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Get ROI on your leadership training

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In a tough economic climate, the training budget is often the first to feel the squeeze. 

Writing for Harvard Business Review, Ron Ashkenas and Robert Hausmann propose a more robust approach to leadership training – one centered on real-world business problems.

Companies certainly recognise the importance of management and leadership coaching, spending a global total of $24bn on it in 2013 alone.

But traditional leadership training focuses on hypothetical scenarios and it's hard to quantify the return on investment (ROI) of these methods.

When training revolves around actual cases rather than case studies, it puts managers outside their comfort zones, forcing them to reach for new approaches and drawing on newly acquired skills in real time to resolve genuine business challenges. 

THE TEST CASE: CARGILL

Global agricultural conglomerate Cargill has adopted this approach with some of their high-potential managers. Here’s how the scheme works:

1) Identify the problem. Participants choose a challenging problem from within their sector, meeting both internal and external stakeholders – futureā€seers, provocateurs, and stakeholders whose voices aren’t normally heard” – in order to broaden the way they think about challenges and potential solutions.

2) Set-up ‘safe to fail’ experiment. Next, trainees design a test for a possible resolution to the problem. This runs for 100 days or less and is a speedy way to assess the success or failure of the fix.

One project was a scheme to achieve operating efficiencies through modifying supply-chain management. Another trialled a new pricing scheme. The point is that, whatever the experiment, it’s not mission-critical, allowing the trial to fail without serious consequences.

As one participant noted: “By doing our experiment at one site instead of implementing at all 30 of them at once, it took the pressure off. We could see what the data said, and it was all right if it wasn’t perfect. Then we adjusted before moving on to other sites.”

3) Peer review. During the experiments trainees mentor each other, providing mutual feedback and clearly defined measures against which the success of failure of the project can be judged.

RESULTS

Among the 75 managers who took part in Cargill’s training scheme, there were some notable successes:

“One experiment generated a 2.6% reduction in work orders, which equated to $342,000 over the course of three months. Using the continuous process-improvement methods that were developed for the experiment, the manager is now working to reach a 30% reduction goal over a longer time frame.”

Cargill is by no means the only company to rethink its training strategy. Fusing management and leadership training with real business challenges not only accelerates learning, but it also speeds problem resolution and provides quantifiable results.

Credits:
Source Article: Leadership Development Should Focus On Experiments
Author(s): Ron Ashkenas and Robert Hausmann