How to Build a Business Case and Measure the Effects of Leadership Development Programs

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How to Build a Business Case and Measure the Effects of Leadership

Development Programs

Speaker: Jeffrey BerkCOOKnowledgeAdvisors

Moderator: Deanna HartleySenior EditorChief Learning Officer magazine

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Deanna HartleySenior EditorChief Learning Officer magazine



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Jeffrey BerkCOOKnowledgeAdvisors



How to Build a Business Case and Measure Effectiveness for Leadership Programs

Jeffrey BerkChief Operating Officer

www.knowledgeadvisors.com

© KnowledgeAdvisors. All rights reserved

Agenda

8

Developing the business case for a leadership development initiativeDefining the leadership development measurement strategy to evaluate impactIdentifying what analytics are important Communicating the results of leadership development investments to executives


Who is KnowledgeAdvisors?

Our software, Metrics that Matter®, helps organizations measure and improve their talent development programs.We also have experts on staff to design specific solutions for our clients.

We are a Learning Analytics company.

9 10/31/2012 © 2012 Copyright KnowledgeAdvisors

What is Metrics that Matter®?Metrics that Matter® is the leading learning analytics system.

It combines a world-class evaluation system with powerful analytic tools to provide comprehensive reporting.It is the only system that fully automates the entire Level One through Five evaluation process.

10 10/31/2012 © 2012 Copyright KnowledgeAdvisors

Leadership Development Need

11 © KnowledgeAdvisors. All rights reserved

Strategic, visible and costly program

Leadership Development Programs are critical to:create a high performing workforcedevelop future leadersbuild succession plans

Need for formal measurement to yield better and timelyinformation for decision-making

Need to validate leadershipprogram investment and identify improvement areas

Types of Metrics to Report


Balanced Metrics/Better Decisions


Outcome Metrics - Business Outcomes •Leader Retention•Employee Engagement•Employee Retention•Leader Performance Ratings•Leader Financial ManagementEffectiveness Metrics – Program Performance•Delivery Quality•Knowledge Gain•Application to Job•Business Alignment•ValueEfficiency Metrics – Cost and Activity•# of Participants•% of Employees Trained•Total L&D Investment•L&D Investment per Participant•Courses Utilized•Classes Conducted•Instructors Utilized•Locations Used

Business Case Components

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1. Increased performance– Improved performance in running training like a business– Improved workforce performance through data driven decision-making– Research shows 2.4% improvement in performance from analytics

2. Reduced scrap learning – Over half of training investments are not optimally used– Most organizations waste .5% to 2% of revenue on under-used training– Lack of manager follow-through is a significant problem

3. Reduced administration – Majority of time spent on measurement is transactional and tactical– Talented practitioners are doing data compilation vs. data analysis– Data is not provided with any relevant reference points to make sense


Business Case Examples

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1. Performance Case: European Government Entity leadership program saw more than double (69%) on-the-job performance change vs. benchmark and showed a 2 to 1 benefit-to-cost ratio from leadership program. Finally 87% saw improved customer retention vs. 37% for benchmark.

2. Scrap Case: Consumer goods firm used on-the-job reinforcement tools to engage managers and employees after a strategic program. Nearly 70% used the program with reinforcement vs. less than 33% without reinforcement.

3. Admin Case:15 minutes to retrieve actionable data for decision-making vs. 15 hours prior to automating the measurement process. This automation of 1 report alone saved over $36,000 per year.


A Tale of Two Programs


1.Company A went back 2 years… and identified that they had 1,019 people rated #3, “needs improvement” in recent performance reviews

2.They calculated that they spent an average of$13,090 per year on highly visible leadership development (Coaching, counseling, mentoring, retraining and manager time) to elevate them to #1’s ,“high performers”

3.They identified 2 years later… the number that were currently ranked as #1’s, was ZERO

A Tale of Two Programs


Leadership program with optional ‘project’Determine if optional project influenced employee retention in leadership programEmployees with no learning projects averaged a turnover rate of 21%Employees with 2 or more learning projects averaged a turnover rate of 2%Clearly the control group vs. learning group shows a difference

Furthering the Case

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Create a 1 page business case (simple and concise). Emphasize productivity, waste and admin.

Put an executive report or dashboard together that has at least 1 metric for outcome, effectiveness and efficiency data.

Do a pilot of analytics. Evaluate your training in an analytics tool, compare to benchmarks, view results in reports, dashboards and scorecards.


1 Page Business Case


Value Summary

$2,500,000 Performance Gain

$250,000 Waste or Scrap Avoided

$116,250 Administration Savings

$2,866,250 Total Quantified Value

Dashboard/Executive Reports


The Top 10 Measurement Tools


1. Identify Key Performance Indicators2. Create Smart Sheet Evaluations3. Build Communication Plan4. Design the Dashboard5. Provide Executive Reports, Scorecards, and Statements6. Conduct Capability Assessment7. Perform a Test/Certification8. Gather Sponsor Satisfaction Data9. Deploy On-the-Job Reinforcement10.Conduct Business Impact Exercise

Leadership Metric Sustainability

22

Processes

Standards, Tools

Technology

Data Utilization

• Established and consistent processes, technologies and communications for measurement

• Broad base of skills in analytics and measurement and strong capabilities in end-to-end measurement methods

• Standardization for a consistent and single point of analytics with integration to and from feeder systems

• Roles and accountabilities for metrics are defined with consistent expectations on what should be measured.

• Strong desire to use the data for decision making

• Maturity in how data is reported and used to improve end to end talent processes

• Strong leadership for driving measurement with governance to support it.

• Standards have been created for data collection• Data integrity exists

• Culture supports and drives need for standards and common talent development processes and measurement

3

5

8

1

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Contact Us

23

For further information contact:

Jeffrey BerkChief Operating Officer+1 312 [email protected]


mailto:[email protected]

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Questions & Answers

Jeffrey BerkCOOKnowledgeAdvisors

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How to Build a Business Case and Measure the Effects of Leadership Development Programs

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