LEADERSHIP DEVELOPMENT

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1 RESEARCH RESULTS CLIENT RESEARCH RESULTS BY: JAZMINE BOATMAN CONSULTANT, CABER REALIZATION RESULTS: Leaders found the training to be relevant and valuable to their jobs. Overall, the number of leaders with excellent leadership skills increased by 18 percentage points. After the training, leaders and observers realized a major improvement in employee communications. After the training, observers realized a major improvement in their own behaviors and thoughts. Estimates of human capital ROI indicate a 253 percent return and a benefit of about $3,473 per leader. LEADERSHIP DEVELOPMENT INDUSTRY Food and Business Services DDI PRODUCTS USED Interaction Management OPAL (Online Performance and Learning) BUSINESS NEED The food service industry has grown to be one of the more diversified industries, with few companies specializing in only one food group. Competition in the market is high. For companies to stay innovative and expand their reach, leader development has become increasingly paramount. This report focuses on a privately owned food service company, renowned for its hard work and integrity. This company has laid the foundation for its future growth by challenging its leaders to develop their skills and discover ways to contribute to and have more impact on the business. With constant mergers and acquisitions, food service providers must adapt to changing environments. This company recognized that to maintain its growth and stronghold in an industry where the cost of production is substantial, it was critical to commit to retaining, developing, and engaging its leaders. In essence, the organization saw the need to retain the right people while providing them with the right leadership skills for continued success. SOLUTION This food service company proactively sought to address the current challenges in its market in order to improve its future services and success. In 2005 the organization identified the need to find a reliable partner that could provide quality training, eventually choosing Development Dimensions International (DDI). DDI worked with this organization to form a leadership training program in response to its changing environment and needs. The program provided more than 2,000 leaders with an opportunity to develop their skills as well as resources that would have the most direct impact on group and individual performance. The leadership training was developed from DDI s Interaction Management, which is geared toward building the business skills that leaders need. Specifically, the DDI-trained, internally facilitated program included scenarios that resonated with managers. As part of the core curriculum, it included the following DDI courses: > Interaction Management Essentials > Supporting Leadership Development > Developing Others > Influential Leadership > Adaptive Leadership > Retaining Talent: Creating the Environment > Leading Change

2 RESEARCH RESULTS LEADERSHIP DEVELOPMENT RESEARCH DESIGN Thirty-nine leaders who participated in the development program and 118 of their supervisors, coworkers, and direct reports (a.k.a. observers) provided responses to a survey that included a variety of measures used to evaluate the program. The measures focused on the trained leaders ability to demonstrate skills from the core courses. Leaders and their observers provided ratings of behavior change and related outcome variables. Survey response rates were 61 percent for leaders and 72 percent for their observers. A majority of participants in the training program (i.e., 89 percent) were middle-level management. Most of the observers (i.e., 68 percent) were direct reports of the training participants. The majority of observers who participated in this study (i.e., 69 percent) have worked for the company for more than 10 years. Responses came from six different company offices around the United States. RESULTS Reactions Leaders found the training to be relevant and valuable to their jobs. Overall, reactions to the training program were quite positive. Almost all the leaders felt that the skills and concepts covered were valuable for their jobs. When asked to compare the training with all the leadership skills required for their jobs, respondents noted that the development program covered 73 percent of their total skill set. Additionally, all leaders Table 1: Reactions to the Training (Participant Ratings) Agreement* Item said they were motivated to apply their newly learned leadership skills after participating in the training (see Table 1). Behavior Change Overall, the number of leaders with excellent leadership skills increased by 18 percentage points. Both leaders and observers agreed that the trained leaders showed a marked improvement in skills after attending the training program. The leaders themselves reported a post-training skill improvement of approximately 20 percentage points. Observers reported similarly positive results, noting a 16-percentage-point average improvement. (See Figures 1 and 2.) Leaders and observers both reported the greatest posttraining improvement in the leadership skills addressed in the Interaction Management Essentials and Developing Others courses. For example, trained leaders reported a 32 percent increase in the number of leaders who frequently help others create developmental action plans, and observers noted a substantial increase (21 percent) in the number of leaders who frequently won others support for new ideas or strategies. Additionally, before the training the average participant rated his or her job performance, on a 100-point scale, as 83; after the training, that rating was 89 a 6-percentage point increase, with 54 percent of that improvement specifically resulting from the training. These results indicate a net improvement of 3.24 percentage points in leadership skills from this training initiative. 100% I am personally motivated to apply the skills or concepts learned in the training. 97% The skills and concepts addressed in the training are important for my job. 87% The skills and concepts taught in the training fit or align with my company s culture, values, and ways of interacting and doing business. * Percent either agreeing or strongly agreeing with the statement. 2

3 Figure 1: Change in Use of Leadership Skills (Participant Ratings) Before Training After Training Interaction Management Essentials Supporting Leader Development Developing Others Influential Leadership Adaptive Leadership Retaining Talent Leading Change Average Percentage Skill Improvement Reported After the Training: 20% Figure 2: Change in Use of Leadership Skills (Observer Ratings) RESEARCH RESULTS LEADERSHIP DEVELOPMENT Supporting Leader Development Interaction Management Essentials 70 Developing Others Average Percentage Skill Improvement Reported After the Training: 16% Influential Leadership Adaptive Leadership Retaining Talent Leading Change Before Training After Training 3

4 Leaders Comments Examples of Change > The training has given me more overall awareness. In general, I try to do a better job in listening and communicating with employees. > Training gave me synergy strength for team building and helping slow-responding members into Make things happen mode rather than Watch things happen mode. Observers Comments Examples of Change > This person has changed their (sic) way of listening to concerns and how they are addressed. This person has also improved with taking other people s feelings into consideration. > This person has helped more individuals to see his/her value to the organization. Work Environment After the training, leaders and observers realized a major improvement in employee communications. The training improved leaders skills, and their applying those skills had a positive effect on the work environment. Specifically, leaders and observers were asked to indicate the degree of improvement in a variety of work outcomes that could be attributed to the training intervention. Both groups noted improvements in the work environment, particularly in communication among employees (see Table 2). In fact, 75 percent of leaders experienced an improvement in their communication with employees, and 70 percent of them attributed their improved communication to their participation in the training program. After the training, observers realized a major improvement in their own behaviors and thoughts. Although they typically provide more conservative estimates of change in training participants, observers at this organization indicated higher initial ratings of performance, specifying that the trained leaders improvement also has had a direct impact on their own productivity (i.e., a 40-percentage point improvement in their own personal productivity six months after the program). More than half (i.e., 59 percent) of the observers claimed their own improvement was either moderately or largely influenced by behavior changes in the program participants. Furthermore, approximately half of the observers noted an increase in their own loyalty to stay with the organization after the leadership development training. RESEARCH RESULTS LEADERSHIP DEVELOPMENT Table 2: Ratings of Training Impact Percent of Leaders Indicating Improvement Percent of Observers Indicating Improvement Outcome 44% 55% Employee Productivity 50% 53% Efficiency of Operations 47% 31% Employee Morale 75% 52% Communication Among Employees 54% 48% Averages 4

5 RESEARCH RESULTS LEADERSHIP DEVELOPMENT Return on Investment (ROI) Estimates of human capital ROI indicate a 253 percent return and a benefit of about $3,473 per leader. Calculating a return on investment requires converting observed improvements into dollar values. Using this method, the gains observed from the training intervention (e.g., behavior change) are converted into monetary values and compared with the program s cost. Leaders who improve their behaviors in critical skill areas become more valuable to the organization (i.e., they are an improvement in human capital). To determine the value of an employee, the person s overall salary is taken into account that is, the employee should return to the organization a level of value in proportion to what he or she is paid. When employees improve their skills, then their value increases in proportion to their salaries. To calculate ROI for this program, the observers behavior change ratings were converted into dollar values based on salary. Then, program costs were subtracted from that amount to develop a percentage return on investment: > Total return (per participant based on behavior change and salary): $3,473 > Fully loaded costs (per participant): $982 This calculation yielded an ROI of 253 percent, or a $2.53 return for each dollar invested in the program. Important to note: These calculations describe a human capital ROI, meaning that the participating leaders have become more valuable assets for the organization and, thus, now have a greater capability to make stronger contributions. The organization can leverage this human capital improvement to help it achieve its strategic business goals. CONCLUSIONS The leadership development training program effectively addressed this organization s need to improve leader performance and skills associated with managing interactions with others. Training participants responded to the value of the training and improved their behaviors, while also making a positive impact on others who work with them. The strength of these changes is notable, given that leaders supervisors, coworkers, and direct reports observed them. In particular, supervisors who have observed these leaders noticed a significant increase in their helping others to see their own value to the organization and asking employees about their job satisfaction and intent to stay with the organization. In addition to personally developing its leaders, this food service company wanted to engage its employees and create a work environment that would promote consistent leadership and valuable experiences for all its employees. A work environment that is supportive of training and development is critical to the success of an organization s training initiatives. For instance, leaders who agreed that their organization had followed up on their training to ensure that their new skills were being applied on the job reported their job performance to be a 90 (on a 100-point scale), with 62 percent of this improvement as a result of the training. In contrast, leaders in less supportive environments have reported their post-training job performance as an 85 (on a 100-point scale). The forward-thinking vision of this organization allowed it to proactively address the need for leader development and then support its specific training initiatives. This high, positive ROI will translate into long-term business success as the organization continues 5

6 to build accountability and support for its leaders to apply these skills on the job. Important to note: The effect of leaders skill improvements is not a self-contained phenomenon. Strong leaders yield strong followers. Thus, the impact of such a training program is felt not only by the leaders, but also by their employees. The company s values of growth, hard work, integrity, and helping one another are evident in its desire to continually improve itself and its impact through its leaders. This focus on continuous improvement has helped to ensure that this organization will take its place among the leaders in the food service industry. CONTACT INFORMATION WORLD HEADQUARTERS INFO@DDIWORLD.COM This document was developed by DDI s Center for Applied Behavioral Research (CABER). For more information, contact CABER@ddiworld.com. RESEARCH RESULTS LEADERSHIP DEVELOPMENT 6 MKTIMRR