A CALCULATED IMPACT
How to measure the ROI of leadership development.
By Dori Meinert
Cultivating new leaders is a top challenge facing executives worldwide. In fact, only 41 percent of 1,000 C-suite leaders surveyed recently believe that
their organizations’ leadership development programs are
of high or very high quality.
Despite the billions of dollars that companies pour into
these eforts each year, most organizations still do a poor
job of measuring the efect of their leadership development initiatives, the DDI Global Leadership Forecast 2018
found. Only 18 percent are gathering relevant business
impact metrics, which may be why some experts have
questioned the worth of these programs in recent years.
“We spend a lot on it. People want to know: What’s the
real value?” says Patti Phillips, president and CEO of ROI
Institute Inc., based in Chelsea, Ala., and co-author of
Measuring the Success of Leadership Development (
Association for Talent Development, 2015).
Having the data ready when the chief fnancial ofcer
asks you to prove the program’s worth may help you avoid
cuts or bolster your request for an increase in funding. It
will also build your reputation as a strategic thinker who is
looking out for the long-range health of the business. Even
more important, conducting an analysis will enable you to
identify where improvement is needed so the initiative can
be more efective next time, Phillips and other experts say.
Here are some tips to help you measure the business
impact of your program and avoid some common missteps.
Align your eforts to business needs. A common
mistake is investing in a program before establishing what
problem it would solve or what opportunity it would help
“People think that investing in leadership development
is inherently a good thing. While there may be some truth
to that … the frst question to address is why,” Phillips says.
“What are the business opportunities? What’s the opportu-
nity for the organization to make money, save money, avoid
cost or do some greater good? What are the behaviors that
need to change in order to solve the problems and leverage
Only after answering those questions should you decide
what type of program to provide. “Many times, organiza-
tions identify solutions frst and hope change occurs. That’s
the opposite of what they should be doing,” Phillips says.
Consult with others. Be as specifc as possible when
defning the measures that refect business needs and the
changes in behaviors that must occur to address those
needs. “This requires we engage others in the conversation,” such as the people analytics team, Phillips says.
Find out what your leaders need. Too often, programs
are chosen without any knowledge of leaders’ current skills
or knowledge—or even how they learn best.
“Rather than offering Leadership 101, identify the
skills gaps that are going to give organizations the
most bang for their buck,” says Darlene DeRosa, man-