By Jack J. Phillips, PhD and Patti P. Phillips, PhD
Recently, a large gold mining company based in North America with mines in three continents faced a challenge. Survey data taken from all employees indicated the first level of management needed leadership skills. The engagement survey results were much lower than expected and pointed to a need for formal leadership development. The chief operating officer (COO) agreed and approved a project that involved 14 days of leadership development, coupled with 360 degree feedback processes, and a team of individuals to make this successful. In all, almost 1,000 managers would be trained at a cost of over $6 million. The COO was willing to make this investment if the human resources function would show the financial ROI of the program, adding, “How can I spend this amount of money and not show my shareholders the return on this investment?” This presented a challenge to the HR executives who had never pursued an ROI study on any of their previous projects. This story highlights three developing trends.
- Globally, a record amount is being invested in leadership development—an amount
greater than at any previous time in history. Several benchmarking reports confirm this.
- A record amount of requests for accountability for leadership development are being
requested, including showing impact and ROI for major programs.
- Human Resource professionals, particularly those involved in the soft skill area, must be
prepared to step up to this challenge, not only when impact and ROI are requested, but
ideally, before the request is made. Hundreds, if not thousands, of HR functions around
the world are now doing just that by developing the skills to be a certified ROI
This case study, as with many other case studies, has a happy ending. The results of this study are included in the recently published book, Measuring the Success of Leadership Development: A Step-by-Step Guide for Measuring Impact and Calculating ROI, ATD Press, 2015.