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WHAT IMPACT SHOULD LEADERSHIP DEVELOPMENT DELIVER?

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Seeking the long-term…

We all say that leadership development is important but does it really have impact?

This is particularly important when you are aiming to invest in the development of a key section of your leadership team.

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Short-term impact

Some of the short-term (just after the program) indicators of impact can include:

  • People are talking about it positively – both participants and their managers – (there may be some pockets of negative talk and this is useful to investigate)
  • Participants are behaving differently and taking action, and this is being seen by their managers
  • You are seeing more “informal” connections happening across the organisation.

Long-term impact

Research evidence suggests leadership development should deliver long-term impact for:

  • Improved individual, team and organisational performance
  • Improved organisational reputation with external and internal stakeholders
  • Increased agility and ability to lead in complex business environments
  • Strengthened employee engagement and organisational culture
  • Increased attraction and retention of talented people
  • Reducing leader derailment and replacement costs
  • Which all support sustained and sustainable performance

While of course there are many contextual issues that impact upon these type of organisational results, leadership development is a contributor. Some useful research is provided below.

CONTRIBUTING TO THE DIALOGUE ABOUT LEADERSHIP IMPACT AND ITS DEVELOPMENT

While there is a lot written and researched about leadership development, particularly in relation to the “capabilities/competencies” that need to be delivered and about the “how to” or methods of development, much less is available help us explore what we should seeking through leadership development.

  1. Improved individual, team and organisational performance
  • Organisations with the highest quality leaders were 13 times more likely to out-perform their competition in key bottom-line metrics such as financial performance, quality of products and services, employee engagement and customer satisfaction.[1]
  • High-performing workplaces – characterised by leadership that supports innovation, employee engagement, fairness and customer focus – have profit margins nearly three times higher than low-performing workplaces.[2]
  • These workplaces are better at achieving their financial goals, are stronger at building customer relationships, are more innovative and recognise that leadership capability is fundamental to their success. [3]
  • The recent Study of Australian Leadership (2016) noted that leadership is also foundational to the performance of organisations in more complex business environments.[4]
  1. Improved organisational reputation with stakeholders

Research indicates that the effectiveness of the senior leadership team is regarded as the second most important factor (after financial results) in determining business success [5] and the evidence includes: the quality and reputation of leadership make a significant difference to stakeholder and shareholder support for organisations (research indicates that investment analysts place a premium of 15.75% on effective leadership).[6]

  1. Greater agility and decision-making in a complex operating environment

A recent IBM study, of 1,500 CEOs worldwide, identified complexity as a factor increasingly affecting the leadership capabilities required across organisations [7] and some interesting data includes:

  • While leaders being are being given more responsibility, being asked to achieve more and broader objectives and to deliver results faster, studies suggest that only 7.3% of leaders are considered to have the full skill set of capabilities that are required to work in this complex and emergent environment.[8]
  • Research indicates that some of these new capabilities include:
  • a global cultural perspective;
  • a mindset of growth and openness to understand the environment;
  • an ability to quickly adapt to changing circumstances;
  • a capability to engage people across the business in change; and
  • an ability to identify and respond to complex operating environments.[9]
  1. Improved culture and employee engagement in organisational performance

Leadership quality affects much more than the financial bottom-line; it also affects employee retention and engagement:

  • a recent study has identified organisations with higher-quality leadership as being up to three times more likely to retain more employees than their competition.[10]
  • another study indicates that high performing workplaces have higher levels of commitment and engagement than in other workplaces.[11]
  • High-performing workplaces with effective leaders have better results in attracting and retaining good quality people as well as in building employee engagement and job satisfaction.[12]
  1. Greater organisational ability to attract and retain talented employees

Where talent management in organisations once focused on recruitment, the focus is now broader. Development and support during transition are the keys and the research [13] In this way, organisations can create a culture in which talented individuals can thrive.[14]

  1. Reduction of leadership derailment

Leaders in transition – including moving functional areas or being promoted from individual contributor to management – are particularly vulnerable to disillusionment and derailment.

‘Leadership derailment’ can include behaviours such as poor performance or lack of delivery; not updating leadership style; lacking core skills for new challenges; and poor focus on people development, is expensive for organisations.[15]

Organisations can support transition, and reduce derailment, through: being clear about the capabilities required at each leadership level; establishing mentors for individuals taking up new roles; and requiring that individuals take up leadership development (such as executive coaching) to support transitions.[16]

© Amanda Martin 2016

Amanda

amanda@proofofleadership.com

 

[1] Boatman, J. & Wellings, R.S. (2011) Global Leadership Forecast. DDI.

[2] Boedker, C., Vidgen, R., Meagher, K., Cogin, A., Mouritsen, J., & Runnalls, J. M., (2011) Leadership, culture and management practices of high performing workplaces in Australia: the high performing workplaces index, Society for Knowledge Economics.

[3] Ibid.

[4] Study of Australian Leadership (SAL) 201, p.23.

[5] Holland, S. & Thom, M. (2012). The leadership premium: How Companies win the confidence of investors. Deloitte.

[6] Ibid.

[7] Ancona, D. (2005). Leadership in an Age of Uncertainty. MIT Leadership Centre.

[8] CEB. The rise of the network leader: reframing leadership in the new work environment. Executive Guidance for 2014.

[9] Ibid.

[10] Boatman, J. & Wellings, R.S., op.cit.

[11] Study of Australian Leadership (SAL) 201, p.26.

[12] Deloitte 2013 Human Capital Trends 2013 Leading Indicators. Deloitte: U.S. edition.

[13] Deloitte 2013 Human Capital Trends 2013 Leading Indicators. Deloitte: U.S. edition.

[14] Ibid.

[15] Bumker, Kram, & Ting, 2002; Hughes, Ginnett & Curphy, 2008.

[16] Watkins, M. (2003). The First 90 Days: Critical Success Strategies for New Leaders at All Levels. Boston, MA: Harvard Business School Publishing.

 

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Measuring the impact of leadership development – 4 Steps

4stepsforimpactYou are only 4 steps away from measuring the impact of your leadership development program

This article outlines what I’ve learnt about measuring the impact of leadership development both from experience and from reviewing the research.

While most people say measurement is important, only around 3% of organisations globally measure the results achieved through leadership development and the impact on organisational outcomes. [i].

For a full background to the changes in leadership development that are influencing how to measure leadership development impact, please go to our Articles page.

Measuring leadership development impact

These four steps are drawn from experience, together with a review of the academic research and program evaluation case studies. The questions, within each step of the process, support measuring the impact of leadership development beyond the level of individual participant to include results for the organisation:

  1. embedding measurement into the design of the development from the beginning;
  2. establishing program learning goals so that learning activities clearly contribute to individual and organisational change and results;
  3. developing a robust measurement methodology creating multiple points of evidence at the same time as recognizing the reality of organisational life; and
  4. reporting results to the people who have sponsored, supported and been a part of the development both celebrates the outcomes and provides accountability for their investment in the program.

4 Steps – designing your impact measurement strategy

1. Embed measurement into the design of the development activity
Key questions to consider during the design of a leadership program or development activity are:

  • What are the metrics that will tell the organisation that the program has been successful?
  • How will this program contribute to the organisation’s outcomes and strategy?
  • How will the program deliver on the organisation’s HR strategy?
  • Who are the key stakeholders for this impact measurement strategy?
  • How does the program fit with the overall leadership capabilities required for this organisation?
  • What are the assumptions underlying the design of the program and how will the design contribute to these objectives [ii]

These questions contribute to the development of robust program objectives, reflecting what the organisation is aiming to achieve, right from the early phases of the program design.

This is one of the most difficult stages of measuring impact – these questions are not easy to answer and may feel frustrating when stakeholders ‘just want to get the program going’.

2. Establish program learning goals
At this stage, program developers should be asking:

  • How will this program support participants to build their capability and to deliver on the organisation’s strategy?
  • What are the most effective learning activities that will ensure these learning goals are achieved?
  • How will these learning activities build on each other to deliver impact?

The temptation is to focus on the instruments, methods and tools that support development such as 360 degree feedback, executive coaching, digital learning, and specific learning models. However, bolting these together without considering how they support learning doesn’t deliver a well-designed and impactful program.

3. Develop a program measurement methodology
Embedding measurement into the learning design means asking:

  • What data will be needed to measure these program objectives?
  • Which measurement methods will help identify the required changes in knowledge or behaviour?
  • What is the cost of undertaking these measurement methods?
    What is the best timing for collecting data?
  • How will this data contribute evidence of the link to the program objectives?
  • How will the data be used to support iterative learning design, participant learning and engagement with program stakeholders?
  • What else is happening in the organisation that may affect the data collection or results?
  • While being founded in the rigour of research, methods for measurement of impact also have to be balanced with the relevance of organisational life and must be pragmatic.

It’s also important to identify whether the resulting data can be integrated, analysed and reported in a timely way to tell the story of the impact of the program for key stakeholders.

4. Report the results
In this stage, understanding who the program stakeholders are is crucial, as this guides reporting and insights:

  • What is the data saying about the program results when measured against the program objectives and learning goals?
  • Who needs to be involved in reviewing the data and in identifying insights?
  • What are the key insights: what is the analysis showing or not showing about the program impact for participants, their teams, their direct line managers, and for the enterprise more broadly?
  • What are the recommendations for change arising from the evaluation results and key insights?

Taking action: translating leadership development into impact

Understanding the impact of leadership development programs is crucial in an economic environment where organisations are under increasing pressure.

Learning and development programs are often the first to be cut in these circumstances yet there is significant evidence to demonstrate that investing in the ongoing development of leaders is essential to organisational success.

Understanding the impact and effectiveness of development is foundational in identifying what has been achieved and also what can be achieved, and it’s time that more than 3% of organisations use more effective approaches to measurement than “happy sheets”.


References

[i] McGonagill, G & Pruyn, P W. 2010 Leadership development in the US: Principles and Patterns of Best Practice, Bertelsmann Stiftung Leadership Series

[ii] Packard, T and Jones, L. 2015. An outcomes evaluation of a leadership development initiative. Journal of Management Development Vol 34, No 2 pp 153-168

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