Leadership and ROI

| By TMA World


Once in a while, I come across a paper or article that perfectly resonates with my experience.  That happened recently when I read “Why Leadership Training Fails – and What to Do About it” by Michael Beer, Magnus Finnström, and Derek Schrader (Harvard Business Review, October 2016).  US employee training and education in 2015 in US cost companies close to $160 billion; globally the figure was nearer to $356 billion. 

That is a lot of money, and it’s problematic how well those investments translate into increased organisational performance.  The problem?  The desired changes in workforce knowledge, skills, and mindsets are focused on individual change and development, and often changes are short-lived.  It ignores the power of the organisational context in which the desired changes are to be applied.  The most effective pathway for implementing change is to target development of the organisation first, followed by context-appropriate training for individuals.

Currently, executives look at the corporate strategy, identify individual competencies at different organisational levels to execute the strategy, and then design and deliver training to build competencies.  That assumes performance deficiencies reside in individuals, but how many of you have returned from a great training program only to find the organizational context – senior management mindsets and behaviors, a poor communication, poor coordination across the company, and inappropriate policies and procedures – actually work against what you have learned and been told to apply.

One of my most frustrating moments is when a client asks “What kind of ROI on this training program can we expect?”  It’s a perfectly reasonable question in many ways, but it is based on the assumption that the training initiative stands alone.  I would sometimes cause bafflement by asking “What changes in the organisation are also being implemented to support the desired changes?” As the authors say, “If the system does not change, it will not support and sustain individual behavior change – indeed, it will set people up to fail.”

The authors recommend the following steps:

• The senior team defines values and an inspiring strategic direction.
• Candid feedback from managers and employees is gathered and analyzed on the barriers to strategy execution and learning.
• Organisational roles, responsibilities, and relationships are redesigned to overcome the barriers and motivate change.
• Day-to-day coaching and process consultation are introduced to help people become more effective in the new design.
• The organisation adds training where it is needed.
• Performance is assessed using appropriate individual and organisational metrics.
• Systems for selecting, evaluating, developing and promoting talent are adjusted to support new organizational behaviors.

Another suggestion that might appear to be counter-intuitive, is to avoid rolling out company-wide initiatives.  It is much more important to take a unit-by-unit approach.  Different units are likely to be at different stages in their development and require distinctive roles, responsibilities, and relationships, and different capabilities to function in them.


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