Evaluating the impact of Leadership Training and Development

If I wish to invest in a new product or service for my business, I want to understand the return I will get from my investment, and in its simplest form I can measure this in terms of ‘payback’, i.e. how long the investment takes to pay for itself. Making an investment in leadership development and training is not different and I have been asked many times how they can measure their return on investment or measure the impact it will have. After all, the “acid test” of any investment whether in leadership development or new product or service, is the results it produces. As any training and development professional will know, this is not an easy thing to measure, and often it is not a precise science. However, there are some guidelines I use that can help you to be clearer. In my view, the key to the evaluation of the impact of a leadership development programme is to be clear at the design stage what the business is expecting to achieve as a result of its investment. For example, is the programme supporting the business to:  Grow?  Increase sales or market share?  Increase profits?  Improve productivity and organisational effectiveness?  Reduce staff turnover? By setting out the outcomes expected form the leadership development programme different ‘levels’ of impact evaluation can subsequently be made. 1) Business – My view is that the highest level of evaluation can be assessed via the organisation’s own metrics (e.g. profitability, sales growth, market share etc). However, there needs to be a clear line of sight between these measures and others that link to them (see below). 2) Team. The first link from the business’ measures needs to be to the team or departmental measures. What impact will the programme need to have on team performance or departmental performance and their targets to deliver the business targets? These maybe for example, improved levels of customer satisfaction (which can increase sales), improved product margins through better negotiation (which can increase profitability), reduced absence rates and staff turnover (which can reduce costs). 3) Individual. The final link in the evaluation is individual performance and behaviour. How do leaders need to behave and what skills do they need in order to increase motivation and engagement to provide better customer service (for example)? This can be measured through achievement of personal objectives as well as observations on behaviour via 360 feedback appraisals. While I accept that assessing the business or organisational impact of an investment in training and development is never easy, it can be achieved by providing a ‘clear line of sight’ linking individual behaviour, through team behaviour and on to organisational/business outcomes, and in this way you can demonstrate the return on investment you have made.