Maria, can you settle something for us?”

Maria had barely settled into her office after the budget meeting when Ed Eddington and Tom Washington burst into her office. She wondered why the vice president of shared services needed her help with an issue relating to her new chief learning officer.

“OK, Ed, what’s going on?” She said.

“Tom wants to eliminate my leadership development program,” Ed replied.

“I didn’t say that,” Tom said.

Temperatures were getting a little hot, so Maria intervened. “What did you say, Tom?” She asked.

“I said, we need to look at the program and consider whether it should be continued.”

“It sounds like he wants to cut it to me,” Ed said.

“OK, Ed, calm down,” Maria said. “Let’s talk through this and see if we can figure it out.”

Ed calmed a bit, but still seemed agitated. As head of shared services, he had a lot of employees under him. While not involved in the revenue generating aspects of the business, most of the support staff reported to Ed. He was very protective of his people and he had a reputation for investing in the development and advancement of his people. His people liked it that when there was an opening, he promoted from within rather than looking outside. Ed himself had risen through the ranks from an entry-level accounts payable position to the vice president job. He had been with the company for more than 25 years and was universally liked.

Ed started, “It’s pretty simple. We’ve been running our leadership development program for a long time and now Tom comes in and wants to look at cutting it. Maria, I know you’re big on investing in people, so I know I can count on you to nip this in the bud and let me continue with my program, right?”

“Well, you’re right that I believe in investing in people, but I can’t give you carte blanche to run a program until I know a little something about it.”

“What do you need to know?” Ed said. “The title says it all. It’s a leadership development program for the people in shared services. Don’t we want to develop the leadership capabilities of our people?”

“Not necessarily,” she said.

Both Ed and Tom were surprised by Maria’s answer.

“Why wouldn’t we want to develop leadership capabilities?” Ed asked.

Maria answered the question with a question, “It depends—what do you mean by leadership?”

Ed was surprised by the question. “You know, leadership.” He said.

“No, Ed, I really don’t know. The term leadership means a lot of different things to a lot of different people.”

Ed was getting confused. “I think we all have a general idea of what leadership is.” He said. “And whatever words we choose to define it, can’t we all agree that it’s a good thing? And that more of it is better?”

Maria knew this was going to take a while, but patience was one of her virtues. “First of all, I’m not sure that a general idea is good enough,” she said. “There are hundreds of books on leadership published every year and they all define it differently. If we’re going to invest a lot of money and even more resources in terms of people being away from their jobs and in a classroom, I think we should at least be aware of what the course is trying to teach beyond a vague, general notion of leadership. Ed, I assume you’ve sat in on some of the sessions at this leadership development program?”

“Yes, I have,” he said.

“So how would you define leadership?”

Ed thought for a moment. He knew he had to be careful here. “Well, at its most fundamental level, leadership means the ability to lead.”

Maria smiled. He was right about that. “That’s a good start,” she said. “But now I have to ask, what does it mean to lead?”

Ed knew that was coming. “I guess it means getting people to accomplish goals.”

Maria had more questions. “Isn’t that a description of what ‘management’ is?” she asked.

“I’m not sure I know what you mean.” Ed said.

“Ed, you have people reporting to you. Your job as a manager is to get your people to accomplish goals. For some people who might need motivation, you can motivate them with rewards or consequences. For most people, you probably just have to set the goals and objectives, make sure they have the proper resources, and then just keep an eye on things to make sure the jobs get done.”

“Yes…”

Maria continued, “That’s management. In your leadership development classes, I’m sure you teach more than having managers make sure their employees get the work done.”

Now Ed was starting to understand. “Sure,” he said. “In fact, one of the things we teach in the leadership development program is that leadership has nothing to do with where your job happens to fall on the organizational chart. Anyone can be a good leader, regardless of positional authority. As a matter of fact, that’s one of the primary goals of the program. We want to have leaders at all levels. Our goal is for everyone in shared services to be a leader.”

“If everyone is a leader, who’s going to follow?” Maria asked.

“Huh?” Ed said, confused again.

“Ed, you said earlier that at its most fundamental level, leadership means the ability to lead. But in order to lead, someone must follow. Does this sentence make any sense: ‘I’m a great leader, but no one is following me’?”

“Not really.”

“We invest so much in teaching people how to lead, that we forget to teach them when to lead. There’s a time to lead and a time to step back and let others lead. We really don’t want everyone in the organization trying to lead all the time.”

“OK, Maria, I get that. But wouldn’t you at least agree that it’s a good thing to make sure our people have the ability to lead, either for those times when they need to or perhaps as they advance in the organization?”

“Again, not necessarily.”

“Why the hell not?”

Oops. She had been trying to calmly get Ed to understand her point, but she hadn’t made it yet and Ed was more annoyed than ever.

“OK, Ed, let’s back up a minute,” she said. “Would you agree that we’re investing a lot in this leadership development program?” She was careful to use the word invest rather than spend.

“Yes.”

“How much are we investing each time we offer the program?”

“I don’t have the exact figure, but I can get it for you.”

“Without getting me the exact figures, can you tell me what the various expenses are?”

“Well, there’s the cost of the facilitator. We also provide some books and materials. There’s a continental breakfast, lunch every day, and cookies in the afternoon.”

“How long does the program last?”

“It’s a three-day program.”

“And how many people are in it and how often do you run it?”

“We’ve been doing it twice a year, and we’ve got 20 people in each class.”

“Ed, wouldn’t you agree that the salaries and benefit costs for 20 people being in class instead of on the job would be part of the calculation of our overall investment?”

“Sure.”

“So what has been our return on this investment?”

“I know we’ve gotten a lot of value from this class.”

“How would you measure that value?”

“I’m not sure I could put a precise dollar value on it,” Ed said. “Is that what you’re asking?”

“A precise dollar figure would be nice. We can certainly put a price on our costs, so it would be great if we could also value the benefits. But failing that, let me ask it another way: What are the business outcomes you’re trying to drive?”

“I’m not sure I know what you mean.”

“This is a business, not a school. If we’re teaching people something, there should be a good business reason behind it.”

Ed had to think for a moment. “I guess we’re trying to drive better leadership deeper into the organization.”

Maria shook her head. “Better leadership is not a business outcome,” she said. “We’re not in business to have better leadership. Better leadership might be a means to an end, but it’s not an end unto itself. So let me ask again, what are the business outcomes that might derive from having better leadership deeper into the organization?”

“Are you asking me to prove conclusively that our leadership development program makes the company more profitable?”

Now he’s getting it. “Ed, greater profitability would be a terrific outcome for this program, but it’s not the only potential business outcome. If you could demonstrate higher productivity, greater customer satisfaction, increased employee engagement, greater retention, fewer errors—any of these things might be a desirable business outcome.”

“Maria, I know the program is doing us some good, but I’m not sure I can prove a direct connection to any of those outcomes.”

“Ed, I think the problem here is that you can’t link the program to any business outcomes because the program wasn’t designed to deliver any of those outcomes. You said the program was designed to develop the leadership capabilities of our people. But that’s not a business outcome.”

“So you don’t agree that better leadership is a good thing?”

“It’s a good thing if it drives business results. If there are no measurable business outcomes that result from the program, then it’s just a waste of valuable resources.”

“So are you telling me I’ve got to get rid of the program?” Ed said. He appeared to be disappointed.

“Not necessarily. I’m saying you’ve got to figure what business outcomes the program is trying to drive. If you can define those outcomes—and measure them—then the program is a keeper. But if you can’t define the desired business outcomes, then there’s no reason to continue doing the program.”

Now Ed looked more thoughtful than disappointed. “I’m going to have to think about that. I’m not sure if I can do it, but I’ll give it a try.”

Ed and Tom got up to leave. They thanked Maria for her time.

“Guys, thanks for coming in. I think this was an important and useful conversation.” She added, “Tom, can you stick around for a minute?”

When Ed had left the office, Tom started to speak, “Thanks, Maria, for helping to clarify this for Ed. That’s exactly what I meant when I told him we needed to look at the program.”

“You may not be so grateful when you hear what I have to say next.”

“Uh-oh.” Tom realized he said that out loud.

“I’m going to need you to go through the same process for every course, program, and initiative that your department is doing or proposing.”

“That’s a tall order,” he said.

“Yes, it is. But I promised the executive team that training and development is an investment, not a cost.”

“I’m on board with that.”

“So for everything we do in training and development, we need to demonstrate a return-on-investment.”

“How do we do that?”

“Well, for starters, we need to define the desired business outcome for everything we do in training and development.”

“I guess we can do that. What if we discover there are programs like Ed’s that don’t have a predetermined business outcome?”

“I think you know the answer to that question,” Maria said. “We need to either see if there really is an underlying business outcome, or, if there really isn’t, then we need to cut it.”

“Fair enough.” Tom knew that wasn’t all there was to it. “But you said ‘for starters’…”

“Yes. After we determine what the desired business outcome is, we need to determine how to measure whether we’re achieving that outcome.”

“But isn’t measurement really hard?”

“Usually not,” Maria said. “If you can clearly define the desired business outcome in advance, then figuring out if we’ve achieved the goal usually isn’t difficult. And if you can’t clearly define the business outcome in advance, then measurement isn’t your problem.”

“But what if we can’t definitively prove cause and effect?”

“What do you mean?”

“What if I can’t prove that my training initiative was the direct cause of the business outcome? There are a lot of variables that drive our various business outcomes.”

“True. But, Tom, if you design a program to improve one of our business metrics, and you deliver the program, and then we see improvement in that area, then that’s good enough for me. And it will have to be good enough for our executive team. We can demonstrate correlation. We can’t always prove causation, but I don’t think we have to.”

“And I assume the flip side is true?”

Maria knew where he was going with this. “Yes, I would say if you design a program to improve a certain area of the business and, after delivering the program, there is no demonstrable improvement, then we would have to conclude that the program did not succeed.”

“But sometimes it takes time for the learning to translate into behaviors and for those behaviors to have a measurable impact on business results.”

“Absolutely. So moving forward, for every program or initiative you offer, you need to clearly state upfront what the desired business outcomes are, what the metrics will be, and what the timeframe will be for measuring and seeing results.”

“For every program?”

“Absolutely and without exception. What’s the point in running any program without having a desired business outcome? And if you do have a desired business outcome, we should be able to see the results.”

“You know this is really going to shake up how this company does training and development, don’t you?”

“Yes, but this is vitally important. I’ve convinced the executive team that our training and development function is an investment, not a cost. That’s one of my Talent Management Principles. But it’s not enough to stand on its own as a principle. That’s why it leads into my next principle.”

“But is it really necessary for us to show a return-on-investment for everything we do?” Tom asked.

“I think it is,” Maria said. “Someone like Karen is always going to ask what our return-on-investment is, especially for a department like training and development that hasn’t had to justify itself in the past.”

“But Karen’s a pain in the neck.” He said.

Maria smiled and replied. “Yes, but that doesn’t make her wrong.” She continued, “Think about Bobby. His job as CFO demands that he seeks a positive return for every capital investment that this company makes. We should be no less demanding about our investments in our human capital.”

Tom knew she was right. “You realize you’ve made my job a lot harder.”

“It’s not just your job, Tom. It’s mine as well.” She then added with a smile, “I guess that’s why we get paid the big bucks.”

Organizational Assessment

Questions for Personal Reflection

1.  Was there anything described in chapter 8 that seemed descriptive of your organization?

2.  Have you ever taken part in a leadership development program? Did it make you a better leader? If yes, then how?

3.  Have you been able to translate what you have learned in leadership development programs into business results? If yes, then how?

4.  Have you ever taken part in a training program that had virtually no value? If so, why didn’t it have value?

5.  Have you ever taken part in a training program that was valuable? If so, why was it valuable?