Measuring Leadership Development: Quantify Your Program's Impact and ROI on Organizational Performance [NOOK Book]


Prove the financial value of your programs—so funders can’t say no

“Not measuring the impact of leadership development is like dieting without weighing-in. This outstanding book offers a very logical and practical approach to measuring the impact of leadership development.”
—Dave Ulrich, Professor, University of Michigan, Ross School of Business, and partner, The RBL Group

“This book explains many of the reasons why current leadership development practices miss the mark. A ...

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Measuring Leadership Development: Quantify Your Program's Impact and ROI on Organizational Performance

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Prove the financial value of your programs—so funders can’t say no

“Not measuring the impact of leadership development is like dieting without weighing-in. This outstanding book offers a very logical and practical approach to measuring the impact of leadership development.”
—Dave Ulrich, Professor, University of Michigan, Ross School of Business, and partner, The RBL Group

“This book explains many of the reasons why current leadership development practices miss the mark. A must-read for anyone who wishes to implement a meaningful strategy for developing leaders in their organization.”
—Rajeev Peshawaria, Executive Director and CEO, iclif Leadership and Governance Centre

“Leadership development is an area we instinctively know we need in organizations, but we struggle with how to link it to results. Patti, Jack, and Rebecca make measurement a clear and simple process.”
—Whitney Hischier, Assistant Dean, Center for Executive Education, University of California, Berkeley, Haas School of Business

Measuring Leadership Development is one of the best business road maps I’ve seen in quite some time. These three doctors of philosophy offer the right prescription for ailing corporations in today’s business climate. I highly recommend it as an essential navigational tool in any corporate handbook.”
—Marshall Goldsmith, million-selling author of the New York Times bestsellers MOJO and What Got Your Here Won’t Get You There

“In addition to synthesizing and integrating various streams of information into something meaningful and compelling, the authors outline the fundamental questions that anyone who truly cares about making a difference should answer and they also provide pragmatic approaches and applications to insure high impact.”
—Teresa Roche, Vice President and Chief Learning Officer, Agilent Technologies

About the Book:

Leadership development is one of the driving forces behind strong organizational performance. However, when executives look to run their organizations leaner, they view it as a luxury. Now, Measuring Leadership Development gives talent managers a full toolkit for presenting their leadership development programs in terms of identifiable business benefits, including—for the first time—an accurate bottom line for return on investment in the program.

Jack and Patti Phillips have set the standard for ROI Methodology, and here, with Rebecca Ray, they show you how to measure, in real numbers, the impact a leadership development program has on an organization. This complete package gives you sought-after advice for developing leaders with a conveniently measurable, results-based approach as well as the tools you need to collect, analyze, and report relevant data. With this one-of-a-kind book, you can get up and running fast to:

  • Design, deliver, and sustain a periodic ROI evaluation process
  • Provide executives and stakeholders with the confirmable data they demand in terms they understand
  • Use your evaluation data to drive improvement in your organization
  • Effectively value the ROI of a leadership development program using the same standard ratio accountants use for equipment and buildings

Colorful case studies from some of the world’s best-known companies illustrate how to establish best practices and avoid common pitfalls. You will turn to this book again and again for its authoritative, go-to advice and techniques.

Take the lead in improving your company’s performance with Measuring Leadership Development.

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Product Details

  • ISBN-13: 9780071781213
  • Publisher: McGraw-Hill Education
  • Publication date: 3/9/2012
  • Sold by: Barnes & Noble
  • Format: eBook
  • Edition number: 1
  • Pages: 304
  • Sales rank: 1,124,955
  • File size: 7 MB

Meet the Author

Jack Phillips, Ph.D., former bank president and head of HR for major organizations, has written or edited more than 50 books. He conducts workshops, provides consulting services, and speaks at conferences around the world. His work has been featured in the Wall Street Journal, BusinessWeek, Fortune magazine, and on CNN.
Patricia Pulliam Phillips, Ph.D., is president and CEO of the ROI Institute, Inc., the leading source of ROI competency building, implementation support, networking, and research. She has authored or edited more than 30 books on measurement and evaluation, including ROI. She regularly conducts workshops and provides consulting services worldwide.
Rebecca L. Ray, Ph.D., is senior vice president, human capital at The Conference Board and the leader of the Human Capital Practice. She was named “Chief Learning Officer of the Year” by Chief Learning Officer magazine.

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Read an Excerpt


Quantify Your Program's Impact and ROI on Organizational Performance

By Jack Phillips, PATRICIA PULLIAM PHILLIPS, Rebecca Ray

The McGraw-Hill Companies, Inc.

Copyright © 2012Jack Phillips, Patricia Pulliam Phillips, and Rebecca Ray
All rights reserved.
ISBN: 978-0-07-178121-3



Leadership Development Has Never Been More Critical

In a world of strident shareholder demand, shifting business priorities, disruptive innovation, rapidly changing demographic and geopolitical forces, regulatory changes, and increasingly competitive business environments, leaders who envision and execute today's strategy as well as anticipate and prepare for tomorrow's challenges are more critical than ever. Leaders are expected to demonstrate a deep understanding of their organization's business as well as its products and services, master the nuances of global markets, and conduct themselves in ethical ways. They must respond quickly to competitive maneuvers, foster innovation, communicate a compelling vision, and develop not only their globally distributed teams but also the next generation of leaders, all while delivering long-term value measured by short-term results. Becoming such a leader is like reaching the Mt. Everest of leadership development—and attainment is elusive. The results of failure to produce such leaders are often public, usually pronounced, and always profound.

Yet, strong leaders can be developed if organizations, business leaders, and those who head leadership development functions create the systems, processes, leader involvement, and accountability that are crucial to success. Some organizations seem to have reached the summit. Others struggle against the vertical climb. Still others remain unable to gain a foothold. It's not going to get any easier.

What Do We Mean by Leader, and How Do We Define Success?

What makes an effective, successful leader? What does it take to be successful, and how is that success determined? Is the success to be evaluated quarterly and based on results delivered to the satisfaction of analysts and shareholders? Is it to be judged by results delivered during the tenure in the role, over the course of a lifetime of leadership, or ultimately by the future success of the company, business unit, or team after the leader has departed? What role does character play in this examination of business impact? What characteristics and competencies of a leader distinguish the "best" from the merely "very good"?

As a core criterion, the expectation of leaders has always been to "get the job done" by managing assets and people. Often missing has been a more holistic view of the process in terms of how to motivate, engage, reward, and lead employees.

Twentieth-century research began to crystallize the way effective organizational leaders are viewed and subsequently developed. Few depictions of effective leadership have withstood the test of time as well as that of Peter Drucker, who articulated the eight core practices of the effective leaders he worked with over a 60-year career. According to Drucker, effective leaders:

1. Ask, "What needs to be done?"

2. Ask, "What is right for the enterprise?"

3. Develop action plans.

4. Take responsibility for decisions.

5. Take responsibility for communicating.

6. Are focused on opportunities rather than on problems.

7. Run productive meetings.

8. Think and say "we" rather than "I."

As he saw it, these questions "gave them the knowledge they needed ... helped them convert this knowledge into action ... [and] ensured that the whole organization felt responsible and accountable."

One researcher answered the question by offering that in addition to IQ and technical skills, these emotional intelligence attributes characterize the true leader:

1. Self-awareness

2. Self-regulation

3. Motivation

4. Empathy

5. Social skill

Another offered a profile of Level 5 leaders who credit others with success yet assume personal responsibility for failure. These leaders are characterized by humility and a will to succeed that does not tolerate mediocrity; they are quietly and calmly determined to succeed.

Over the years, we've seen the "one-minute manager" joined by the "situational leader" and the "servant leader" and by those leaders who are values driven, principle centered, or searching for "true north." While definitions will undoubtedly continue to evolve, the fundamental description of a leader as one who delivers results in a way that affirms, engages, inspires, and respects others is unlikely to fade from view.

Why Is Effective Leadership Critical?

Effective leadership is critical to the success, and often the survival, of corporations. In recent years, we have witnessed the demise or serious crippling of companies because of the inability of leaders to competently and ethically lead, creating a breach of trust with the public as well as with employees. Newspaper headlines and, in some cases, high-profile trials remind us of the failures of leadership. They are not confined to a particular region or industry, as scandals surrounding such companies as WorldCom, Satyam Computer Services, Adelphia, Parmalat, Tyco International, Clearstream, Enron, Global Crossing, and Arthur Anderson can attest. While most companies are not in the headlines for their leadership failures, they are all accountable for business results.

CEOs Care About Leadership

In the wake of a crushing global crisis, companies and their leaders are shifting from survival mode to a business growth approach. It is no wonder that leadership development was on the minds of CEOs around the world when they responded to the Conference Board's annual CEO Challenge survey. When asked to rank their top challenges for the coming 12 months, they ranked business growth first. The surprise was that, after an absence from the 2009 and 2010 "top 10" findings, talent emerged as the second most important global challenge; Asian CEOs ranked it number one, ahead of business growth. CEOs thought talent, innovation, and cost optimization would fuel business growth. When asked about the strategies CEOs would implement to address the talent challenge, these were the top 10:

1. Improve leadership development programs; grow talent internally.

2. Enhance the effectiveness of the senior management team.

3. Provide employee training and development.

4. Improve leadership succession planning.

5. Hire more talent in the open market.

6. Promote and reward entrepreneurship and risk taking.

7. Raise employee engagement.

8. Increase diversity and cross-cultural competencies.

9. Flatten the organization, and empower leadership from the bottom up.

10. Redesign financial rewards and incentives.

Even a cursory read of the top strategies indicates a focus on internal leadership (improving the existing internal leadership base, especially at the top of the house; up-skilling all employees; improving leadership succession) before fighting for talent in the open market. In Asia, where talent was scarce before the global financial crisis, "hiring more talent in the open market" was ranked eleventh, with an internal development and retention focus being preferred, as qualified talent is both scarce and expensive. Asian leaders understand that they must build leaders faster than the global competition. Two things distinguish the approach of Asian companies: (1) attention to the specific developmental needs of the individual leader and (2) the speed with which they accelerate the development of key talent through experience, exposure, and custom training programs.

Customers and Consumers Care About Leadership

We live in an age where maintaining an organization's reputation and brand management is a constant challenge. Of the many ways corporate reputations are made and lost, few are more important than the quality of their leaders. Consumers are negatively influenced by headlines of errant and unethical behavior and positively influenced by lists of most-admired companies, especially those touted for their strong managerial practices. Consumers and customers have strong brand affiliations, product dependencies (e.g., prescriptions or replacement parts), and business affiliations that would be difficult to replace, and they take note of leadership behaviors. Knowing that raw materials are harvested in a sustainable way, that clothing is not manufactured by the use of child labor, that executives are not "tone deaf" to the average citizen, and that the stock market is still a fair and level playing field is important to consumers. In a world of choices, they will provide feedback by remaining loyal to a brand or by choosing a competitor for essentially the same product. They often share their thoughts and feelings among the members of their social networks with messages and postings that seem to never fade from the Internet.

Shareholders Care About Leadership

Those shareholders whose investment dollars and pension funds balance on the edge and are subject to mismanagement, lost revenue, and missed opportunity costs pay close attention. They are looking for superior returns and believe that those returns are the result of well-run companies led by ethical leaders. Analysts agree. There is mounting evidence of a direct correlation between effective leadership and business results. In their examination of CEO performance at publicly traded companies, researchers found that the "best- performing CEOs in the world" came from many countries and industries, and, on average, those CEOs delivered a total shareholder return of 997 percent (adjusted for exchange-rate effects) during their tenure. On average, these top 50 CEOs increased the wealth of their companies' shareholders by $48.2 billion (adjusted for inflation, dividends, share repurchases, and share issues). Compare that to the 50 CEOs at the bottom of the list who delivered a total shareholder return of -70 percent during their tenure and presided over a loss of $18.3 billion in shareholder value. Industry, country, and economic factors were accounted for, and each CEO's background and the situation he or she inherited were certainly factors in judging success. Many on the list of successes are familiar names; numerous others are relatively unknown but tend to be selected internally and have served longer in the role than the current average tenure of CEOs.

Internal Stakeholders Care

In an era of increased scrutiny of virtually all expenditures, accountability for the development of leaders, particularly at the top, will only increase. Significant resources continue to be devoted to developing leaders. The American Society for Training & Development (ASTD) estimates that, even in the midst of a global financial crisis, U.S. companies alone spent just under $126 billion per year on employee learning and development; slightly more than 10 percent of that expenditure was devoted to developing leaders and managers, and an additional 4 percent was expended on executive development. The inability to determine whether or not resources have been expended wisely cannot be sustained in most corporate environments, even when we intuitively believe that leadership development (along with all employee development) is a noble pursuit.

Current and Prospective Employees Care

Effective leaders create a culture that serves as a magnet for attracting top talent. With each generation entering the workplace, a greater emphasis is placed on continual development as these new employees know that they are unlikely to stay more than a few years; it's about what they can develop and acquire to take to the next stop in the career journey. We know that effective leaders are one of the most important influences on levels of engagement. Recent research reaffirms the correlation between engagement and the leaders' ability to:

• Develop a positive and significant relationship with each employee

• Provide constructive performance feedback often

• Coach employees

• Provide opportunities to grow and develop

• Set a clear direction—at whatever level is appropriate

• Communicate not only corporate strategy goals but also progress toward those goals

• Act in ways that are consistent with words

Higher rates of engagement translate into higher rates of retention, an important factor in retaining talent in an increasingly competitive job market. In a world in which fewer than one in three employees is engaged, trust in executives can have a significant impact on engagement.

Other Stakeholders Care

In an increasingly interconnected world, there are many stakeholders whose fortunes and fates are inextricably linked to successful leaders and the leadership development (LD) programs that create and support them:

• The families of employees who have offered their talents and energy in return for current compensation and, in many cases, future retirement and security

• Taxpayers called upon to "bail out" specific companies, as well as entire industries when economic stability hangs in the balance

• Industries that are enhanced by the reputation for good stewardship by outstanding executives or forever tarnished by the action of a few highly visible transgressors

• Communities that stand to be the beneficiaries of business profits that are poured back into the community in the form of goods and services purchased from local companies, as well as scholarships, endowments, and sponsorships

• National governments whose ability to gather tax revenue from profitable, well-run companies can mean the difference between national solvency and national bailouts

Current Status of Leadership Development

There is no doubt that leadership development is important, and it has changed dramatically in the past decade. Starting many years ago as typical classroom training on the principles of leadership, it has evolved into a critical part of organizational growth and development. How leaders are selected for programs and the specific ways in which programs are offered and structured are significant issues that define the current status.

How Leaders Are Selected for Development

Because leadership development can be one of the most expensive types of development (multiples of 4 or 5 times the expenditure made for other employees is not uncommon), selection is usually a thoughtful process.

At higher levels in the organization, participants in LD programs are often selected by one or a combination of the following methods:

• Nomination by a manager

• Cumulative data from performance management systems and/or past talent review discussions

• Assessment results

• Individual assessment (including a 360-degree instrument and/or psychological profiles) and custom developmental plans based on the outcomes of that assessment

• Participation in an "assessment center" exercise

• Testing (the test needs to be subjected to validity and reliability checks to determine the value of administration)

• Behavioral or structured interviews

At lower levels, participants are often "selected in" versus "screened out" and enter into an LD program by virtue of a promotion or a change in job title. For example, all new supervisors may be automatically enrolled in a particular program.

How Leaders Are Developed

Lewis Carroll, in Alice's Adventures in Wonderland, wrote: "If you don't know where you are going, any road will get you there." This is also true with leadership development. Unless there is a clear road map, it is indeed a lovely journey but one without a destination or committed travelers. The methods for development are varied, and many are combined into programs and initiatives of infinite variety:

• Formal training usually in a classroom (a virtual or "brick-and-mortar" one)

• Informal learning including self-guided or structured content (books, online learning, audio/video podcasts, etc.)

• Action learning (with a focus on strategic planning or innovation)

• Job shadowing

• Coaching (either internal or external)

• Mentoring

• Experiential learning

• Stretch assignments

• Simulations

• Community involvement

• "Community of practice" or network involvement

• Short-term rotational assignments

• Long-term international assignments

Years ago, researchers created assignmentology, a way of mapping standard leadership competencies to specific opportunities for development, such as serving on a taskforce, chairing a major initiative or assuming a role with a greatly expanded scope. The science of knowing what developmental experiences will result in specific competency improvements (and, by extension, what will not) is an extraordinary global positioning system in a world of increasingly fewer marked paths.


Excerpted from MEASURING LEADERSHIP DEVELOPMENT by Jack Phillips. Copyright © 2012 by Jack Phillips, Patricia Pulliam Phillips, and Rebecca Ray. Excerpted by permission of The McGraw-Hill Companies, Inc..
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents





Chapter 1: Leadership Development Has Never Been More Critical....................          

Chapter 2: Failure and Success of Leadership Development....................          

Chapter 3: Leadership Development and the ROI Methodology....................          

Chapter 4: Business Alignment and Preparation for Return on Investment Analysis....................          

Chapter 5: Data Collection Issues....................          

Chapter 6: Isolating the Effects of the Program: Tackling the Attribution Issue....................          

Chapter 7: Converting Data to Money....................          

Chapter 8: Leadership Development Costs and Return on Investment....................          

Chapter 9: Measuring Intangibles....................          

Chapter 10: Communicating and Using Evaluation Data....................          

Chapter 11: Taking a Sensible Approach to the ROI Methodology....................          

PART TWO: CASE STUDIES....................          

Chapter 12: Case Study: Return on Investment in Business Coaching....................          

Chapter 13: Case Study: Return on Investment in Leadership Development for Cross-Functional Managers..........          

Chapter 14: Case Study: Measuring Return on Investment in Leadership Development for Production Managers......          



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