusion of understanding, the illusion that we understand the past, which implies that the future is also predictable.”

Consider your logic when thinking through goals or create rubrics to help organize your thoughts and needs to avoid overconfidence in predictions.

Use a Variety of Benchmarks to Plan

Kahneman’s admonition applies to every attempt at prediction, not just the effort to guess what technologies will be necessary and relevant next year — which is why energy spent crystal-ball gazing should include perspectives from across the organization and be based on something that is already determined, like benchmarks drawn from the current and previous years. Again, this team effort is an opportunity for L&D to demonstrate value and understanding to other leaders, perhaps by asking targeted questions like these:

• How much did software upgrades and new applications cost last year? What about this year?
• What was the percentage increase or decrease?
• What talents did we retain or outsource from last year to this year? What did they do to the budget?
• Which learning objectives did we continue from last year, and what were the outcomes? Did they justify the expense?
• How were our objectives misaligned with the learning programs put in place?

When doing these analyses, it helps to use previous years and give everything you’re looking at a dollar value, as best you can. Dollar value is broadly understandable and enables us to evaluate success in a familiar, shareable way. And it may sound contrary, but we encourage clients not to think of success in strictly monetary terms. That is the bottom line, yes, but people need other measures of success to find satisfaction.

Ultimately, all this planning for a year you know nothing about would be easier with data, which is admittedly difficult to come by. That should not dissuade you from working to get it and using it as a starting point in planning meetings with the leadership team.

Where Might This Data Come From?

As mentioned, you have historical information from the current and previous years that should tell you what worked and what to abandon. You can also talk to vendors about their services and how much they see them increasing in cost over the next 12–15 months.

But you should not make the mistake of viewing data as gospel. At the highest levels of the organization, advocate for flexibility and the necessity of rapid transitions away from a failed plan. Lead the creation of alternative plans that the organization can rapidly initiate. Engage people’s doubts and fears. As Kahneman’s research demonstrates, the human tendency toward confirmation basis is hardwired and creates “an almost unlimited ability to ignore our ignorance.”

And remember that it is never too late to gather data, even if it’s just a survey of stakeholders and users. The right question asked skillfully about a particular initiative can open a world of understanding.

The Vital Place of L&D

You already know that the role occupied by L&D teams is much broader than many organizations appreciate, especially when it comes time to budget precious funds. An organization that takes planning seriously understands how L&D improves understanding and prevents scrambling and anxiety.

Even in organizations where education is not the primary product or service, learning is always necessary because things change and markets shift. It’s not just about allocating funds and resources to L&D; it’s about aligning L&D with goals and priorities — because organizations that pursue integration and alignment are more likely to succeed.