The Global Leadership Forecast report estimates that about 18% of all companies investing in Leadership Development initiatives collect data and metrics that allow them to calculate the ROI of this investment.
Flip it, like I love to do, and this means that a whopping 82% of organizations do not collect data and metrics that help them evaluate the effectiveness of their Leadership Development initiatives on their top-line and bottom-line.
Consider this in the context that the Leadership Development industry receives ~$160 billion in the United States and ~$360 billion globally in annual spending on employee training and education (Source: Training Industry Report). This is hugely problematic! Any of us who consider ourselves good business stewards should be rattled by this statistic. Especially if we are also thought leaders in the Leadership Development industry, we must be able to ideate, innovate, develop and deploy, at scale, solutions that allow organizations to measure the ROI of their leadership development initiatives.
This made me curious, and I wanted to delve into why we have an 82% problem. I searched for the term “Leadership Development ROI” on Google, and there were 23.6M results returned. I obviously could not go through all the references produced. Still, it was pretty telling that when I scrolled the first 5-10 pages of results, an overwhelming number of them dealt with “Leadership Training” and not “Leadership Development.”
Here is my hypothesis: we have been doling out training instead of development. No wonder there is no data to measure the long-term impact of Leadership Development initiatives on business performance.
To fully unpack this, let me contrast ‘training’ vs. ‘development’ for more context. When we train our leaders, we allow them to acquire skills and competencies specific to a particular job/task in the short term. On the other hand, development is when we provide support to improve a leader’s overall capacity and capability to drive growth over the long term. Training aims to enhance current work, whereas development prepares leaders for future challenges. See, we should be seeking to change the behaviors of our Leaders and not just their skills. The other aspect is that when we focus on ‘training’ vs. ‘development,’ we are not meeting the basic requirements of an Evidence-Based Practice (EBP). Having an EBP means we are motivated by the principles of implementation science. This is “the scientific study of methods to promote the systematic uptake of EBPs into routine practice, and, hence, to improve the quality and effectiveness of services.”
Simply put, “Leadership Development” gives us the implementation science framework to measure changes in response to planned interventions that “Leadership Training” does not! Bringing it all back full circle, we are doling out Leadership Training and calling it Leadership Development. In my opinion, this is how we end up in a situation where 8 out of 10 organizations do not have a way to measure the ROI of their Leadership Development Initiatives!
As I mentioned, receiving ~$160 billion in the United States and ~$360 billion globally in annual spending should demand more accountability. There is no excuse for not requiring an ROI on Leadership Development initiatives. This is entirely possible if one were to apply the principles of implementation science to the space of Leadership Development. This is not magic – very logical if one changes their mindset and willingness to accept new paradigms.
We at The Rejuvi Venture Inc. have done precisely this and innovated the implementation of Leadership Development with a distinct EBP mindset and application of robust implementation science principles such that we can measure the impact of Leadership Development interventions on a business’ top-line and bottom-line metrics. In our world, 10 out of 10 organizations will be able to measure the ROI of their Leadership Development Initiatives!
It is high time we shift our mindsets to imagine a world with more accountability and control of leadership capability and capacity because that world is already here. As stewards of organizational growth, it is our obligation to achieve sophistication and maturity where we can measure attributes of Leadership Capability and Capacity such that we can control these to achieve organizational growth.
It is high time we empower 100% of our organizations to measure ROI on their Leadership Development Initiatives!
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