An organization is only as good as the people it employs. In order to grow, innovate, and compete, companies in all industries have to ensure that their people have the ability to address the challenges and opportunities that come with change and growth.

Even for organizations that place a high priority on leadership development, it can sometimes be difficult to tie L&D spends to improved business outcomes. Although not every dollar spent can be directly tied to the top and bottom lines, we do know that an increased focus on leadership development drives better business results:

According to a study conducted by the Center for Creative Leadership, 65% of companies with mature succession management programs were able to improve business results by leveraging leadership skills, compared to 6% of companies without. Also, 86% of companies with leadership development programs are able to respond effectively to changes in their business environment, compared with 52% of companies that lacked such programs.

That said, many L&D spends can be directly attributed to improved business performance, if the program is designed and executed correctly. Some examples of such KPI’s include:

Participant self-reporting

One of the most important things you can do to determine the success of any leadership development activity is to ask the participants themselves. Measuring success from their perspectives will include things like job satisfaction, and intent to stay with your organization. Measuring where the leadership development program had impact, whether they felt that impact was significant, and their impression of ROI is key.

Manager reporting

Feedback from the people that are supervising your program participants is another important source of data that can help determine the efficacy of your program. Managers will be able to provide information on how participants’ behavior has changed, whether they have made progress on their goals, and if they are more effective in their role.

Organizational KPI’s

For organizations that have put a substantial number of employees through a leadership development program, they will be able to draw a number of comparisons between program participants and employees who aren’t a part of such programs. This includes things like job satisfaction, retention, promotions, and job performance.

Additionally, organizations should measure and record the effects of their leadership development programs on talent pipelines – role vacancy time should be reduced, internal promotions should happen more often, and there should be more employees identified as high potentials.

Measuring & Managing Program Impact

The success of leadership development programs can be measured across many variables, and from the perspectives of participants, their coworkers, and the organization as a whole.

By creating a strong reporting framework that encompasses all of these elements, learning & development professionals make it easier for themselves to deliver measurable results and advocate for increased L&D budgets. Additionally, it makes your work much more fulfilling, since you can actually see the impact of the programs you create!


Free Guide – How to Design a Leadership Development Program

Aside from increasing agility and staying competitive, there are many other reasons that organizations should invest in leadership development. For a full explanation, as well as examples of what these programs look like, download our free guide, How to Design a Leadership Development Program.
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