Hard data behind soft skills: leadership development pays off
McKinsey Quarterly accuses U.S. companies of lavishing $14 billion per year on programs to nurture their leaders, but with little to show for it.
Criticism of leadership development programs often stems from the lack of hard data measuring how the programs affected leaders' behavior and the company's bottom line business metrics.
In fact, less than 8 percent of CEOs ever see the business impact of their leadership development programs or the ROI from their investment, according to a recent LinkedIn survey.
Development Dimensions International (DDI) released "PROOF," the world's largest and most comprehensive report on the effectiveness and ROI of a leadership development program.
Based on 42 years of data, 186 unique studies, and surveys of more than 18,000 participants, the study focuses on Interaction Management, a behavioral change program which is the longest-running and most widely-used program in the leadership development industry.
To date, IM has trained more than 10 million leaders worldwide.
Overall, the study showed that the organizations in which leaders employed IM reported ROI ranging from 147 percent to 633 percent. Most notably, critical business success metrics improved after leaders applied IM.
For example, individual companies found:
- Sales increased 114 percent
- Accidents decreased 60 percent
- Productivity increased 36 percent
- Grievances dropped 105 percent
- Work quality improved 48 percent
- Turnover dropped 77 percent
- Absenteeism dropped 90 percent
- Customer satisfaction increased 71 percent
Prior to undergoing IM training, only 52 percent of leaders with 1-2 years of experience in a leadership role rated themselves as effective leaders, while 60 percent of leaders with 10 or more years in the role thought they were effective.
After IM training, roughly 85 percent of leaders at all levels of experience rate themselves as effective.
Women feel more confident in their roles after leadership development programs. Among women leaders, 82 percent reported that they were more confident leaders as a result of participating in IM programs.
Among more than 300 leaders who participated in at least one IM course, 82 percent reported that they also used the skills they learned to improve their relationships at home and in their communities. ■