Criticism of leadership development programs often stems from the lack of hard data measuring how the programs affected leaders’ behavior and the company’s bottom line business metrics. In fact, less than 8% of CEOs ever see the business impact of their leadership development programs or the return on investment (ROI), according to a recent LinkedIn survey.
Development Dimensions International (DDI) released “PROOF,” the world’s largest and most comprehensive report on the effectiveness and ROI of a leadership development program. Based on 42 years of data, 186 unique studies, and surveys of more than 18,000 participants, the study focuses on Interaction Management®, a behavioral change program which is the longest-running and most widely-used program in the leadership development industry.
“DDI is a pioneer in leadership development, and we have more than four decades of data and research spanning nearly the entire history of the modern leadership development industry,” said William C. Byham, Ph.D., cofounder and executive chairman of DDI, in a press release. “This report pulls together a significant body of work that shows the measurable impact of leadership development on the behavior of leaders and on the behavior of those they lead. For example, the report showed that 81% of people were more engaged in their jobs after their leaders applied [Interactive Metronome] IM training.”
Overall, the study showed that the organizations in which leaders employed IM reported ROI ranging from 147% to 633%. Most notably, critical business success metrics improved after leaders applied IM. For example, individual companies found:
- Sales increased 114%
- Accidents decreased 60%
- Productivity increased 36%
- Grievances dropped 105%
- Work quality improved 48%
- Turnover dropped 77%
- Absenteeism dropped 90%
- Customer satisfaction increased 71%
“Businesses only see these types of positive results if the leadership development program they use permanently changes the way that leaders behave and interact with their direct reports, colleagues, and managers,” said Byham.
In “PROOF,” 6,408 managers, peers, and direct reports rated how leaders’ behavior changed after they applied IM training:
- 41% more leaders became effective at asking for others’ help and encouraging their involvement (76% of leaders overall were effective).
- 39% more leaders became effective at maintaining or enhancing others’ self-esteem (75% of leaders overall were effective)
- 33% more leaders were effective at supporting others without removing individual responsibility (77% of leaders overall were effective)
- 32% more leaders were effective at listening and responding with empathy (7% of leaders overall were effective)
- 31% more leaders were effective at openly sharing their feelings and concerns (77% of leaders overall were effective)
Other key findings in the study include:
- Leadership development helps young leaders make up for inexperience. Prior to undergoing IM training, only 52% of leaders with 1 to 2 years of experience in a leadership role rated themselves as effective leaders, while 60% of leaders with 10 or more years in the role thought they were effective. After IM training, roughly 85% of leaders at all levels of experience rate themselves as effective.
- Women feel more confident in their roles after leadership development programs. Among women leaders, 82% reported that they were more confident leaders as a result of participating in IM programs.
- Leaders take their training home with them. Among more than 300 leaders who participated in at least one IM course, 82% reported that they also used the skills they learned to improve their relationships at home and in their communities.
“I’m especially excited that the study is replete with actionable recommendations for companies and their leaders to get the most out of their leadership development initiatives,” said Barry Stern, Ph.D. senior vice president, Accelerated Development Solutions, DDI.
View the complete study “PROOF” here.