With the right tools and focus, organizations can plot the progress and track the impact of leadership development programs.
by Cushing Anderson
October 25, 2009
<p><em>With the right tools and focus, organizations can plot the progress and track the impact of leadership development programs. </em></p><p>Leadership development for organizations is important in any environment, but the need is magnified during times of uncertainty. That’s because leadership — or lack of it — has the potential to greatly influence a business outcome. Today’s financial crisis is just one example. Remember Enron? Or the dot-com bust?</p><p>When considering the tangible impact of successful management on a business, two significant questions arise: Will the learning organization’s development program instill leadership in a meaningful way, and will it create measurements to evaluate the capital investment? </p><p>A recent study on executive coaching by the Center for Effective Organizations at the University of Southern California found that “despite the difficulties in identifying business impacts, the reason for doing so is compelling. If coaching improves leadership behaviors, but those behaviors are not the critical factor impacting business performance, then what is the point of the coaching?”</p><p>That’s the exact issue that organizations in need of leadership training are debating. Businesses, whether through general staff or C-level executives, want to know whether there are programmatic measures sufficient to prove that leadership development tools work.</p><p>In fact, measurement of leadership development, which has been explored many times over the years, exists and serves multiple purposes. </p><p>For example, for an organization even to gain approval for implementing a leadership program, internal sponsors need sound data to submit a proposal. During a period when spending at most organizations is scrutinized extensively, no programs are guaranteed approval — even leadership initiatives when leadership is needed most.<br />Businesses and other organizations are aggressively projecting returns on investment, in hard dollars or other measureable outcomes. For senior HR executives contemplating leadership training for their enterprises, providing strong metrics that demonstrate the potential impact is a crucial step. With margins tight across a multitude of industries, no one wants to accept on faith that a program will work.</p><p>But while corporations spend an average of 36 percent of revenue on human capital expenses, according to online management publisher BNET, fewer than 1 out of 5 report more than a moderate understanding of the return on that investment. <br />Teaching the best practices of leadership principles and suggesting how managers should implement them is one thing. But the real value of the program emerges when employees not only understand the underpinnings but also incorporate them in real ways that advance the objectives of an organization.</p><p>There’s no doubt about both the solid impact that competent, coherent leadership provides, as well as the negative effects of a leadership void.</p><p>Late in 2008, as the United States collectively headed to the polls to choose a new president, 80 percent of Americans in a national survey said the country faced a leadership crisis. That was up from 65 percent in 2005, based on a study released by the Center for Public Leadership at the Harvard Kennedy School and the Merriman River Group. </p><p>Confidence in business leaders dropped more than confidence in leaders of any other sector. Confidence in leadership dropped in all areas probed, including the executive, legislative and judicial branches of the U.S. government, state government, education and organized religion. As in 2007, the only sectors of leadership in which Americans had more than a moderate amount of confidence are military and medical leadership.<br />Conversely, productive, focused and incisive leaders can steer an organization and a workforce toward better efficiency, timely innovation and unique vision.</p><p><strong>Sync Business Outcomes With Measurements</strong><br />Beyond a dollar value, concrete statistics on leadership programs offer a predictive value: They show how and why staff demonstrated a leadership concept learned from training. As companies evaluate their options, they’ll find that the best programs have measurements built in.</p><p>Many leadership programs rely on Level 1 measurement. This type of tracking accumulates the most basic information: Did employees enjoy the training? Was the environment conducive to learning? Was the trainee comfortable?</p><p>More sophisticated tracking adds predictive Levels 2 to 4 measurement, which hones in on what learning executives want to know: the type of training knowledge transferred and how it will be used. These studies aim to answer a basic question: Did the leadership program work?</p><p>“This type of measurement goes beyond traditional methods,” said Jeffrey Berk, chief operating officer for KnowledgeAdvisors, a provider of measurement solutions. “We collect leadership data into a database with millions of benchmark points. When this level of monitoring is built into a training program, companies can receive concrete documentation.”</p><p>One method of collection is multirater feedback encompassing an organization’s stakeholders, including a learner’s manager, direct reports or peers. Measurement of this kind establishes the baseline needed to create ROI studies of learning investments.</p><p>When creating a leadership program, learning leaders should collaborate with business executives to determine the type of measurements that should be tracked. Flexibility of this kind ensures that business results are the primary goal of leadership training.<br />That was the path taken by executives at Menasha Packaging Co. LLC, a packaging and point-of-purchase display designer and manufacturer, which is an operating unit of Menasha Corp. in Neenah, Wis. </p><p>Menasha Packaging hadn’t conducted a leadership program in two decades. During a down period, proposing a leadership initiative without making a well-grounded case that the investment would yield positive results would have been folly. But, armed with predictive examples of what the training could produce, learning executives could successfully make the argument that nearly 300 managers needed a course to improve their own job satisfaction as well as the performance of their direct reports.</p><p>“Employees were amazed, especially in a recessionary period, that Menasha viewed training as a very important component of its strategy,” said Mike Waite, president of Menasha. “The company wanted to give managers skills training that would help them deal with issues in their work environment, some of which occurred because of the economy and the resulting changes in work structures that caused their work to become more stressful. Executives expect the training to become an integral part of our company’s culture.”</p><p>With nearly 2,000 employees, Menasha recognized that it lacked efficient communications between supervisors and subordinates. Executives made the case that managers should be engaged through a course in effective leadership and coaching to provide a hub of core training for Menasha’s most valued talent.</p><p>Executives set specific key improvement objectives for the course. Menasha wanted to: <br />• Increase supervisory personnel’s performance levels in day-to-day coaching of direct reports, measured through its talent management system.<br />• Develop a common, consistently used leadership and coaching language for supervisors.<br />• Improve supervisors’ skill and confidence in managing others, particularly in such areas as handling feedback and giving recognition.</p><p>Courses were implemented during a three-month period in 20 two-day classroom training sessions. The company supplemented in-class work with extensive reinforcement delivered by human resources managers. The impact of training on key job metrics was measured. </p><p>When compared with benchmark results from data points in the KnowledgeAdvisors’ database, Menasha’s results were significantly better. The detailed participant evaluation data predicted high job impact and business results, while 91.8 percent of employees said they felt the training would have significant impact on job satisfaction — meaning improved morale and potentially increased engagement.</p><p>“In our business, leadership largely is about taking the lead in strategic thinking,” Waite said. “When we can genuinely demonstrate that our leadership training works by inspiring valuable business outcomes, we build trust and confidence throughout our workforce. In today’s environment, we need positive, provable action steps — and measuring leadership development is part of that. </p><p>“The training we conducted had a positive impact and allowed employees to better understand how their responsibilities tie into our strategy and strengthened commitments to the team,” he continued. “We couldn’t be more delighted with the results.”</p><p>Overall, investing in the measurement of leadership programs allows a company to fully demonstrate the impact of the program not only to company executives, but also to participants. It proves that the program was worth their time and serves as another proof point of companies investing in their workforce.<br /></p>