No subject is more critical, written about, or discussed than leadership and leadership development. According to a study by Harvard University ⇗, 15,000 leadership books are in print, with thousands of articles written about the subject each year. Most executives support leadership development and proclaim that great leaders are needed and that leadership development should drive business results. Yet, there are some challenges to ensuring leadership development delivers value. We will cover various examples of leadership challenges, such as managing finances, tracking ROI, facing competition, defining value, overcoming fear, handling time, dealing with complexity, and much more.
This blog will be guided by leadership development experts – Dr. Patti Phillips and Dr. Jack Phillips. They will provide insights into the five main challenges leadership development organizations and providers encounter.
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Proving the Value of Leadership Development: Case Studies of Top Leadership Development Programs
Examples of leadership challenges within organizations
Organizations face challenging, competitive environments and must be more effective and efficient. The challenge for leadership development providers is ensuring those services meet these realities.
Here are five examples of leadership challenges within organizations:
1. Budgets are tight, and obtaining approval is going to be more difficult. Some organizations are suffering because of the changes brought on by the global pandemic. Governments, nonprofits, and educational systems will be in dire need of deficits and excessive debts. It will be challenging to obtain the budgets for the type of services offered, putting more pressure on professionals to show the value of those services with credible, unmistakable data.
2. A “show me the money” mentality has evolved. In many organizations, when requests are made for certain expenditures, there is a tendency to ask for the value the program delivers. “Show me the money” has been a common expression by senior leaders as they are asked for more budget. There is pressure on service providers to ensure they can show the monetary value and compare it to the cost – the Return on Investment (ROI). Learn more about ROI methodology here.
3. In some cases, ROI forecasting might be the only way to approve a project budget. This would require forecasting the impact in advance and comparing it to the cost to see the ROI generated with the project. It removes uncertainty and ensures the project adds value to the organization.
4. In a competitive environment, there is a need to stand out from others. This involves showing the value delivered when others do not, or at least not in credible ways.
5. There is a need to validate the value proposition. Services have been sold on the promise that they would bring value to the organization. There is a need to validate that proposition to show the client the value that was delivered in terms that executives understand and appreciate.
Why is Leadership Development Important Today?
Leadership Development is Needed Now
While organizations have always needed leaders who recognize emerging challenges and drive organizational results, the need is intensifying today as leaders confront market uncertainty, digitization, the power of data as a competitive weapon, and the challenges of motivating a diverse, remote workplace to enhance business performance. These shifts create a need for most organizations to change, which demands more and better leadership development. The result is a record amount of investment in leadership development—more than $200 billion globally.
Business Connection is Missing
Unfortunately, there is overwhelming evidence that various programs, books, articles, seminars, and conferences deliver disappointing results. Based on a Fortune survey, a mere 7 percent of CEOs believe their companies are building influential leaders, and only 10 percent said their initiatives for leadership development have a clear business impact. McKinsey’s latest research has a similar message: only 11 percent of more than 500 executives polled around the globe strongly agreed with the statement that their leadership development interventions achieve and sustain the desired results (McKinsey & Company ⇗).
Lack of Alignment
Leadership development providers are uniquely positioned to align the leadership development to the business. However, many providers fail to connect their programs to the business.
Examples of leadership challenges for providers
Providers often encounter their own obstacles when attempting to connect their programs to the business.
Here are five examples of leadership challenges that providers face:
1. Fear of the outcome. There is a concern that leadership development may not drive enough business results to cover the cost, and if the ROI is calculated, it will be negative. This concern stops many evaluations. Leadership development providers are concerned that the lack of business results and a negative ROI will reflect on their performance, and the contract will be discontinued. The reality is that the content and delivery are OK: The support for the application is missing.
The challenge is to tackle this issue proactively, not waiting for the client to ask for the business value but pursuing an evaluation strategy to show the program’s value. If the program’s provider pursues the initiative, it creates a better situation. You’re in control of the process. It’s on your agenda rather than an executive’s agenda because you have more time to get it right, and you can make a case for making changes if it needs to deliver appropriate value. If you wait for the request, you are now on an executive’s agenda, have a shorter time frame to deliver results, and are now on the defensive. If the results are disappointing or negative, it could easily result in discontinuing the program.
2. No one is asking for this; this is the second-most common hurdle. In a busy workplace, with deadlines and changing priorities, pushing an evaluation to impact, and maybe ROI, only rises to the top of the agenda if requested. After all, there is a chance that it never will be required. However, it could be disastrous later if you don’t tackle it early.
3. It takes too much time, which is often more of a myth. If you build evaluation into the program and share the responsibilities, it doesn’t take that much extra effort.
4. It is too complex. Apart from the time, there is a concern that the process may involve more statistics, finance, and accounting than most people want to deal with. There are visions of long formulas, statistical concepts, and heavy financial analysis. It is taking the typical leadership development provider out of their comfort zone. Fortunately, this is a myth. A credible impact and ROI study can be conducted that will meet the approval of the chief financial officer and involves only simple mathematics.
5. Not comfortable with business discussions. While most providers are knowledgeable in leader behaviors, facilitation skills, and motivation, some are uncomfortable discussing business issues with executives. Some say they don’t know how to start that conversation and keep it going. Fortunately, much has been published on this topic, including the book Performance Consulting. The book is designed to have those discussions with the ultimate client, the person who is requesting or funding the program.
6. I don’t know how to do this. Many lack the capability. The process is detailed in many books and case studies and taught through workshops and courses. Find a way that works best for you to gain the skills and knowledge to conduct an ROI evaluation.
This challenge prompts some critical questions for leadership development providers, including:
- Do you have credible data that shows your major programs made a difference at the impact and ROI level?
- If not, why not?
- If so, will it meet the approval of the chief financial officer?
- How are you using those results to promote your business?
Leadership development – The importance of impact and ROI
Successful leaders deliver outstanding results, including their impact on their organizations or spheres of influence. Without impact, leaders are considered ineffective. Achieving success requires leaders to deliver on five outcomes, including impact and ROI, effectively. Properly tracking ROI provides numerous benefits, such as increased profitability and informed decision-making. After tackling these above challenges a courageous leader can deliver on all outcomes in the face of many difficulties, challenges, and uncertainties in ambiguous environments.
This webinar will trace the transformation of leadership development through case studies and real-world examples to show you how you can achieve success.
Sign up now for this webinar on transforming your leadership development.
About the Authors
Patti P. Phillips, Ph.D., CEO of ROI Institute, Inc. ⇗, is a renowned leader in measurement and evaluation. Patti helps organizations implement the ROI Methodology in more than 70 countries around the world.
Since 1997, Patti has been a driving force in the global adoption of the ROI Methodology and the use of measurement and evaluation to drive organization change. Her work as an educator, researcher, consultant, and coach supports practitioners as they develop their own expertise in an effort to help organizations and communities thrive. Her work spans the private sector, public sector, nonprofit, and nongovernmental organizations.
Patti serves as a member of the Board of Trustees of the United Nations Institute for Training and Research (UNITAR). She serves as chair of the Institute for Corporate Productivity (i4cp) People Analytics Board; Principal Research Fellow for The Conference Board; board chair of the Center for Talent Reporting (CTR); and is an Association for Talent Development (ATD) Certification Institute Fellow. She also serves on the faculty of the UN System Staff College in Turin, Italy.
Patti has authored or edited more than 75 books on the subject of measurement, evaluation, analytics, and ROI. Her work has been featured on CNBC, Euronews, and in more than a dozen business journals.
Connect with Jack and Patti on Facebook, Twitter, and at www.roiinstitute.net.
Jack J. Phillips, Ph.D., chairman of ROI Institute, Inc. ⇗, is a world-renowned expert on accountability, measurement, and evaluation. He provides consulting services for Fortune 500 companies, nonprofit entities, and government and non-governmental organizations globally. He is the author or editor of more than 100 books, conducts workshops, and presents at conferences worldwide.
Jack has received several awards for his books and work. The American Society for Training and Development gave him its highest honor, Distinguished Contribution to Workplace Learning and Development. The International Society for Performance Improvement presented Jack with its highest award, the Thomas F. Gilbert Award, for his contribution to human performance technology. On three occasions, Meeting News named him one of the 25 Most Powerful People in the Meetings and Events Industry, based on his work on ROI. The Society for Human Resource Management presented him with an award for one of his books and honored a Phillips ROI study with its highest award for creativity.
In 2019, Jack, along with his wife, Patti P. Phillips, received the Distinguished Contributor Award by the Center for Talent Reporting for their contribution to the measurement and management of human capital. His work has been featured in the Wall Street Journal, BusinessWeek, and Fortune. He has been interviewed by several television programs, including CNN.
We recommend reading books authored by Dr. Patti Phillips and Dr. Jack Phillips to gain further knowledge.
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