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While sitting at a local coffee shop enjoying the company of two business colleagues, a significant question was posed that caused time to stop for a brief moment: “Skipper, how does your organization measure leadership ROI in plain language for an executive to understand when considering hiring your team?” Wow I thought… do I answer in my normal corporate language and attempt to impress upon that we really are good at what we do? Or, maybe I throw around a few $20 words and some leadership jargon to sound important. Either way, I must answer the question with an assumed definition as if I was actually seasoned to field the question with absolute and unquestionable resolve. “I don’t know…I’ve never actually had anyone ask that question before now,” I replied. What a moment of agony while sitting at the table with two very successful and respected businessmen with polished academic backgrounds, including a mid 1980’s graduate of the Wharton School of Business, both retired and now successfully working on their next ventures. The pressure of just wanting to receive an endorsement from either of them to a colleague of theirs in hopes of that person is willing to accept a meeting from me to present our perfected elevator pitch: “this is why you should use us.”

The remainder of the evening and much of the next day, I researched why and how to answer the question in the future. With the many uncertainties in the “NOW” real-world that business is forced to coexist, this is a question that will most likely show its face again and again. “I must be better prepared to answer it with profound implications that will impress upon our experiential learning from the participants in our past session,” I thought. But, the real skinny on this new found dilemma that I am faced with is this: I too must “again” reinvest in my own development and learning.

It is my hopes that this article can help others who might be sitting at a similar table having coffee in the same dilemma. In my research and looking at Scott Saslow’s writings, the Executive Director of The Institute of Executive Development, a significant high number of people “Rarely” or “Never” calculate the ROI on executive development (take a look at the table below, from market study Leadership Development: Challenges & Best Practices).

Although there are several factors that lead to reasons for tracking the impact of executive development leadership and team building programs such as those delivered from our team, it is very important to do so in plain language for others to grasp the concept of the programs intention. In answering the question for our programs, I am not only looking to monitor the impact, I am also interested in expressing a thorough examination of developmental activity along with the benefits and cost to deploy across the entire organizational environment.

According to Saslow, “conventional wisdom on any corporate spending, executive development investments need to be fully understood and ranked against other company projects to ensure proper allocation of scarce organizational resources.” This is so true in the current economic climate. No organization can take a leap of faith to engage any form of human capital training without knowing that their current needs are being met and pains are being cared for.

There are a few factors that drive the need to track program and developmental investments:

- Increased accountability for all functional areas within the organization, driven by initiatives such as “Balanced Scorecard, Six Sigma, et al” and other process improvement programs. In areas such as training and development, which are known to produce a mix of tangible and intangible benefits, there is an increased desire by senior management to measure performance management outcomes and desired effects.

- Increased awareness by both executive management as well as HRD professionals on the availability of tools and techniques to quantify impact of executive development programs.

- A visible increase in Human Resource Development (HRD) professionals who view their departments as stand-alone business units/revenue centers and are utilizing department profit and loss statements as one measure of performance. Increasingly, professionals from non-HR departments have figured out the many benefits of joining HR teams to bring “bottom-line” perspective to human capital investments.

The following ¹information explains the results from the question relating to organizations that attempt to calculate ROI on executive development:

10% – Always: Each program is evaluated independently,
7% – Frequently: Most of our programs are evaluated,
15% – Sometimes: As appropriate, we will evaluate some of our programs,
21% – Rarely: Only a small number of programs are evaluated, and
46% – Never: We never measure ROI for leadership development.

¹From “Leadership Development: Challenges & Best Practices,” www.execsight.com/benchmarks.

Business Benefits and ROI Assumptions for The Process of LeaderShaping Executive Education Leadership and Organizational Behavior Program

The business world has quickly realized that their very best people, leaders and organizational specialists, are the greatest asset. Taking that potential and developing it is highly desirable. The Process of LeaderShaping, a transformational leadership and organizational behavior program that focuses on team building and strategic execution, is the stimulus to initiate and maintain the behavioral and emotional relationships necessary to develop leadership traits at every level of an organization.

With a dedicated perspective, participants are able to navigate through various steps six phases/stages to ensure they follow the right path for the greatest individual benefit – achieve Personal Proficiency – while attaining a greater level of Professional Mastery. LeaderShaping transforms top leaders to be more effective in their communication and more strategic in their execution. Regardless of circumstance, LeaderShaping takes every participant on their very own personal journey to explore their inner “self” while influencing others to find their voice. The journey explores the following six developmental stages:

Stage 1 is the “Recruit, the good-to-great highly capable individual who makes productive contributions through talent, knowledge, skills and good work habits. This individual is the one person in the environment that understands ‘people first, then the organization;’ hence, the development and achievement of the desired effects within the expected Future Picture.”

Stage 2 is the Experienced Manager “who is working to establish his/her ‘Leadership Signature’ to integrate their newly found skills to the achievement of team and organizational objectives (mission) and work effectively with others in a team-led environment. The Experienced Manager begins his/her growth by learning the constructs in the Memorandum of Understanding to find a voice; then, influences others to find theirs.”

Stage 3 is the competent Fleet Leader who “understands the criticality of employing organizational behavior across environments – organizes people and resources to develop an effective strategy forward using the critical Centers of Gravity to achieve the desired effects.”

Stage 4 is an effective Breakthrough Executor who “outlines the specific cognitive abilities that will be sought and cultivated by other leaders in the years ahead using the Five Minds for the Future: the disciplined mind, the synthesizing mind, the creating mind, the respectful mind, and the ethical mind; the leader who remains committed to a vigorous pursuit of a clear and compelling vision, stimulating higher performance standards using team maneuvers.”

Stage 5 is the Team/Project Leader who “employs the highest standards of customer service by achieving the five disciplines of greatness – these are the leaders who understand maneuver warfare and the disciplines within a Five Paragraph Order: SMEAC. They know an extraordinary organization is one that is driven by extraordinary people who make a distinctive impact and deliver superior performance over a long period of time – as a team unit.”

Stage 6 is the LeaderShaped Leader “who employs organizational strategic execution tactics (The OrgSx Paradigm) to permeate enduring greatness through a paradoxical blend of personal humility and professional will. All successful organizations have a single component in common; they have a strategic-executor at the helm who knows the disciplines of ‘strategic agility’ and ‘flawless execution.’ These leaders are described as being tactical in their approach, ferocious and fearless, yet modest with an unwavering commitment to high standards.” This is the leader who knows how to win!

LeaderShaping helps people to consider key talent management processes that drive high levels of business impact:

Performance Management
• Coaching and development drives much greater value than appraisal.
• Goal setting and goal-alignment drive high levels of impact.

Competency Analyses
• Skills-based workforce planning and critical job analysis is imperative to succeed.
• Competency management is a foundational process to make talent management work.

Assessments & Recruiting
• Assessment metrics and recruiting are key strategies and replace decentralized recruiting.
• Internal sourcing tools drive greater value than improvements in external sourcing.

Learning & Development
• Alignment with talent gaps is biggest area of impact.
• Tremendous growth in career development programs.

Based on interviews within our executive education program participants at Temple University since 2007, these four key elements were identified, which positively had an impact on the participants and their organizations upon returning to their perspective workplaces. Nonetheless, the environment (culture and organizational behavior) and the organizations processes received the greatest impact with staggering results.

Regardless of ROI, it is important to understand that no matter what measures are placed on the program itself, or what name the initiative goes under (team-based improvement effort, continuous improvement, total quality management, lean manufacturing, Human Sigma, or self-directed work teams) you must strive to improve results for internal and external customers. Few organizations and leaders, however, are totally pleased with the results their team improvement efforts produce because of the limited shelf life and excitement the program itself warrants upon completion (how often are the materials from the visiting program “never” shared with others and, in most cases, only become a part of the office library never to be looked at again?).

Here are a few things to consider when measuring if the program drives positive impact that is poised for the ROI you are seeking. The “twelve Cs for effective unit development,” (let’s get it straight, the only reason to engage a specific program is to institutionalize its effects across every level of the organization) offers successful maneuvers that develop effective, focused impacts that require attention to detail in the following areas.

It is important to think about the many questions posed to ensure the appropriate discussions are stimulating directional flow towards the organization’s success – if to measure ROI appropriately:

1. Clear Expectations: Has executive leadership (to be successful, there must be buy-in from the top) clearly communicated its expectations for the team’s performance and expected outcomes? Do team members understand why the team was created? Is the organization demonstrating consistency of purpose in supporting the team with resources of people, time and money? Does the work of the team receive sufficient emphasis as a priority in terms of the time, discussion, attention and interest directed its way by executive leaders?

2. Context: Do team members understand why they are participating on the team? Do they understand how the strategy of using teams will help the organization attain its communicated business goals? Can team members define their team’s importance to the accomplishment of goal orientation? Does the team understand where its work fits in the total context of the organization’s goals, principles, posture, vision, organizational behavior and values?

3. Commitment: Do team members want to participate on the team? Do team members feel the team mission is important? Are members committed to accomplishing the team mission and expected outcomes? Do team members perceive their service as valuable to the organization and to their own careers – is there a “win-win?” Do team members anticipate recognition for their contributions? Do team members expect their skills to grow and develop on the team? Are team members excited and challenged by the team opportunity?

4. Competence: Does the team feel that it has the appropriate people participating? (As an example, in a process improvement initiative, is each step of the process represented on the team?) Does the team feel that its members have the knowledge, skill and capability to address the issues for which the team was formed? If not, does the team have access to the help it needs? Does the team feel it has the resources, strategies and support needed to accomplish its mission/objectives and future picture?

5. Contract: Has the team taken its assigned area of responsibility and designed its own mission, vision, posture statement, Memorandum of Understanding and strategic intent to accomplish the mission. Has the team defined and communicated its goals; its anticipated outcomes and contributions; its timelines; and how it will measure both the outcomes of its work and the process the team followed to accomplish their task? Does the leadership team or other coordinating group support what the team has designed?

6. Command and Control: This can be defined as the exercise of authority and direction by a properly designated team leader or members on a team over assigned and attached resources in the accomplishment of the organization’s mission. That being said, does the team have enough freedom and empowerment to feel the ownership necessary to accomplish its contract? At the same time, do team members clearly understand their boundaries? How far may members go in pursuit of solutions? Are limitations (i.e. monetary and time resources) defined at the beginning of a project before the team experiences barriers and rework? Is the team’s reporting relationship and accountability understood by all members of the organization? Has the organization defined the team’s authority? To make recommendations? To implement its plan? Is there a defined review process so both the team and the organization are consistently aligned in direction and purpose? Do team members hold each other accountable for project timelines, commitments and results? Does the organization have a plan to increase opportunities for self-management among organization members?

7. Collaboration (Coalition of Forces): Does the team understand team and group process? Do members understand the stages of group development? Are team members working together effectively interpersonally? Do all team members understand the roles and responsibilities of team members (Concept of the “Bus”)? Team leaders? Can the team approach problem solving, process improvement, goal setting and measurement jointly? Do team members cooperate to accomplish the team contract? Has the team established group norms or rules of conduct in areas such as LeaderShaping, conflict resolution, consensus decision making and meeting management? Is the team using an appropriate strategy to accomplish its action plan?

8. Communication: Are team members clear about the priority of their tasks? Is there an established method for the teams to give feedback and receive honest performance feedback? Does the organization provide important business information regularly? Do the teams understand the complete context for their existence? Do team members communicate clearly and honestly with each other? Do team members bring diverse opinions to the table? Are necessary conflicts raised and addressed? Do team members understand that conflict is necessary for lessons learned?

9. Creative Innovation: Is the organization really interested in change? Does it understand the contextual implications for the change? Does it value creative thinking, transformational thinking, unique solutions and new ideation? Does it reward people who take reasonable risks to make improvements? Or does it reward the people who fit in and maintain the status quo? Does it provide the training, education, access to publications and textual resources, performance management assessments and infield trips necessary to stimulate new thinking?

10. Consequences: Do team members feel responsible and accountable for team achievements? Do team members feel responsible and accountable for other team members? Are rewards and recognition supplied when teams are successful? Not successful? Is reasonable risk respected and encouraged in the organization? Do team members fear reprisal? Do team members spend their time finger pointing rather than resolving problems during the necessary Debrief sessions? Is the organization designing reward systems that recognize both team and individual performance and organizational behavior? Is the organization planning to share gains and increased profitability with team and individual contributors? Do team members feel responsible and accountable for team and individual strategic execution tactics? Can contributors see their impact on increased organization success?

11. Coordination: Are teams coordinated by a central leadership team that assists the groups to obtain what they need for success? Are teams coordinated by a designated “Red Team,” one who works to employ contingency script that assists the team with working out problems and challenges as a precursor to engaging the mission? Have priorities and resource allocation been planned across departments? Have the proper configurations or reconfigurations been made and planned for across departments? Do teams understand the concept of the internal customer – the next process, anyone to whom they provide a product or a service? Are cross-functional and multi-department teams common and working together effectively and efficiently? Is the organization developing a customer-focused process-centric orientation and moving away from traditional departmental thinking?

12. Cultural Change – Collective Behaviors: Does the organization recognize that the team-based, collaborative, empowering, enabling organizational culture of the future is different than the traditional, hierarchical organization it may currently be? Is the team a networked unit or hierarchical one? Is the organization planning to or in the process of changing how it rewards, recognizes, appraises, hires, develops, plans with, motivates and manages the people it employs? Does the organization plan to use failures for learning and support reasonable risk? Does the organization recognize that the more it can change its climate to support teams, the more it will receive in pay back (ROI) from the work of the teams?

Spend time and attention on each of these “twelve Cs for effective unit development” to ensure your work teams contribute most effectively to your business success after completing an executive education program. In a position of leadership, your team members will respond favorably, your business will soar to new heights and empowered people will “own” and be responsible for their work processes. Everyone will find his/her voice – this is ROI that permeates enduring freedoms (breakthroughs) and successful outcomes that lasts.

Can you ask for anything better in the workplace than what is proposed here? There’s a table of critical information to support this segment of the article that you can request by email at Solutions@thebisongroup.com (In your headline, remember to include the title of the article and request the “best practices” table).

The table outlines “best practices” in measuring and maximizing ROI in executive education and development programs like The Process of LeaderShaping. No more will I have to agonize on the original question posed that sparked me writing this article. The factors that drive positive impact & ROI for executive style leadership programs lie in the hands of the participants going through it and their response to the instruction upon entering back into the workplace.

So, measuring ROI begins in the decision and selection process of the individuals chosen to attend. Everything else is a culmination of everyone doing their part to ensure successful outcomes within the desired effects in the end.

Reference
Shortcut the original article:
http://www.mannaz.com/Mail.asp?MailID=118&TopicID=1374

Scott Saslow is the Executive Director of The Institute of Executive Development, a company that delivers a unique service to executive development professionals by providing an unbiased source of information on the best practices and innovative ideas in executive development. Clients of The Institute include professionals from global companies who manage their organization’s executive development programs, as well as recognized experts who advise, publish, and speak on industry topics. The Institute is the largest in its field and most dynamic in terms of its services. There are currently over 4,000 individuals from 85 countries who use the Institute. As head of the organization, Mr. Saslow is responsible for all strategy and operations. Mr. Saslow also manages the design and delivery of multiple market studies in executive development such as “Transforming Corporate Leadership: Best Practices in Executive Education” and “Leadership Development in European Organizations.” In all, Mr. Saslow has authored over 15 articles and in-depth research reports on the field of executive development for publications such as CLO Magazine, Strategic HR Review, Leadership in Action, and ASTD’s Leadership/OD Newsletter.

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