Measuring the ROI of leadership development is complex and confusing. I won’t solve all the problems and answer all the questions in this short article. But let me give you some new and fresh things to consider as you try to measure the effectiveness of your leaders.
To measure ROI of leadership development more effectively, we need to do these four things carefully:
- Acknowledge the complexity
- Start at the beginning
- Think process not event
- Allow for the eye test
Acknowledge the Complexity
Leadership is complex.
Business and organizational work are complex.
And while we know that the effectiveness of leaders impacts every part of the organizational puzzle, when you try to measure correlation and causality of events against leadership effectiveness, it gets hard.
If you want to measure the ROI of your leadership development efforts, make sure you remember:
- Acknowledge that you can’t measure it perfectly
- Don’t stop imperfect measures from measuring something
- Consider a wider range of factors in your measurements
- Look for trends in your data
Start at the Beginning
Too often when trying to measure the effectiveness of leadership development, we get lost in the complexity. I urge you not to do that. Step back and ask yourself these questions:
- What are the results levers we most want to drive?
- What are the behaviors that drive those results?
- How can we confirm those assumptions?
- How can we measure or observe them?
If you are noticing that these questions take you back to what you are developing and why, you got my point. Once you have clear answers to these questions, you can bound and scope your assessment/measurement more effectively.
Think Process Not Event
Most leadership development efforts are viewed as individual events. When we view it that way, then we try to measure that event as a single entity in a complex world.
Your experience tells you doing that is hard and frustrating.
But if you view leadership development not as an event but an ongoing process, you will think about measuring differently. This will lead you to calculate ROI over time more than episodically (based on a singular event). Making this mental shift will be the biggest way for you to clarify how and what to measure.
Allow For the Eye Test
Sports performance have more analytics associated with them than most businesses. If you are a sports fan, you will often hear the discussion about comparing the analytics to “the eye test.”
Analytics give us data; the eye test can confirm your data or lead you to question things and look a lite deeper.
We should definitely try to measure the ROI of our leadership development efforts, but we need to realize that we aren’t measuring a mechanical system, but a human one. Which means we need to bring more than pure numbers and static truths to our analysis.
When we pair the math with our observations, we’ll have a fuller picture of what we are trying to understand with our measurements in the first place.
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