Certainly it matters – but how much?

By Jørgen Thorsell, Mannaz

We regularly have interesting dialogues with Global 500 corporations which often leave us with an intriguing reflection - they tend to be frontrunners in the profession of HR and executive development.

Recently, we visited a large automobile manufacturer in order to discuss how to make executive development more effective in their organisation, which meant in their case, more outcomes for less investment. In the past, they had had a strong focus on implementing a new set of corporate values and incorporated them into the portfolio of management development initiatives. Now, top management had asked them to make a thorough scientific investigation of the corporate value initiatives and their impact on bottom line.

Interestingly, in another large automaker, we met the exact opposite opinion of demonstrating impact from management development activities. The newly appointed Corporate Learning Officer was ready to install systems and structures to ensure proper documentation on the return of investment of their initiatives to support decision making in their field of the business. Top management asked him to concentrate all energy on actual management development. In their eyes, it was more important to spend limited HR resources on execution rather on documenting impact.

ROI: Just a U.S. obsession?
In the U.S. there does seems to be more focus on documenting ROI on HR initiatives than in Europe. Our partner in the U.S., The Institute of Executive Development, has recently conducted a survey of best practices within executive development. They found that the most effective management development is based on real life and urgent personal management matters. While learning new management approaches, you are actually being trained in solving an urgent matter back on the job. This assures immediate action and effect when back in the office. This approach appears to be the easiest to document impact afterwards.

The survey also confirms that current corporate practice to a large degree, lends itself to the thinking of The ROI Institute and Kirk Patrick, who sets the norms on how to document impacts of HR activities.

Interesting new European approach
According to our experience, few European corporations are ready to invest money and time to document actual return on investment. They tend to be convinced of the notion on how costly ignorance is, in contrast to the cost of gaining proper insight. Recently, another partner of ours, GFGO (based in Germany), has experienced great interest in a new approach to focus management development more effectively on the issues with demonstrated relevance on the bottom line.

Rather than spending resources on measuring outcome, GFGO suggests an identification of management behaviours that actually have a demonstrated correlation with the bottom line result or any other KPI.. Over many years, GFGO has developed and practiced statistical identification of corporate behavioural issues to help corporations focus leadership initiatives on just what makes impact. When you know the relationship between leadership behaviours and business performance, you can just focus on these behaviours when designing leadership development initiatives. In addition, you will have the prioritised behaviours which will help you greatly in allocating your resources on the issues of most impact.

Leaner learning processes
Recently, we have have found a third approach which focuses on implementing effective learning processes in the organisation. Basically, most, if not all, can improve the commitment to actually execute new insight into daily operations. In Northern Europe, the wave of becoming a leaner operation is still at its high for administrative operations. However, we have just recently experienced an organisation which has seriously focused on leaner learning processes.

Scandinavian Training Design has, in corporation with Professor Robert O. Brinkerhoff, implemented his concepts of High Impact Learning in a large Norwegian corporation. They have developed and implemented a software based solution which makes learning stick to the organisation much more than we see elsewhere.

The system ensures that proper preparation takes place ahead of any learning event. All involved are getting firm and precise information on the reason behind any initiative, the intended impact and the actions needed to ensure the impact. All intentions and actions are reported in the system which helps ment to use the system. Due to Brinkerhoff’s findings, most outcomes get lost in the transfer to daily routines due to lack of systems and commitment to procedures. The more you prepare, involve and commit, the higher the impact and the more the individual and the organisation gain.

Leadership development is on its way to higher professionalism
We may consider ROI relevant or not when it comes to demonstrating the outcome of management and leadership development. The fact is that many new and interesting approaches are appearing which are promising for the future level of professionalism within the profession of executive development and HR.

About the author
Dr. Jørgen Thorsell is Executive Vice President responsible for international activities at Mannaz. He has been with Mannaz since 1984, with a break from 1987 to 1990 when he gained his Doctorate degree in corporate strategy from United States International University, San Diego. He has extensive experience in designing and implementing leadership and management programmes and he is responsible for the business units providing in-house Management and Leadership Development activities.

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