Few would question the importance of leadership and leadership development. Great leaders are needed now more than ever, and for the most part, they must be developed internally. Executives stress this topic in many surveys and reports. The Conference Board routinely reports that leadership and leadership development often are included among the top five issues facing executives. It is one of the most important talent development initiatives we can implement.
Most professionals involved in implementing leadership development programs understand that there are five levels of outcomes possible for any program. These are:
1. Reaction to the program
2. Learning the content
3. Applying the content
4. The impact on key measures
5. The financial ROI (is it worth it?)
However, not everyone is measuring at the impact and return on investment (ROI) levels.
A recent article in MIT Sloan Management Review by Hannes Leroy, Moran Anisman-Razin, and Jim Detert highlighted the problem. In the article, “Leadership Development Is Failing Us. Here’s How to Fix It,” the authors argue that leadership development providers do not deliver impact and offer a prescription for the consumers, the Learning and Development (L&D) and Human Resources (HR) managers who purchase the program. In reality, there are four stakeholder groups involved in the situation. They are the leadership development providers, the consumers (L&D/HR) who purchased the program, the participants, and the executives who fund it. They are all important stakeholders, but perhaps the most important opportunity is to ensure that the funders are pleased with the results.
More Than Behavior Change
Previous research shows that executives want to see impact, not just behavior change. They want to see what the behavior change influences in the organization. Even some would like to see the financial ROI. As noted in our 2010 book, “Measuring for Success: What CEOs Really Want from Their Learning Investments,” classic research has shown that impact and ROI are the #1 and #2 measures for this kind of program, with 96 percent and 74 percent, respectively, indicating their desired level of evaluation. If someone is not convinced of that, we suggest they ask the executives who fund the programs if they would like to see the program’s impact or the financial ROI. We predict the answer to both questions will be, “Yes.”
Additionally, in our evaluations, participants usually are excited when they can see the impact of their new or improved behavior. They would like to see results at the impact level. When the leadership program is connected to impact measures in the beginning, they have more ownership because now they are solving a problem or addressing an opportunity under their control—not just learning some new behavior.
These days, more consumers are asking for impact and ROI, primarily driven by the influence of the funders, the executives. The consumers of leadership development, HR and L&D teams, now are requiring more measurement at the impact and ROI levels. This often is driven by the executives. We see this from two perspectives. When we are asked to conduct ROI studies in an organization in the L&D function, it often involves evaluating a leadership development program. Those requests come from the top executives. When the practitioners attend our ROI Certification sessions, they are asked to select a program that needs to be evaluated all the way to ROI. One of the criteria is that executives may be expecting an evaluation at this level. In the last 10 years, the #1 topic for ROI Certification projects has been leadership development. In our work, we are encouraging our practitioners to be proactive and not wait for a request from their executives.
Provider Challenge
In many situations, leadership development providers are reluctant to evaluate at these levels. The concern is that the program may not deliver the value. The reality is that if the program doesn’t deliver a positive impact, it is probably not the content that is the issue. More than likely, it was not implemented or supported very well in the organization. As one vice president of a large technology company told us, “Any model will work. It’s just a matter of how much we are willing to support it to deliver the desired results.” An ROI study helps the provider stand out from the rest of the field.
The challenge to leadership development providers is to measure at the impact and ROI levels now. Being proactive places you in a much better position. If you wait until the request, you and your client will have a short time frame to deliver, and you’re defending a challenge. You want to be on the offense, not defense. ROI is on someone else’s agenda. You want to keep ROI on your agenda so you can drive this with your clients.
The good news is that many organizations do this systematically now. Our recent book, “Proving the Value of Leadership Development: Case Studies from Top Leadership Development Programs,” presents 12 case studies of how organizations have addressed this issue. We invite all of those who offer leadership development programs to consider pushing the evaluation to the impact level—and even further to ROI.