The Great ROI Swindle

perspectives Mar 24, 2017

How measurement impacts Leadership Development


Leadership development can have a significant positive impact on the individual and the organisation, including its culture. Therefore, it makes perfectly good sense to measure the outcomes from a leadership development initiative, to understand how effective the initiative has been.

As we peer beneath the surface of this statement, establishing effective measurement gets a lot more complex. To measure the effectiveness of leadership development, we also need to consider:

  • What is meant by leadership development in your organisation?
  • What is leadership development in service of? The individual, the organisation or society as a whole?
  • Over what time period should effectiveness be measured?
  • Leadership development will be one of several factors that will lead to effective business outcomes; how do you explicitly identify the contribution from leadership development, as distinct from the other factors?
  • How does organisational culture influence the outcomes of leadership development? How can we allow for this in the way we measure?

Challenges in measuring include:

  • Effective leadership differs according to who is being asked (e.g. manager, peers, subordinates, or bosses); hence, effectiveness may be in the eye of the beholder (or evaluator).
  • Individual differences influence how effective the development will be. There is a need to consider how individual characteristics of leaders impact measurement indicators. For example IQ, EQ, character, personality, perspectives and life experiences.

To develop an effective measurement, aligned to your organisation’s strategy and cultural maturity, requires an adaptive approach. The following are core principles in developing an effective measurement process:

measure money performance and growth


Be wary of any “silver bullets” offered on measurement
While there are many methodologies such as the Kirkpatrick evaluation model, there are significant traps to consider when measuring learning.

In today’s world effective leadership development transcends a linear focus on leadership “skills” (horizontal development) and encompasses development of leadership mindsets (vertical development). The combination of horizontal and vertical leadership development can create substantial uplift in return on learning, yet this learning is also more complex to measure.

How do you measure the impact of enhanced capacity to think broadly and deeply? How do you measure impacts over time and at multiple levels of the organisation?

Recent academic research has a promising line of measurement – capturing the impact of ‘assimilation challenges’, for example how did leaders struggle with, reflect on, and master the new concepts they learnt.

Culture impacts development and development impacts culture
The culture of an organisation, including how it prioritises (or not) development can have a significant impact on the success of leadership development initiatives.

On the flip side, effective leadership development interventions can significantly influence culture as individual and collective behaviours and mindsets shift. For example, a leadership development initiative in a large financial services organisation produced far greater team and functional unit collaboration. This ultimately led to a more constructive culture.

True learning occurs over time and multiple experiences
Developmental learning requires numerous catalysts before a leap is made. Therefore, measurement needs to be over a considerable period of time. As leaders are encouraged to become more adaptive and to change the ways they look at leadership and the world, they may need to go through times of resistance and disorientation as a part of the leadership development journey.

An 18-month Leadership development initiative for an ASX200 executive team paid the biggest benefit 2 years later when the global financial crisis hit and the team had to collectively make some very difficult decisions. Team members shared that they would not have been able to make these decisions if they hadn’t done the leadership work.

How you measure development affects how people evaluate their experiences – it can also be part of the learning journey
We have found gathering participant stories through longitudinal interviews can be a powerful developmental experience as well as provide measurement criteria. For example, we interviewed a project manager who shared with us his decision to stop a particular process. This saved $500k in expenditure and was the direct result of his learnings from a leadership programme. As he shared the story with us, he also realised how he could scale this learning to other projects and project managers.

A series of follow up interviews helped a group of leaders to identify where they needed to refocus their efforts. They devised a strategy and actions to more widely influence the culture and further the personal learning they had achieved. This resulted in the ideas being embraced and applied more broadly in the organisation.

Consider your current organisation, its business strategy and its culture. What kind of measurement will best suit your organisation’s needs and generate the most valuable data on ROI?

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