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Maximizing ROI on Leadership Training Programs
Leadership training programs range considerably in quality.
“Feel-good” team exercises may be a fun diversion, but they may not produce the ROI you want.
From the quick, “feel good” seminars that let managers check off a box stating they’ve implemented leadership training to in-depth training programs with pre-assessments, post-assessments, and major time investment, leadership training programs abound.
But you would be hard pressed to find an upper manager interested in implementing a program that won’t produce a measurable, positive outcome. Therefore, if you’re in charge of leadership development, you have to be ready to make a positive business case for any leadership training program you are interested in using.
Many of the metrics that assess the effectiveness of leadership training programs are nebulous, and may not be straightforward to measure. But that doesn’t mean they can’t be measured. You simply have to know what to look for and how to assess performance before and after the leadership training program.
Potential Outcomes from Leadership Training Programs
After a successful leadership training program, you should expect to see higher employee productivity, better customer satisfaction, and better employee retention. Clearly, some of these will take more time than others to recognize, so it’s important to understand the time scale on which you can expect to see improvement.
For example, employee productivity may increase very soon after a team leader completes leadership training, particularly if the leader is in regular communication with the team about the training and expected outcomes. It may take a bit longer to see higher levels of customer satisfaction simply because of the time it takes for a transaction to process from beginning to end. And it may take a period of months before you can accurately assess employee turnover rates, but that’s OK, because employee turnover is a critical metric, and one worth examining over the long term.
Collecting the Data That Indicates ROI
Measure pre- and post-training skills and attitudes to help quantify training ROI.
To be able to measure the effectiveness of a leadership training program, you should conduct pre- and post-training assessments of participants. Better still, conduct those assessments as well as collecting “360-degree” feedback from the trainees’ direct reports, peers, and superiors. Differences in pre- and post-training data should be evident. And over the longer term, you can look at how many people who completed the leadership training program ended up being promoted to having greater responsibilities, which is a good measure of their leadership abilities.
Articulate Business Needs and Choose Trainees Carefully
Before choosing a leadership training program, it’s essential that you define what you want the end results to be. For one company that may be bringing in 10% more clients over a defined time period, while for another it may be reducing team turnover rates by 30%.
When considering candidates for leadership training programs, talk to them and ask them what they want and need in terms of leadership training. They should be able to answer the question with some specificity: “I want to learn which technology to buy for the call center team to help them work more efficiently,” or “I need to delegate key tasks more effectively,” are statements that indicate someone is ready for training in being a more effective leader. It is the participants who genuinely engage with the program who will deliver the results showing a positive ROI for leadership training.
No executive or senior manager wants to spend money on a leadership training program that doesn’t produce a measurable ROI. At the same time, it’s important for top leaders to understand that measuring ROI for leadership training programs isn’t the same as measuring ROI on a new piece of equipment. Leadership training ROI is measurable, but it may require more work, more listening, and more reliance on qualitative factors than measuring other types of ROI.
I have seen first-hand how outstanding leadership training programs can propel companies forward. Making the case for leadership training may require producing some hard numbers for the decision-makers who control how resources are spent. But making a business case, and then demonstrating the result afterward are powerfully convincing and should ultimately make your company a better place to work. If you want to learn more about leadership training, corporate culture, and cultural transformation, I encourage you to check out my books, which explore these critical topics in depth.