How National Grid Measures Leadership
To understand and improve the impact FoL had on its workforce and the business, the company partnered with consulting company Capital Analytics in 2010 to deploy a business impact and optimization study.
Based on soft skills, FoL’s learning objectives proved difficult to quantify using traditional methods of training evaluation. To show stakeholders a return on the investment in FoL and understand how the program’s deployment could be improved, National Grid used a statistical causal model of human capital analysis.
The study considered National Grid’s performance review system as a baseline to track changes in performance over time. Other metrics included changes in merit pay, bonuses, retention and turnover during and after training.
Changes in these metrics were compared to a control group of similar leaders who had not yet attended training. “One finding that was very exciting for National Grid was trained leaders showing a measurable increase in their leadership behaviors back on the job compared to those who didn’t go through the training,” said Therese Sullivan, director of talent, leadership and change management, National Grid. “This gave us great leverage in knowing we were continuing to deploy a very successful program.”
FoL covered such topics as safety leadership, revenue generation, situational leadership, emotional intelligence, performance management, leading a union workforce, inclusive leadership and problem solving.
The study used statistics that looked at interactions between multiple variables to analyze the data and isolate FoL’s business impact from other variables such as economic factors and leadership changes in the work environment. Further, findings were segmented by employee demographic groups to show National Grid precisely where — and with whom — FoL showed varying degrees of impact.
The analysis found that manager support enhanced a learner’s experience at FoL and improved that learner’s ability to apply the concepts on the job. In response, National Grid made manager support — including attendance at a manager’s workshop — mandatory for all FoL attendees, so that leaders are set up to succeed in the training.
Then there was another key finding. “Reducing turnover was never an overt objective of FoL, but it proved to be a beneficial, unintended consequence of the training,” said Shandy Arroyo, leadership development specialist, National Grid.
Turnover among trainees was significantly lower than the baseline rates for the untrained in both the U.K. and the U.S. Of the front-line leaders who left, 97 percent of them were untrained. This 12-month turnover among the untrained front-line leaders cost National Grid more than $7 million in replacement costs. In the U.K. alone, the reduction in turnover generated significant savings to cover the costs of FoL training in less than two years.
Performance following training varied in each demographic group. For example, demonstration of leadership qualities was the most improved in the group of leaders with five or fewer years of tenure. Knowing how different tenure groups react to the training allows National Grid to select participants who will benefit the most from the training, and also points to opportunities to improve it for other tenure groups.
“The insights we gained through the business impact study have been invaluable to our ongoing deployment of this important initiative,” Sullivan said.
Gene Pease is CEO of consulting company Capital Analytics. He can be reached at editor@CLOmedia.com.