RESEARCH RESULTS IMPACT ANALYSIS

Transcription

1 RESEARCH RESULTS IMPACT ANALYSIS DDI S CENTER FOR APPLIED BEHAVIORAL RESEARCH (CABER) BETTER LEADERS, BETTER BUSINESS RESULTS THROUGH IM: EX With the fast-paced and exceedingly competitive nature of business today, organizations are holding everyone to higher standards. This means that leaders in all areas of business are being pressured to show results. Consequently, HR departments are not exempt from proving the value of their development programs, and at the end of the day, the bottom line is business results. According to DDI s Global Leadership Forecast studies (2009, 2011), which surveyed more than 12,000 leaders in thousands of organizations worldwide, developing talent remains a top priority. Organizations spend billions implementing development programs, in many cases without proof that their investments (in both time and money) are worthwhile. To obtain and retain the budgets for high-quality development programs, HR departments must be able to prove the value of their initiatives to stakeholders in the organization. DDI s Global Leadership Forecast (2011) found that 88 percent of organizations were more successful in delivering high-quality talent management initiatives when executives championed and proactively supported the programs, compared to only 19 percent that were successful without executive involvement. Furthermore, Bersin (2009) reported that although 8 in 10 organizations measure their employees satisfaction with leadership development programs, less than 1 in 10 measures the impact that leadership development has on the organization. The key to gaining executive support and funding for high-quality development programs is to show the impact of the programs on the business. What Is an Impact Analysis? DDI continually conducts research that measures how our solutions help organizations achieve their business objectives. These findings are summarized in Research Results documents, which are available on the DDI web site ( Periodically, DDI integrates these results to create a comprehensive view of the value and impact of specific solutions. We identify these integrative works as Research Results Impact Analysis. MKTIMRR36

2 TABLE OF CONTENTS 3 WHY MEASURE LEADERSHIP DEVELOPMENT? 6 FOCUS 7 PROCESS 12 INDIVIDUAL LEADER OUTCOMES 19 COLLECTIVE OUTCOMES 20 CONCLUSION 22 DEMOGRAPHICS 25 ABOUT CABER 25 ABOUT DDI 25 REFERENCES 2

3 WHY MEASURE LEADERSHIP DEVELOPMENT? HR practitioners might be reluctant to measure the impact of their leadership development programs for several reasons. Some organizations operate on the basis of faith when it comes to development they know they should be doing it, they know it works, and that s all they need to know. Others may not know what or how to measure, or they may fear poor results. However, aside from due diligence, taking the steps to determine if a program is actually providing positive results is critical to ensuring its value and longevity. Moreover, effective measurement not only demonstrates the value of leadership development programs, but also identifies opportunities to refine and improve the initiatives to increase results. The simple maxim is, You can t manage what you don t measure. Historically, metrics such as number of seats filled and course reactions are all that have been used to determine the success of leadership development efforts. While these measures focus on the initiative, they ignore the results whether knowledge and skills from the program are being applied on the job to improve performance. These are the types of results that matter to stakeholders. Moreover, according to a recent study conducted by the Human Capital Institute and Taleo (2012), less than 50 percent of organizations feel proficient in evaluating the success of their talent management initiatives. Measurement also serves as a competitive advantage. DDI s measurement approach, grounded in a simple model, is designed to demystify the evaluation of leadership development programs by covering four distinct measurement areas: focus, process, outcomes, and impact. DDI Measurement Areas 3

4 Measurement Model The first two measurement areas refer to the leadership development program or initiative itself. Focus metrics measure whether the program meets the most critical needs of leaders (e.g., job relevance, skill gaps), while Process metrics refer to the program s implementation (e.g., its execution, stakeholder reactions). Focus and Process metrics can be thought of as foundational measurement. Although they do not measure what happens as a result of the leadership development program, they provide evidence that the program will most likely result in positive outcomes. As with a manufacturing machine, it is important to determine whether the machine is operating correctly before measuring its output. The other two measurement areas refer to the results the organization expects from the program. Outcomes refer to changes in organizational talent (e.g., attitudes, behavior, performance), and Impact refers to changes in the business (e.g., financial results, business objectives, customer satisfaction and retention). More specifically: FOCUS How do you know the program is targeting the right skills? Unless you identify gaps in leaders capabilities, the likelihood of seeing improvements would be slim to none. Sample metrics: Needs analysis, identification of skill gaps, competency modeling, alignment with business drivers PROCESS How do you know the program is being implemented well, setting up leaders for success? It s important to measure the program s implementation to ensure the appropriate steps are taken to maximize results. Even the best-laid plans and programs will fail if organizational support is lacking or manager accountability is not embedded in the system. Sample metrics: Efficiency metrics (e.g., compliance, percent trained), participant reactions, organizational/manager support, accountability processes OUtCOmES How do you know the program has improved talent? Improvement in talent is the primary goal of any development program and the first indicator in determining a program s success. Talent outcomes, such as behavior changes and work group productivity improvements, are critical for demonstrating a program s impact on the business. Sample metrics: Knowledge gain, behavior change, changes in teamwork, productivity, engagement ImPACt Has your program affected the business? If you can show improvements in talent, you might be able to draw the line between talent outcomes and business impact. But without measuring along the way, you won t be able to make the business case. Like links in a chain, business metrics must be tied back to the development program to credibly show bottom-line impact. Sample metrics: Financial savings or gains, business objectives met, customer satisfaction and retention 4

5 About the Study The purpose of this study is to aggregate a set of research DDI has conducted since 2006 around the effectiveness of leadership development programs consisting of courses from DDI s Interaction Management : Exceptional Leaders... Extraordinary Results (IM: EX ) suite. The tool used to collect information for this research is DDI s Training Checkpoint SM, which evaluates leaders behaviors both before and after they ve attended a development program. Observers of the leaders (those in a position to witness the leaders on-the-job behaviors) were also surveyed. Each organization gathered data from at least 30 leaders who participated in a development program consisting of at least three IM: EX courses. In most cases, each leader was asked to send a survey to at least three observers, including his or her manager, direct reports, or coworkers. About the Sample This study focuses on 4,442 leaders from 50 organizations that evaluated their leadership development programs between 2006 and These organizations spanned all sizes across 14 different industries and 38 countries. Thirty-nine percent of the leaders were part of a multinational study in which data was collected from leaders in multiple countries. Across the sample of leaders, surveys were administered in five different languages. More notably, the leader sample included a mix of leaders from all levels. Study Sample Leader Level 37% Middle management 4% Senior management 10% Non-management 49% First-level management Also providing perspectives on the results of the leadership development efforts were 6,793 observers of the leaders primarily their managers, coworkers, and direct reports. The demographics section of this report provides additional details about both the leader and observer samples. Study Sample Observer Type 38% Direct report 24% Coworker 7% Other 31% Manager 5

6 FOCUS Gap in LEADERSHIP SKILLS Identified When it comes to leadership development, simply giving leaders what they want isn t enough. Instead, learning and development professionals need to make sure they give leaders the skills they actually need. Conducting some measurement to identify skill gaps is a critical prerequisite for designing an effective program. Training Checkpoint SM evaluated the leaders behaviors both before and after they attended development programs. Therefore, the average before rating provides a general indication of both strong and weak skill areas of leaders. For each course or topic in the organization s leadership development program, at least three behavioral indicators essential behaviors that would be expected to improve as a result of the course were specified. Leaders and observers were asked to rate the frequency (never or almost never, rarely, sometimes, often, or almost always) with which the leader exhibited each behavior both before and after the program. Because each behavioral indicator was considered a critical outcome, analyses focused on the percentage of leaders who displayed each behavior often or almost always. The following chart displays the frequency of the top two ratings (often or almost always) before development had occurred, providing an indication of leaders skill gaps. Frequency of Leadership Behaviors Before Development Building an Environment of Trust Adaptive Leadership 69% 71% 65% 80% Leading Change 54% 64% Leading High-Performance Teams 62% 61% Influential Leadership Essentials of Leadership Managing Performance Problems Coaching for Improvement Coaching for Success Setting Performance Expectations Reviewing Performance Progress 53% 51% 46% 50% 52% 53% 48% 54% 59% 55% 57% 57% 57% 64% Developing Others Achieving Your Leadership Potential Delegating for Results Resolving Conflict Retaining Talent 46% 44% 41% 49% 40% 44% 45% 48% 39% 45% Leaders/Self Observers 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent Who Rated Program Participants as Displaying Behaviors Often or Almost Always Before Development 6

7 Opportunities to Improve Leadership Skills Before their development, approximately half (55 percent) of leaders reported frequently engaging in effective leadership behaviors across all courses. More specifically, at the top of the list, both leaders and observers indicated that before attending the programs, leaders were most effective at building an environment of trust and being adaptive, although there was still room for improvement. The areas identified as the opportunities for greatest improvement were retaining talent, resolving conflict, and delegating for results, with less than half of leaders frequently engaging in effective behaviors related to these topics. These results indicated there was much room for improvement and a significant need for the leadership skills addressed in DDI s IM: EX courses. Gap in LEADERSHIP SKILLS Identified PROCESS Effective LEADERSHIP DEVELOPMENT PROGRAM Implemented When measuring the effectiveness of any development program, it s important to remember that the hows (i.e., the implementation and environment) matter just as much as the whats (i.e., the content). Even the most innovative, engaging, and targeted content will result in little or no behavior change if it s delivered ineffectively or if there is no support for leaders to use their new skills on the job. DDI s Training Checkpoint SM includes measures of the development process (e.g., opportunity to apply skills, manager and organizational support) that can serve to either facilitate or inhibit the transfer of new knowledge and skills from the program to the job (training transfer). Additionally, these measures identify opportunities for organizations to refine and improve their development programs to increase impact on the business. Following are the results of the process measures from the aggregated sample of leaders. 7

8 Factors That Support Training Transfer The skills and concepts addressed in the program are important for my job. The skills and concepts taught in the program fit or align with my organization s culture. I am personally motivated to apply the skills or concepts learned in the program. Since participating in the program, I have had opportunities to apply new skills on the job. The purpose, importance, and benefits of leadership development at this organization are clearly communicated. My manager has the knowledge and tools to support my development. I know how to incorporate what I learned in the program on the job. The program has increased my confidence in applying the skills or concepts on the job. My developmental assignments are sufficiently challenging to be good learning experiences. My manager is committed to my development. The leadership skills I am developing are aligned with leadership competencies important for my organization. I am held accountable for applying the newly trained skills and concepts on the job. I have all the resources (information, equipment) I need to apply what I've learned from the program on the job. I have the support of others when I utilize my new skills. 84% 79% 77% 76% 75% 74% 70% 69% 67% 67% 64% 61% 57% 56% I have enough time to devote to my development as a leader. 49% My manager and I have agreed to a specific written plan for my overall development. There is an environment of continuous learning in this organization. 36% 33% 0% 20% 40% 60% 80% 100% Percent of Leaders Who Agree or Strongly Agree There is good news and bad news in these results. The good news is that leaders deemed their leadership development programs to be highly relevant for success in their jobs and aligned with their organizations cultures. Also, a majority of leaders reported having opportunities to apply their new skills back on the job (76 percent) and being personally motivated to apply new knowledge and skills (77 percent). The bad news is that although leaders reported their managers have the skills and are committed to helping them develop, accountability for on-the-job application is low. Less than two out of three leaders reported being held accountable for applying the skills from the programs, and only about one out of three leaders reported working with their manager to identify and agree on a specific action plan for using new knowledge and skills on the job. Additional barriers to training transfer involved a lack of resources (only 57 percent reported having sufficient resources to apply what they have learned on the job), a lack of time to devote to development (only 49 percent reported having enough time for development), and a general lack of organizational support for continuous learning (only 33 percent reported an environment of continuous learning in their organization). For organizations to ensure sustainability of their programs, retain budgets, and impact the bottom line, they need to ensure that their leaders are supported in applying new skills. Otherwise, the initiative and related efforts are wasted. 8

9 How the Leadership Development Process Affects Results Understanding how leadership development programs are being executed and supported within an organization is essential for determining the likelihood of results and also useful for identifying opportunities to increase results. Across the more than 4,400 leaders in 50 organizations included in this study, the extent of behavior change on the job (i.e., the outcome of training transfer) was found to be particularly influenced by four key process elements. Results It s not surprising that relevance of program content is critical to realizing on-the-job behavior change, with behavior change being defined as the percent increase in effective leadership behaviors frequently displayed after attending the program compared to before attending. In essence, if leaders feel that the skills they gain in their development programs are important for their jobs, the more likely they are to display positive behavior change (leadership effectiveness). According to the data, those who didn t agree that the skills and concepts in the program were important for their jobs reported only a 31 percent overall improvement in effective leadership behaviors. In contrast, leaders who agreed that the skills they learned were important for job success reported more than twice the improvement (66 percent) of those who disagreed. 9

10 100% Relevance of Skills Affects Behavior Change % Behavior Change 90% 80% 70% 60% 50% 40% 30% % 10% 0% Disagree Neither Agree nor Disagree Agree The skills and concepts addressed in the program are important for my job. When the program covers relevant skills that can be assimilated quickly into the job, leaders are more motivated to internalize and apply the new skills. Leader motivation is essential to application and, therefore, program success. Leaders who reported being personally motivated to apply their new skills ended up doing so. In fact, those who were motivated displayed more than twice as much behavior change as those who were not motivated. Motivation to Apply Skills Affects Behavior Change % Behavior Change 100% 90% 80% 70% 60% 50% 40% 30% % 10% 0% Disagree Neither Agree nor Disagree Agree I am personally motivated to apply the skills or concepts learned in the program. Even highly motivated leaders can t apply new skills if they aren t given opportunities to do so. In addition to relevance and motivation, opportunities to apply skills make a significant difference in how much change actually occurs on the job. According to the data, the more opportunities a newly trained leader had for practicing his or her skills, the more improvements were reported. Leaders need multiple opportunities to practice and perfect their new skills before they are internalized and made routine. 10

11 Opportunities to Apply Skills Affect Behavior Change % Behavior Change 100% 90% 80% 70% 60% 50% 40% 30% % 10% 0% Disagree Neither Agree nor Disagree Agree Since participating in the program, I have had opportunities to apply new skills on the job. Even though the program is relevant, leaders are motivated, and there are opportunities to apply new skills, many organizations still struggle with implementing processes to hold leaders accountable for practicing and applying their new knowledge and skills. Leaders at all levels are busy employees and challenged to juggle a myriad of responsibilities. Those who are not held accountable for practicing and applying what they learned in their development programs are more likely to revert to their previous approaches and leadership styles rather than practice and internalize new, more effective skills and approaches. The best way to ensure accountability is to involve the managers of program participants in creating specific action plans and ensuring accountability to follow through on those plans. According to the results of this study, when this occurred, training transfer increased by 22 percent from 54 percent behavior change to 66 percent. Accountability Affects Behavior Change % Behavior Change 100% 90% 80% 70% 60% 50% 40% 30% % 10% 0% Disagree Neither Agree nor Disagree Agree My manager and I have an action plan for how I will apply my new skills on the job. 11

12 Often with development programs, extensive effort is put into the content (the whats ), but not enough attention is paid to the implementation and support (the hows ). This study demonstrates that focusing on (and measuring) the process is vital for reaping the eventual rewards. There are three important implications for organizations based on these results: 1. Collecting data to ensure that the right skills are addressed in the program (see Focus measurement) is essential for improving leadership abilities. Communicating the relevance and applicability of the skills covered in the program is useful for ensuring that leaders are thinking of ways to apply them immediately on the job (ensuring relevance). 2. Ensuring that leaders are motivated and have the confidence to apply new skills is critical to seeing the desired changes back on the job. Leaders also need to be given multiple opportunities to practice and perfect new concepts and skills on the job. 3. To see changes in behavior, managers need to hold leaders accountable for applying the new or enhanced skills. Creating and agreeing to a specific application plan not only holds leaders accountable, but also ensures program relevance and identifies specific practice opportunities. The adage remains correct: What gets measured gets done. Gap in LEADERSHIP SKILLS Identified Effective LEADERSHIP DEVELOPMENT PROGRAM Implemented IMPROVED LEADERSHIP SKILLS INDIVIDUAL LEADER OUTCOMES The most common, and often most important, question asked of leadership development programs is, Did they work? In other words, Did we develop our leaders, and have their skills improved? A major focus of the Training Checkpoint SM tool and this study was to examine the amount of behavior change participants achieved after completing IM: EX development programs. Leaders and their observers were asked to rate how often leaders exhibited effective behaviors both before and after the program. The majority of organizations in this study surveyed their leaders and observers approximately three to six months after formal development (i.e., training courses). Because each of the behavioral indicators selected was considered a critical outcome of the program, results focused on the percentage of leaders who displayed each often or almost always before and after the program. 12

13 Overall, results indicated that before leaders attended their development programs, they and their observers agreed that only about half of leaders were effective that is, both leaders and observers reported that only 55 percent of leaders frequently (often or almost always) displayed effective leadership behaviors before attending their programs. The fact that the pre-program leader and observer ratings were an identical 55 percent is a testament to the reliability of these ratings. After attending the DDI development programs, leaders selfratings rose to 86 percent and observers ratings to 75 percent. These increases demonstrate that leadership development is clearly making a difference and increasing the application of effective leadership behaviors, to the extent that even others are able to notice significant improvements. The bottom line: IM: EX improves leadership abilities. Behavior Change as a Result of Leadership Development Leader ratings Observer ratings After 75 After 86 90% 100% 80% Before 70% 60% 50% 40% 30% 20% 10% 0% LOW AVERAGE HIGH Percent Often or Almost Always Leaders Self-Ratings of Behavior Change This study took a closer look at behavior change tied to specific IM: EX courses from the perspectives of both leaders and observers. Leaders self-ratings were the primary focus, demonstrating their efforts to apply new knowledge and skills from the development programs on the job. The following chart displays the before and after ratings that leaders made for each course. Across the board, regardless of initial skill levels, leaders reported substantial improvements in the frequency with which they displayed effective leadership behaviors. 13

14 Self-Ratings of Behavior Change by Course Building an Environment of Trust Leading Change Adaptive Leadership Essentials of Leadership Coaching for Improvement Leading High-Performance Teams Managing Performance Problems Coaching for Success Influential Leadership Setting Performance Expectations Developing Others Reviewing Performance Progress Delegating for Results Resolving Conflict Retaining Talent Achieving Your Leadership Potential 80% 95% 64% 91% 71% 90% 57% 89% 53% 85% 62% 85% 57% 84% 52% 84% 59% 83% 48% 82% 46% 82% 46% 79% 41% 78% 40% 74% 39% 69% 45% Pre-program 67% Post-program 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent Who Rated Themselves as Displaying Behaviors Often or Almost Always Leaders Improved Most Where They Needed It Most According to leaders, the most highly rated IM: EX course, both before and after the programs, was Building an Environment of Trust. In this course leaders learned how to avoid trust breakers and create an environment in which people take risks and work together to create and sustain high levels of trust. Although leaders were effective at building an environment of trust before attending the course, they were able to improve to an even more impressive level of effectiveness. The high before ratings indicated that there was less room for improvement compared to other courses. In contrast, several of the courses in which leaders believed they improved the most after attending the development programs were the ones that had the most room to improve. The course with the most improvement was Delegating for Results (a 90 percent overall increase between the before and after ratings), followed by Resolving Conflict (an 85 percent overall increase), and Developing Others (a 78 percent overall increase). Although, the course Achieving Your Leadership Potential was not rated as having the most room for improvement before leaders attended development programs, it was rated as having the most room for improvement post-program. However, leaders still experienced a 49 percent overall increase in skills related to this course as a result of the program. 14

15 Tenure Matters: Newer Leaders Have Much to Learn This study also demonstrates that the extent of behavior change after development programs is related to the length of time a leader has been in his or her position. Results indicated the longer a leader has been in his or her position before attending a leadership development program, the less behavior change is reported. Leaders in their position for less than a year reported the most behavior change a 73 percent improvement in their effective leadership behaviors. Leaders who had been in their positions for more than 10 years reported less change (a 56 percent improvement), a relatively smaller but still significant improvement. This indicates that the earlier in their tenure leaders experience a development program, the more of an impact it will make in how they lead others for years to come. However, seasoned leaders can always learn more. Leader Tenure Affects Behavior Change % Behavior Change 100% 90% 80% 70% 60% 50% 40% 30% % 10% 0% Less than 1 year 1 2 years 3 5 years 6 10 years More than 10 years Length of Time in Postion 15

16 Level Matters, But It Is Never Too Late to Brush Up on the Basics Self-ratings of behavior change also varied depending on the level of the leader. In fact, lower-level leaders showed more improvement than those at higher levels. This is because lower-level leaders had more room for improvement compared to higher-level leaders. Non-management reported an 81 percent improvement in their skills, first-level management reported a 62 percent improvement, middle management reported a 43 percent improvement, and senior management reported a 33 percent improvement (see figure below). These results demonstrate that even higher-level leaders have room for improvement and can develop their basic skills further with the right kind of development. Higher-level leaders might improve even further with content more tailored to their roles, such as the offerings available in DDI s Business Impact Leadership courses, which focus more on strategic leadership. Behavior Change Ratings by Leader Level Percent Who Rated Themselves as Displaying Effective Behaviors Often or Almost Always 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Non-management First-level management Middle management Senior management Pre-program Post-program Leader Level Observers Ratings of Behavior Change To confirm and support leaders self-ratings of improvement, Training Checkpoint SM and this study also gathered observers reports of improvements. Observer ratings, measuring visible perceptions of changes in behaviors, parallel the ratings of the leaders. Both leaders and their observers reported that leaders were most proficient in building an environment of trust and adaptive leadership, both pre- and post-development. Additionally, both groups suggested relatively more room for improvement in the areas of retaining talent and resolving conflict, both before and after program attendance. The chart on page 17 displays the before-and-after ratings of observers for each of DDI s IM: EX courses. 16

17 Observers Ratings of Behavior Change by Course Building an Environment of Trust Adaptive Leadership Managing Performance Problems Achieving Your Leadership Potential Essentials of Leadership Influential Leadership Leading High-Performance Teams Coaching for Success Setting Performance Expectations Delegating for Results Coaching for Improvement Developing Others Leading Change Reviewing Performance Progress Resolving Conflict Retaining Talent 69% 84% 65% 81% 64% 80% 48% 78% 57% 77% 55% 76% 61% 76% 53% 74% 54% 74% 49% 74% 51% 72% 44% 72% 54% 71% 50% 71% 44% 66% 45% Pre-program 63% Post-program 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent Who Rated Leaders as Displaying Behaviors Often or Almost Always Although leaders reported the most substantial improvements in Delegating for Results and Resolving Conflict (90 and 85 percent respectively), observers reported the most substantial improvements in Achieving Your Leadership Potential, a course in which leaders learned to link their development to personal strengths and weaknesses to their organization s goals, and Developing Others (63 and 64 percent respectively). Although leaders and observers ratings by course were similar, some of the courses had notable differences in ratings between the two groups. Compared to observers, leaders rated themselves more highly in Leading Change and Coaching for Improvement and lower in Achieving Your Leadership Potential. These discrepancies illustrate how observers valuable and unique perspective may vary from that of the leaders. Although leaders might take actions to promote changes that observers are unable to witness, observers may notice improvements in leaders that the leaders cannot see in themselves. 17

18 Perspective Matters: Direct Reports Get a Front-Row Seat Observers in this study were a mix of the program participants managers, direct reports, and colleagues. Their ratings varied depending on their relationship to the leader, but the percent improvement they reported was similar. Managers gave the lowest ratings but reported more improvement (22 percentage points). Direct reports gave the highest ratings but reported the smallest improvement (18 percentage points). Coworkers were in the middle, with a reported 19 percentage-point improvement in leaders behaviors after the program (see figure below). Behavior Change Ratings by Observer Type Percent Displaying Behaviors Often or Almost Always Direct report ratings Coworker ratings Manager ratings This difference in perspectives might result from the fact that many of the critical leadership skills covered in the development programs focused on leaders interactions with their direct reports (e.g., coaching for success, delegating for results). Therefore, it is likely that managers and coworkers were overly conservative when rating the frequency of desirable leadership behaviors because they were unable to observe as many leadership-related interactions as direct reports. 18

19 COLLECTIVE OUTCOMES Gap in LEADERSHIP SKILLS Identified Effective Leadership Development Affects More LEADERSHIP IMPROVED IMPROVED DEVELOPMENT LEADERSHIP TEAMS Than Just Leaders PROGRAM SKILLS Implemented A leadership development program typically is put in place with the hope that improved leadership abilities will create a ripple effect of positive results on others in the organization namely, direct reports. To test this hypothesis, leaders were asked to rate the percent of improvement, if any, they observed in their work groups that could be attributed specifically to the development program. The greatest improvements leaders reported were in the satisfaction of their work groups and communication among employees (a 47 and 46 percent improvement attributed specifically to the leadership development programs). Work Group Outcomes of Leadership Development Employee Satisfaction Communication Among Employees Employee Morale 42% 47% 46% 0% 20% 40% 60% 80% Percent of Improvement Due to Leadership Development Influencing Work Group Performance: The Pathway to Business Impact Leaders also were asked about work group improvements that more directly impacted the business, including quality of work, employee productivity, and efficiency of operations. Leaders reported the most substantial increases in the quality of employee work (an average improvement of 44 percent). Because the positive effects of a leader s development are expected to extend to his or her team and the broader workforce, the possibility of linking leadership development efforts to actual business results becomes much more plausible. Work Group Performance Results Quality of Employee Work 44% Customer Satisfaction 42% Employee Productivity 38% Efficiency of Operations 37% 0% 20% 40% 60% 80% Percent of Improvement Due to Leadership Development 19

20 CONCLUSION Only a minority of organizations today measure the impact of their leadership development programs, but those that do have been rewarded by realizing the value of their efforts, securing their place at the budget table, and identifying opportunities to increase their programs impact. Consider the path that s been illustrated throughout this study, linking leadership development programs to talent and business results. Although the training resulted in improvements across all course topics, leaders made the biggest strides in areas that were identified as the greatest opportunities for improvement before they attended the program. When programs are implemented successfully i.e., leaders understand the relevance and are motivated to apply new concepts and skills, there are opportunities to apply new skills, and leaders are held accountable for applying their new skills results are even more apparent through increases in effective leadership behaviors. As expected, more effective leadership behaviors lead to work group improvements that are directly linked to the bottom line for the business, such as productivity and efficiency. What does the path of your leadership development program look like? Are you measuring the foundation to ensure that your initiatives are targeting critical needs and are implemented to ensure results? What types of results do you expect from your development programs, and can you link them to business impact? How a Leadership Development Initiative Leads to Results This impact study has demonstrated the value of DDI s leadership development offerings and how the skills covered in its suite of IM: EX courses contribute to the bottom line for the business. Before participating in development programs, only about half of leaders exhibited effective leadership behaviors; afterward, approximately 85 percent of leaders frequently demonstrated these behaviors. Furthermore, post-development improvements in employee satisfaction, communication, engagement, productivity, and efficiency were attributed specifically to the development programs. These results demonstrate that leadership development makes a real difference in leaders performance, which then has positive implications for those with whom they work. Such improvements can have a positive impact on the business and the organization s bottom line (the specifics of business impact tend to vary greatly from organization to organization and, therefore, were not presented in this study). 20

21 DDI s seven years of research and survey data from more than 4,400 leaders and 6,700 observers continue to demonstrate the payoff of leadership development, but DDI also acknowledges that there s always room for improvement. Following are recommendations to improve leadership development programs in your organization: Do more measurement. With less than 10 percent of organizations measuring the impact of leadership development (ASTD, 2007), more could take a cue from the organizations in this study and conduct more thorough measurement. Measurement can serve not only as evidence of a working talent initiative, but also as a diagnostic tool for further maximizing results. Develop leaders earlier. Leaders in their positions for less than a year showed the most behavior change a 73 percent improvement in effective leadership behaviors after attending the program. Developing leaders early is important for maximizing talent. Ensure content is relevant and leaders are motivated to apply new skills. Leaders are more motivated to change the behaviors that they recognize as important for their daily work. This study demonstrates that relevance and confidence have a significant impact on results. Ensure leaders have opportunities to apply new skills. The results showed that when leaders have opportunities for practicing their new skills, the extent of improvement is amplified. Leaders need opportunities to practice and perfect new and more effective concepts and skills before they become internalized and routine. Managers shoulder a responsibility to make sure these opportunities exist. Ensure accountability. In this extensive sample, only 61 percent of leaders reported being held accountable for applying the learned skills from their programs on the job, while only 36 percent reported working with their manager to create a specific action plan identifying opportunities to apply new knowledge and skills. Finding ways to increase process tension and accountability for a development program goes a long way toward further maximizing the positive impact of leadership development efforts. Create an environment conducive to development. Less than half of leaders in this study felt that there was enough time allowed on the job for development, while only one in three leaders reported an environment of continuous learning in their organization. Ensuring an organizational culture exists that not only supports but also maximizes development will guarantee that leaders are continually improving and providing value to the business. Taking these steps to create and sustain a successful leadership development program is more critical than ever for organizational survival. During a time when more is expected with less, isn t it time to discover the benefits of leadership development in your organization? 21

22 DEMOGRAPHICS ABOUT THE SAMPLE* Leaders 4,442 Observers 6,793 OBSERVER RELATIONSHIP TO LEADER Number Percent Manager 1, % Coworker 1, % Direct report 2, % Other % LEADER LEVEL Leaders Observers Number Percent Number Percent Non-management % 1, % First-level management 1, % 1, % Middle management 1, % 1, % Senior management % % TENURE IN ORGANIzATION Leaders Observers Number Percent Number Percent Less than 1 year % % 1 2 years % % 3 5 years % % 6 10 years % 1, % More than 10 years 1, % 2, % TENURE IN CURRENT POSITION Leaders Observers Number Percent Number Percent Less than 1 year % % 1 2 years % 1, % 3 5 years 1, % 1, % 6 10 years % % More than 10 years % % * Total numbers of participants in some sections do not add up to the total number of leaders and observers in the entire sample because not all survey participants provided an answer to every question. 22

23 INDUSTRy Leaders Observers Number Percent Number Percent Aerospace and Defense % % Automobile Manufacturing and Sales % % Banking and Insurance % % Biotechnology % 0 0.0% Business Services % % Computers and Software % % Energy and Utilities % 1, % Engineering and Construction % % Food Services and Manufacturing % 1, % Health Care % % Industrial Manufacturing % % Manufacturing of Goods/Products % % Mining % % Transportation and Logistics % % BREADTH Of STUDy Leaders Observers Number Percent Number Percent Local 2, % 3, % Multinational 1, % 2, % COUNTRy Leaders Observers Number Percent Number Percent Africa % 0 0.0% Argentina % 0 0.0% Australia % % Bahrain 3 0.1% 0 0.0% Belgium % % Brazil % 0 0.0% Canada % % Chile % 5 0.1% Czech Republic 9 0.2% % Denmark 1 0.0% 0 0.0% Dubai % % El Salvador % 0 0.0% Germany % 8 0.2% Hong Kong 4 0.1% 0 0.0% 23

24 COUNTRy (CONT D) Leaders Observers Number Percent Number Percent Iberia % % Iran % % Italy % % Jordan 7 0.2% % Kuwait 4 0.1% 5 0.1% Lebanon 9 0.2% % Morocco % 0 0.0% Oman 9 0.2% 6 0.1% Outre Mer % 0 0.0% Palestine 4 0.1% 4 0.1% Peru % 0 0.0% Poland 4 0.1% 2 0.0% Qatar 5 0.1% % South Africa % 0 0.0% Spain 0 0.0% 1 0.0% Sweden 1 0.0% 0 0.0% Switzerland % 3 0.1% Syria % % Thailand % % The Netherlands 6 0.1% 1 0.0% Turkey 6 0.1% 9 0.2% United Kingdom % % United States of America 2, % 3, % Yemen 1 0.0% 1 0.0% year Of STUDy Leaders Observers Number Percent Number Percent % % % % % 1, % % % % % % 1, % % % 24

25 ABOUT CABER DDI s Center for Applied Behavioral Research conducts, coordinates, and champions research on leadership and human talent in the workplace. CABER helps fulfill DDI s philosophy that talent management practices should be evidence-based. CABER advocates a comprehensive measurement approach to evaluate the effectiveness of talent management solutions. We help organizations optimize use of their own metrics and can supplement their measures with tools of our own. ABOUT DDI In today s complex marketplace, having the right talent strategy is crucial for an organization s success. Development Dimensions International will help you systematically and creatively close the gap between the talent you have and the talent you need to drive business strategies. DDI excels in: Competency models that are linked directly to your business. Screening and assessment, enabling you to hire the right people with a full range of validated tests and assessments. Behavior-based interviewing, helping hiring managers and recruiters make accurate hiring decisions. Performance management to foster individual accountability and superior execution of your strategic priorities. Succession management expertise and assessment systems to help you make critical placement and promotion decisions. Accelerated development to give you people who are more productive faster by offering the widest range of topics for workforce to senior leadership levels. DDI is all about giving you the kind of business impact you want over the long term what we call realization. The work we do together is tied to your organization s strategies and becomes part of your business and your culture. If your business is multinational, DDI has precisely the kind of global resources needed to implement your talent initiatives effectively and consistently worldwide. For a closer look, visit 25 REFERENCES American Society for Training & Development (ASTD). (2007). State of the industry report. Alexandria, VA. Bersin & Associates. (2009, April). The state of learning and talent measurement. Available to research members at or for purchase at Boatman, J., & Wellins, R.S. (2011). Global leadership forecast 2011: Time for a leadership revolution. Pittsburgh, PA: Development Dimensions International. Howard, A., & Wellins, R.S. (2009). Global leadership forecast : Overcoming the shortfalls in developing leaders. Pittsburgh, PA: Development Dimensions International. Human Capital Institute. (2012, March). The business impact of talent intelligence. White River Junction, VT: Human Capital Institute and Taleo.

26