ROI of Leadership Development

October 19, 2009 · Filed Under Business · Comment 

Team work.

At the moment the question of determining a correct and usable ROI of Leadership Development has been on my mind.

Worldwide organisations spend enormous amount of money and effort on Leadership Development. Are they getting a good return on their investment? Is it like the old adage about advertising – I know only half of the advertising works but I don’t know which half.

Just because leadership is an intangible item and thus leadership development is intangible this does not mean that its results can not be measured. But precisely how?

Firstly we need to start with what is “leadership.” There has been much written on this question however I would believe that it can be summarised in the following points:-

  • creating an environment for everyone to succeed
  • decisiveness
  • setting the vision and formulating the environment to ensure execution of the strategic aims
  • honesty
  • dedication.

I realise that there are many other definitions but this will suffice as the starting point. From this point we need to examine the strategic aims of the business.  Once this has been clarified we can then determine the leadership challenges that are likely to be encountered in achieving this aims.

This is where leadership development then comes into the equation. However it would be incorrect to undertake leadership development without first considering the leadership challenges that the strategic aims create.

From this macro level we need to then determine the leadership objectives, challenges that we are desirous of seeing the people who are or have undertaken a program of leadership development meet. These could be the short-term outputs we are seeking from the development program.

Then we determine what the people or person who engaged in the leadership training can directly effect. It is no use measuring something that they only partially affect. It would be unfair, disheartening and generally counter productive.

Then we move towards determining the value driver and builders. With these mapped we can then determine the appropriate metrics.

These are my initial thoughts.  If you have any comments, thoughts or questions please leave them as I wish to come up with a solid approach to measuring the ROI of Leadership Development.

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