How to measure the ROI of leadership development
The formula for successful leadership development
Did you ever sign up for a leadership course that was postponed all the time? Did you ever do a leadership course where you weren’t able to apply the things you’ve learned into practice? Or did you ever have the feeling that your personal development wasn’t important enough to spend time on it? I had. But even though companies are spending a huge amount of money on training and development, the return on investment is very low. What can you and your organization do to prioritize successful leadership development?
Return on investment
A poor return on investment in personal development doesn’t relate automatically to poor training programs. It has a lot to do with the culture of the company and with the way how the training was communicated. What is the value of a training if you don’t know why you are signed up? How important is the training for you if your manager gives you the feeling that the training is just a company requirement? That it is good for the statistics, but actually takes too much time?
How to make leadership development successful?
Leadership development is more than just following a course. Learning more about leadership theories is interesting, but at the end of the day, the theory is not of much value. Research has shown that leaders learn about leading from leading. Real learning happens when leaders are able to practice and apply what they’ve learned.
The formula to lasting and effective leadership development
So far, we’ve talked about culture and personal development. These are two out of three elements of the formula that is key to lasting and effective leadership and organization development. The formula mentions B = P x C. The B stands for behavior, P for personal development and C for culture. So personal development on its own, would never result in improved leadership behavior. Same for the company’s culture. If the culture is totally focused on a learning mindset, but the leader doesn’t take the time for personal development, the leadership behavior won’t improve. So, we need both personal development and the organization’s culture, for sustained and soaring performance.
Behavior driven development
The outcome of the formula has to do with behavior. And what we’ve seen is this driven by the personal development and the organization’s culture. But can you improve your leadership behavior also via other ways? Is there a shortcut for improving your leadership behavior? The term behavior driven development is a software process where you first determine the desired behavior before you start programming.
Shortcut formula for leadership development
We use the same process of behavior driven development in ludodidactics, a learning method that focuses on the desired behavior. A training program based on this method helps the individual leader to develop his or her leadership behavior by using elements of game design. If we translate this in a formula, it would result in A = M + D. In this case M represents the mechanics, D the dynamics and A the aesthetics also known as the desired behavior. The mechanics are the tools that are causing the desired behavior. The dynamics are representing the behavior that occurs when the player interacts with the mechanics. When a player understands the mechanics, the game is no longer of value as the player does understand the game – so how to come to the desired behavior – completely.
Examples of successful leadership development
So how can you as a leader or as an organization increase your return on investment in leadership development? We’ve discussed two scenarios. The first one is to improve leadership behavior by investing in personal development and the organization’s culture. The second one is the shortcut. In this case behavior driven development is key. One way or the other, they both come back to the desired leadership behavior. Which one works for you?