Investing in Your Leaders as a Strategic Asset: A Fresh Look at Measuring the Impact of Leadership Development | Heidrick & Struggles

This article discusses the growing trend of organizations investing in leadership development despite implementing cost-cutting measures in other areas. The authors emphasize the necessity for companies to understand the return on their investment in leadership development and present five key success factors for an evidence-based approach to measuring its impact: 1) Embedding Measurement Throughout the Learning Journey, 2) Defining Success in Tangible Terms, 3) Diagnosing Baseline Data, 4) Developing a Data-Informed Learning Experience, and 5) Determining Early Indicators and Adapting Incrementally. Regarding point #2 (defining success in tangible terms), the focus is on aligning business stakeholders and the L&D team on metrics that will signify the journey’s success. Questions aimed at driving this alignment include: What business problem(s) are we trying to address? How can learning assist? What business outcome(s) are we seeking to achieve? Which business key performance indicators (KPIs) should we target? When can we expect to see significant movement in these KPIs? The table on p.4 illustrates a practical example of how these questions might be answered using three business imperatives. While isolating the impact of leadership development on organizational outcomes is difficult to do, these five steps can take organizations one step closer to demonstrating the ways in which leadership development enables business performance.