We often measure only a narrow slice of what effective leadership delivers. Organizations don’t measure three additional outcomes—“returns” on leadership development investments that are vital.

 

Measuring the impact of leadership development investment is a ‘hot’ topic right now. It should be. We are what we measure. Investment choices are tradeoffs—if a leadership development program isn’t impacting business performance, that spend could have greater impact elsewhere and should be redirected. The challenge is we often measure only a narrow slice of what effective leadership delivers.


Today, most ROI assessments focus primarily on knowledge and skills. Facilitators do pre- and post- session surveys on what participants know. L&D departments ask them what actions they’ve taken, which tools from the program were most valuable. In some cases, surveys and assessments seek to quantify the impact of shifts in behavior on team performance and business results at multiple intervals after a development program. All of this is incredibly useful and important information to help improve the impact of taking precious time away from work to focus on development.

However, it’s also not sufficient. Organizations don’t measure three additional outcomes—“returns” on leadership development investments that are vital to a leaders’ ability to enable an organization to deliver results:


Mindset and Perspective: The power of framing applies vividly to leadership. A leader can consider a situation narrowly or expansively; short term or long term; from a mindset of concern or of opportunity. Leaders set direction for their teams and themselves based on their mindset and perspective about the business and their role. An effective leadership development program changes a leader’s frame about their role, about their organization, about the market in which they compete. That shift in frame opens the mental door to innovation, creativity and expanded opportunity. We should measure: “Did this class change how you view the work of your team and your connection to the broader organization?”

Core and Confidence: Leadership is not one size fits all. As leaders progress in their careers, individual leaders must develop their “leadership core.” A leader’s core is formed through self-awareness and an understanding of his or her natural strengths as well as conscious choices about the nature of leader she or he wants to be. In addition, a leader has to build confidence in that core over time. That understanding and confidence comes through practice, feedback and reflection. Leadership development programs that can accelerate and deepen a leader's understanding of their personal core deliver ROI across months and years, not just a specific application project. We should measure: “Did this class change your understanding of how you lead? What will you do differently as a result?”

Relationships and Network: Knowledge and skills are really important—but confident leaders can go find what they need. Leadership development programs are rare opportunities for leaders to network across geographies and functions in their organizations, to build relationships and learn about the work of others without the specific focus of a shared project. This expansive networking offers significant cascaded benefit for the businesses, as organizations flatten and work is increasingly done horizontally rather than vertically. We should measure, “How many new contacts have you made in this session? Have you identified unexpected opportunities to work together in the future?”


The ROI of leadership development is dramatically different—and more relevant—if organizations measure all four elements (Knowledge & Skills, Perspective, Core, and Relationships). Developing great leaders isn’t just about increasing what they know. It is about impacting how they lead.

 

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Amanda Young Hickman is co-founder of Insight Experience, a Boston-based firm delivering contextually rich, immersive business simulations and experiential learning experiences to accelerate and integrate leadership, business acumen and strategy execution.