11 Mar 2020

How can we improve ROI in leadership development?

While our increasingly complex and competitive world of work supports the argument for ongoing investment in developing innovative and resilient leaders, report after report cites that the way most organisations are approaching leadership development is sub-par.

According to a recent Fortune survey, only 7 percent of CEOs believe their companies are building effective global leaders. Just 10 percent said that their leadership-development initiatives have a clear business impact.

Four answers to a $300 billion question.

It’s estimated that global investment in leadership development is up to US$300 billion every year. Which begs the question – just how much value is actually generated from that spend?

While our increasingly complex and competitive world of work supports the argument for ongoing investment in developing innovative and resilient leaders, report after report cites that the way most organisations are approaching this is sub-par.

According to a recent Fortune survey, only 7 percent of CEOs believe their companies are building effective global leaders. Just 10 percent said that their leadership-development initiatives have a clear business impact.

So what – if anything – can we do to address the underperformance of most leadership development programmes?

That question is the focus of a McKinsey study ‘Why leadership-development programs fail’, which points to four key areas that organisations typically struggle with. To help you get a handle on how you can improve the value delivered by your leadership development efforts, we have used these concepts to create a simple guide to delivering programmes that have a positive ROI.

Four ways to improve ROI from your leadership development programme:

  1. Focus on context rather than content

Traditionally, leadership development programmes emphasise content (i.e. the technical leadership skills that are being passed from trainer to trainee). Makes sense, right? After all, we’re teaching people how to lead. Not quite.

Turns out, it’s actually the context of the learning experience that matters most in determining how worthwhile the development process is.

Rather than what the McKinsey study describes as a ‘one size fits all’ mentality when it comes to what leadership looks like, organisations should instead zero in on the two or three things that matter most in achieving broader strategic objectives, and build their programmes around those.

In doing so, key messages are much more likely to resonate with leaders in development and, therefore, become a focus for them going forward.

  • Bridge the knowing-doing gap

McKinsey’s study states “even after very basic training sessions, adults typically retain just 10% of what they hear in classroom lectures, versus nearly two-thirds when they learn by doing.”

At Mantle, we believe wholeheartedly in practical learning and define learning as ‘thinking about and doing things differently’. Leadership, in this context, is a verb: discovered in action and demonstrated in its application.

In ‘The Knowing-Doing Gap’ (HBS Press), Stanford professors Jeffrey Pfeffer and Robert I. Sutton point to embedded forces that undermine many organisations’ ability to turn knowledge into action. Their book has chapters with titles such as “When memory is a substitute for thinking” and “When talk is a substitute for action” – suggesting, quite rightly, that there are interconnected factors which support or impede action-taking. 

Fortunately, the solution is simple – allow people to try (and potentially fail!) within environments that support and encourage considered risk-taking.

  • Never underestimate culture

For consultants, coaches and even in-house leadership training programs, preparing to battle long-established mindsets within an organisation can be the most profound challenge of all.

Why? Because, leadership development is essentially a change initiative. Not only are we giving people new skills and tools – critically, we are asking them to develop their mindset and ways of thinking.

This is hard to do in very busy and risk adverse cultures because without receptivity, insights cannot occur.

Transformational leadership initiatives, on an individual or company-wide basis, always start at the same place: where you are now. No leadership training program can genuinely succeed unless the organisation is willing to look beyond these seven words: “that’s the way we have always done things.

If you’re developing (or redeveloping) your leadership programme, ensure you emphasise the need to address culture and mindset first and foremost, at every level of the organisation.

  • Measure – and act accordingly

How do you know if your leadership initiative was a success? As a leadership development industry, we have persuaded our colleagues and clients that measurement is difficult, and that learners’ perceptions of value are all that matters.

The fact that we struggle to tie targeted behavioural change to useful business impact is simply not good enough. If leadership development as a practice is to have substantial positive impact, we need to lift the game on measurement.

That’s why, before embarking on any leadership development programme, we believe it’s critical to identify measurable outcomes (tied to the organisation’s key strategic objectives) that can be tracked and analysed consistently.

The bottom line is that traditional leadership development approaches will not cut it going forward. Leadership programmes need to be better designed and better embedded into the organisation, with learners better supported.

Without the right context, a willingness to understand the mindset of the learner and company, and the ability to tie concepts to real-world scenarios, even the best-intentioned leadership programs will not stick. Want to find out more about how to create leadership development programmes that deliver measurable, positive ROI? Get in touch.

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Phone: 021 833 841

Email: [email protected]

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