Effective leadership development is crucial to building high-performing leadership teams that can drive growth and reach the targets of an ambitious value creation plan. However, assessing the impact of leadership development is often overlooked, leaving many businesses uncertain of its benefits and unable to pin down its ROI. So, it's important to establish appropriate measurement, accountability and evaluation practices that can track the progress of leaders-in-training, ensuring that programmes are relevant, effective and able to equip future leaders with the hard and soft skills needed for an ever-changing business landscape.
The key to understanding the success of any learning and development programme rests on the ability to identify the right candidates and the establishing of clear KPIs at the outset.
This article will explore the individual behavioural profiles required to succeed, the metrics necessary for understanding the impact of a training programme and the ways of measuring them.
A good framework for evaluating leadership development program success has been around since the 1950s, the Kirkpatrick Model. It requires evaluators to study four aspects of a programme.
This is simply measuring how students respond to the programme, across two measures: engagement and relevance. Are they actively involved in and contributing to the learning experience? Do they feel they will have the opportunity to use or apply what they learned on the job?
Measuring leaders' reactions to the programme alone will not tell us how effective the learning was, but engagement and relevance are a good primary indicator of success. As many L&D people will know, you can only get out what you put in.
In this aspect, we measure the before and after in terms of acquiring knowledge, skills, attitude and confidence.
Here we use pre-learning and post-learning assessments to identify accuracy and comprehension. These can be in the form of exams or conversations. Many leadership training programmes will have these measures in place.
In our experience, this is the most important aspect of leadership development. At Leadership Dynamics we study the behaviours that constitute the best leaders and, critically, the best team dynamics. We have found that behaviours are better predictors of how a leader will respond to a situation than personality traits. A personality profile offers a picture of a person’s mental or emotional state “at rest”, i.e. without context; but behaviours are dynamic, changing depending on the situation and therefore telling us how someone prefers to operate when faced with certain scenarios.
Assessing behaviour change during and after a training programme will show whether leaders are able to apply what they've learned in the job. It’s important to have a clear picture of an individual’s behaviours before starting the development programme to be able to make a comparison. Note that it takes time for behaviours to change, but with behavioural assessments using data-driven tools combined with regular interviews with the candidate’s direct managers, conducted over a period of time, programme managers can measure the efficacy of behavioural learning.
These data-driven tools can also give leaders an objective view of their own progress, which is one of the reasons why we created PACE, a behavioural profiling tool that benchmarks against data from some of the highest performing leadership teams in private capital backed businesses from the past 10 years.
Considered the most important aspect in terms of ROI. Is there a positive impact on business outcomes? Having clear KPIs set at the beginning of the programme is crucial to understanding the success of a programme. While it is never easy to draw a solid line between training and its results, it is possible to get a sense of its impact through correlation. While financial outcomes are high on the list, KPIs can also include studies of employee engagement, employee job satisfaction, customer retention, and operational efficiency.
People analytics employ a data-driven approach towards improving organisational and leadership performance. It involves the collection and analysis of employees’ qualitative and quantitative psychometric and performance data to gain insights into workforce behaviours, traits, and skills. By using people analytics, organisations can identify the specific learning outcomes they want their leadership development programmes to deliver and measure their effectiveness to make well-informed decisions.
Leadership analytics is a more specialised aspect of people analytics that focuses specifically on the leadership attributes and competencies within an organisation. These kinds of tools use data to pinpoint the most effective leadership behaviours and practices, find areas where improvement is needed and help identify those high-potential employees that are ideal candidates for development. It’s important to note that the requirements for different leadership teams will vary, so what looks good for one team may not work for another. Using analytics to segment by archetype will show which type of leader is suitable for a particular team dynamic and scenario, which also helps tailor a leadership development programme content.
By understanding the effectiveness of various leadership styles and behavioural profiles, organisations can better tailor their development programmes to more accurately gauge their results.
There are several approaches to measuring leadership development through leadership analytics, including:
Measuring leadership development through leadership analytics is crucial for organisations as it enables them to understand the effectiveness of their programmes and identify areas where improvements can be made. Companies can gain a comprehensive understanding of the impact of their leadership development initiatives and make better decisions regarding the future of these programmes.
Leadership Dynamics analytics tools allow leaders to understand their own behavioural profile, how they will work with other types of leaders on a team, and track their progress over time.
A screenshot of the Leadership Dynamics tool showing behavioural dynamics of an example leadership team. The most successful teams are balanced across the behaviours.
Leadership development focuses on improving a potential leader’s ability to guide, inspire, and empower others. It contributes to training in various leadership styles, each with specific traits and application contexts. Two important leadership styles are “adaptive leadership” and “delegative leadership”.
Adaptive leadership is a style in which the leader embraces continuous change and innovation to address complex situations. They focus on fostering learning, collaboration, and problem-solving within their team. Key characteristics of adaptive leaders include flexibility, creativity, and resilience. They are skilled at analysing problems, identifying adaptive challenges, and facilitating a solution-driven approach amongst team members.
Adaptive leaders are particularly effective in situations where:
Examples of adaptive leadership can be found in various industries, including technology, healthcare, and sustainability initiatives. Leaders such as Jeff Bezos have encouraged innovation and risk taking in order to evolve Amazon and secure its long-term sustainability. Ultimately, adaptive leaders prioritise long-term success and promote a culture of continuous learning and adaptability in their teams.
Delegative leadership, also known as laissez-faire leadership, provides the team minimal direction and allows members to make their own decisions. This hands-off approach can be highly effective when:
The importance of delegative leadership lies in its ability to give team members the freedom and autonomy to perform their tasks without constant oversight. This approach can improve efficiency, productivity, job satisfaction, and team morale, provided the workplace conditions support its implementation. Additionally, delegative leaders ensure that they maintain open communication channels to provide support and guidance when needed.
Both adaptive and delegative leadership styles play essential roles in leadership development. Understanding their characteristics and application contexts helps organisations build more effective and dynamic teams, fostering long-term company success and growth.
It's important to first determine the desired outcomes of any leadership development programme, which can be achieved by aligning the programme with the needs of the organisation, whether about driving performance or preparing for future challenges.
A key aspect of any leadership development programme is identifying the core leadership competencies and skills that need to be cultivated. These can range from hard skills like technical abilities, to softer skills such as decision-making, communication and collaboration. To create a comprehensive programme, build a structured curriculum that incorporates various L&D practices, such as lectures, workshops, simulations, job rotations, mentoring and coaching sessions.
Ensuring a successful programme relies on selecting the right participants. Evaluate potential leaders based on their current skills, potential for growth and development, and alignment with the organisation’s strategic objectives. Once the program participants are selected, facilitate regular assessments and feedback to monitor their progress and adjust the programme as needed.
Another crucial consideration when designing a leadership development programme is incorporating effective learning strategies. Some of these strategies include:
In private equity, developing effective leadership plays a crucial role in driving success for all stakeholders, both the funds and their portfolio companies. This involves not only identifying and nurturing top talent but also continuously measuring the impact of leadership development initiatives.
CEOs of private equity portfolio companies should be aware of the importance of assessing their leadership teams and identifying gaps in key positions. This process enables the CEOs to assemble an effective leadership team that can align with the portfolio company's objectives and achieve its value creation targets.
