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Demystifying Measurement & Leadership Training ROI

A common misconception about ROI is that it needs to be framed in a dollar amount. This may be the case with specific types of investments, but when it comes to behavioral training, what you're measuring can vary.

If, for example, you know that your employees are experiencing some degree of disengagement, this could potentially be impacting your monetary bottom line — but since it's difficult to know for sure if it's causing a direct monetary impact, what you'd likely measure is the level of employee engagement pre- and post-training. In this case, any increases in revenue as the result of training will have resulted in identifying and naming the problem (i.e., disengagement) rather than jumping immediately to the conversation of monetary return.

Another thing to consider is that although what you're measuring may be tied to a behavioral factor, this factor could directly tie to saving money—for example, if you experience an increase in employee retention, this will directly impact what otherwise high turnover rates would cost you.

To illustrate what I mean, here's an example of how ROI was calculated with one of our clients:

A manager of a global manufacturing company said she saved more than four hours a week by applying the Fierce Coaching Program, which shows participants how to get out of the "advice-giving mode." That means she saved 208 hours a year!

Let's assume this manager earns $70,000 a year, or about $33.65 an hour (40 hours a week, 52 weeks = 2,080 hours; $70,000 ÷ 2,080 = $33.65). 

She regained time equal to $6,999 (208 hours x $33.65 per hour) annually.

If 100 managers in this global manufacturing company earning an average of $70,000 learned the Fierce Coaching Program and experienced similar results, the company would regain time equal to $699,900 – and that is time not only saved but spent on tasks the managers were more ardent about.

The behavioral improvement in Coaching conversations led to saving time, and therefore money. 

Planning Ahead for Measurement

What Fierce can help to measure is readiness and ability of participants to apply the concepts learned in training

If you really want to measure the short and long-term impact of training, you'll need, as a business, to determine what exactly you want to measure and customize your measurement tools (such as your surveys) to these specific goals.

There are typically four primary areas that will need to be considered when it comes to measuring ROI. Fierce can partner with you and provide support during all four areas of this strategic process:

1. Evaluation Planning – You'll need a solid grasp of what you want to measure (which KPIs, soft or hard data) and you'll need to determine the timeline of delivering those KPIs, as well as which ones will be most impactful for your Fierce pilot.

2. Data Collection – You'll need a method and an action plan for gathering this data, such as through customer surveys. This includes pre- and post-survey, as well as plans for sustainability.

3. Data Analysis – Determine a practical, feasible model that makes sense for measuring the data you've collected.

4. Developing ROI – How does the data illustrate results? How did these results impact KPIs? Is there a relationship between the surface results and monetary value?

When it comes to evaluation planning, here are some important questions to consider:

-     What are your core KPIs? What are you really wanting to measure? 

-     Who are your pilot groups?

-     Are you using a pre-existing form of measurement or do you need to create something new?

-     What is the timeline of measurement (determine before training begins)?

A common challenge is understanding how to measure human behavior and the impact it is having on the business. Although it isn't always straightforward, the truth is that it can be done. Often businesses give up measuring because even though they might be able to show a correlation between something like engagement scores from one year to the next, it's not always clear the cause of the change.

This is why the questions above are so helpful.

Now, let's see how we might apply this strategic approach in our solving for a common pain point reported by many businesses – the amount of time lost by leaders in their decision-making process. Using our Team Program as an example let's walk through how we could measure the impact of this training on the business.

First, we create the baseline. If we wanted to measure the decision making ability of our manager population we would break down decision making process into three parts: time to make the decision, quality of the decision, and effectiveness of the decision. With a simple survey on a scale of 1-5 you could ask your leaders to self-assess how they feel their leadership group is at decision making, and where their own skill level is at.

Once you have your baseline, you can identify which part of the process is most problematic. Fierce Team training solves for all three areas and so we would want to look at the scores for all three components of the process.

Second, we would create pilot groups. By controlling how the training is received, let's say all managers receive the team training, you can show that the training is a common significant experience and that the score changes of that specific group was directly impacted by the training.

Last is define the timeline and make sure the post-survey check-ins are consistent. At Fierce, we recommend looking at the impact eight weeks post-training, six months post-training, and then a year post-training.

While measurement needs to begin prior to training, sustainability measures will play a role in maximizing ROI. Read my other recent blog post here on how to best reinforce training within your organization.

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