Is it Worth it? How to Achieve ROI of Leadership Training

I’ve been in the field of leadership development my entire 20-year career. And while the landscape of leadership learning has changed tremendously in that time (virtual, on-demand, simulations, gaming), the need to measure its impact has not.

I learned very early on that the most difficult part of my job was the moment a leader asked me to “show them the return”. They wanted to know will this program benefit the company. And if so, how? Usually, the first thing running through my head after this interaction was “do you not trust my judgment? Do you not trust my expertise? Why do you need proof? I’ve told you this is the right training – it will work!”

I’m not unlike many other L&D or HR professionals in the sense that measuring training programs can seem confusing, overwhelming, and even downright impossible at times. I mean let’s face it, we aren’t measuring how much shrink is being produced, or the percentage of call volume. We are talking about measuring trust in leadership or building managerial courage. These can seem like impossibly intangible things.

And yet, it doesn’t have to be rocket science. To successfully realize the value of leadership development and training organizations must expand their focus and consider both the Smart + Heart of measurement. ROI, the “smart” part of this equation is critical.

For instance, Jane went through the coaching workshop and is saving more than 4 hours a week because she is no longer in the “advice-giving” business. That’s 208 hours a year of additional capacity for Jane! Based on Jane’s salary, that time is equal to $7,000 annually. That is a significant result. So yes, ROI is one piece of the evaluation puzzle.

The other piece, in addition to ROI, is what we call the “heart” or for our purposes today, the ROE (Return on Expectations) This includes compelling stories and anecdotes when the numbers don’t explain the results as well as we’d like.

To take the previous example further “Retention has been an issue on Jane’s team in the past. In the months following the coaching workshop, retention has improved by nearly 33%. When her team was asked what they enjoy about their relationship with their manager, 75% mentioned the newly instituted coaching conversations and they feel their opinions matter and their job expectations are clearer.”

When faced with the challenges of measuring behavior change, ROE is a major idea being explored in today’s world of business. While ROI is still acknowledged as crucial, as Kirkpatrick says, “ROE is now being appreciated for what it is; a relevant, focused, big picture look at results”.

Understanding the ROE of L&D

ROE is not limited to just the monetary numbers. ROE encompasses much more. It can be measured in simpler terms and can even measure intangibles such as employee morale or loyalty.”

Is ROI a sound financial measure? Absolutely. Is it the ONLY measure? No. Consider this, what is the cost to our organizations/our teams when we focus so heavily on a pre-determined formula and exclude the big picture? It’s like implementing cost-cutting measures without considering the impact on employee productivity or customer experience. It’s a very narrow view that could be limiting your returns. In addition to ROI, the smarts of measurement, we need to be considering ROE, the heart of measurement.

Measurable ROI and ROE for leadership development rely on one foundational element: Having Skillful Conversations. Leadership development is not an “event”. It’s not a “one-day, two-day, three-day workshop” or “transaction between trainer and participant.”

We can’t go into training thinking “I’m going to deliver this event and then SUDDENLY everyone will change their behavior and we’ll be good.”  Instead, what if you approached training as a development initiative, a continuous conversation to discuss the who, what, where, when, and why of training with leaders, stakeholders, and participants, that begins before the event even takes place and continues long after the event is over?

How to Ensure ROI of Employee Training

Not all of us sit at the level of the strategic conversation. However, all of us play a part in helping our organizations realize better returns on leadership development initiatives. THAT is a conversation we can all add value to. So what can you do to ensure success? I’ll give you 4 tips.

1. Interrogate Reality

Reality is a moving target, which makes it especially challenging to identify clear expectations for leadership development and training. Not only are there differing perspectives of “what is important” based on what functional area you sit in, each person’s individual perspective isn’t necessarily shared by others, even if they are a part of the same conversation. So how can you set clear expectations for training in advance?

As a leader: Have the “What’s in it for me” conversation with your team members who are participating in the training program.

Research has shown us that for sustainable change to occur, insights must be generated from within. Developing a competency or skill just because someone else wants you to do it will never be enough motivation for the change to become lasting. Instead, the more personal the commitment to the learning goals, the more likely the success – If you want to make the learning “stick”, individual ownership is necessary.

As an organization: Before the training is even defined, have the conversations with stakeholders about what skills are required.

A McKinsey & Company report said, “Too many training initiatives we come across rest on the assumption that one size fits all and that the same group of skills or style of leadership is appropriate regardless of strategy, organizational culture or CEO mandate.”

Senior leaders must determine the specific leadership skills and behaviors needed to successfully execute the company’s strategy. Whether your organization is planning a merger, entering new global markets, ramping up sales operations, or creating a flatter corporate structure, it’s important to first think about what skills are needed to successfully execute the initiative.

2. Provoke Learning

As a leader: Provoke your own learning. As a, are you taking an active approach in the learning process, or are you hanging out on the sidelines? If you want to direct an orchestra, you have to learn at least the basics of every kind of instrument. You can’t tell the string musicians how to make a sound you want if you don’t have a firm understanding of how that instrument works. You won’t build trust that way, in fact, you’ll likely get booted off the stage by your own musicians. It’s the same in business. Are you willing to learn the same skills you are asking others to build?

As an organization: Ask yourself, have we created the optimal learning environment? In an inciting HBR article, “Why leadership training fails” when researchers looked at a corporate training program aimed at improving problem solving and communication between managers and subordinates, they discovered that success varied across the company. Improvements were greater in units that had already developed a “psychologically safe” climate in which subordinates felt free to speak up and practice new skills. 

3. Tackle Tough Challenges

As a leader: Focus on the doing rather than the learning.

So often, leaders will follow up on the learning experience with participants by asking “what did you learn?” Being asked the question “what have you learned?” is very difficult for even the individual to answer in an actionable/tangible way. I heard someone say the other day,

“If we consider that learning is a process that we go through to be able to do something new, different or better, shouldn’t we be focusing on measuring the ‘doing’ rather than the ‘learning’?” Brilliant! And YES!!

As a leader you can help support behavior change by actively participating in the doing vs passively asking about the learning. How do you do that? Give Feedback – even when it’s difficult to hear. Building a feedback-rich culture supports behavior change and improved performance.

As an organization: Steer clear of “flavor of the month training”. “Flavor of the month” is what happens when we just keep throwing new training solutions at our perceived skill gaps but nothing sticks – the behaviors never change. Instead of pausing and asking ourselves and the learners, what is happening? Have we missed the real need? What is getting in our way? We just keep finding new training solutions to throw at the problem. The result? There is none. It is the very definition of insanity, keep doing the same thing over and over again and expect different results.

To avoid the flavor of the month, keep the conversation open by asking questions. Explore this initiative from every angle – How often will you survey participants? How will you gather the data? What will success look like?

4. Enrich Relationships

Often forgotten or overlooked, this is where respect and engagement truly occur as a result of more authentic and transparent conversations.

As a leader:  Reinforce behavior– consistently. Consider this: how important has it been in your career to receive praise/positive feedback on your behavior? A recent Gallup poll found that 65% of US workers receive no praise at all in a given year. A similar survey of 4 million people found that people who received regular praise increased productivity and engagement.  Reinforcing behavior is an essential ingredient to high levels of performance and behavior change.

As an organization: Tie learning to the business and invite the conversation. When it comes to leadership development, it only makes sense that senior leaders and the department responsible for creating and executing training programs come together to determine what is the real skill that is needed for employees to succeed.

To do that successfully you must determine what the need of the business is first. And that requires conversation. Yet so often that conversation doesn’t take place. The lack of real, authentic conversation between L&D and senior leaders is having a direct impact on the value of L&D and the quality of the learning that is produced. I am certain this is not the result that the organization is looking for. If you know a conversation needs to take place, it is you who must invite it.

Bottom line? Skillful conversation is the only way to successfully measure the impact of training on the business and improve the learning culture in your organization. So invite the conversation, with your team, your learners, your leaders, your learning professionals. Consider the benefits when you do.