changing the currency: new research on how businesses measure the roi of executive development
TRANSCRIPT
Changing the Currency
New Research on How Businesses
Calculate the ROI of Executive Development
Vistage International
November 2012
How do businesses measure ROI on
executive development efforts?
What methods of executive development
are most used?
What methods are most effective?
Who We Talked With…
• Ulrich Nettesheim, Lecturer, UC Berkeley’s Haas School of Business
• Steven Stripe, Senior Vice President of Finance, Equifax
• Katie Rials, Director of Human Capital Development, SCI Companies
What We Created…
• 31-Item Survey
• August 2012
• 346 responses representing more than 175 organizations worldwide
State of Leadership
• Impactful leadership development directly
tied to business performance
• Financial limitations continue to put
competing pressure on development
initiatives
• Collaboration, communication and shared
vision are key area of focus
State of Executive Development
Hybrid
Non-Traditional
Executive Development
Traditional
Executive Development
Defining Differences
Traditional Non-Traditional
Leadership Retreats Internal Peer Group Meetings
Workshops Regular Cross-functional team meetings
E-learning/Online Training Custom-designed development plans
Classroom Training Executive Coaching
University/Advanced Degree Programs External Peer Group Meetings
Off-site Seminars/SpeakersInternal Leadership Meetings facilitated by
external consultant
Rotational Assignments
Most PopularTraditional Non-Traditional
Leadership Retreats Internal Peer Group Meetings
Workshops Regular Cross-functional team meetings
Off-site Seminars/Speakers Custom-designed development plans
E-learning/Online Training Executive Coaching
University/Advanced Degree Programs External Peer Group Meetings
Classroom TrainingInternal Leadership Meetings facilitated by
external consultant
Rotational Assignments
TDO
48%
HDO*
52%
Traditional vs. Hybrid
* Hybrid development organization = those that use four or more peer-based / collaborative
(non-traditional) executive development methods annually
Changing the Currency
Cutting-edge collaborative executive
development methods require leaders to
examine how they measure success
– Financial metrics remain important
– Research revealed additional metrics that
help business leaders measure effectiveness
HDOs are more aligned to a common vision
64%
62%
56%
64%
87%
89%
84%
85%
Executives are more informed about the goals/processes of the organization
Executives share a common vision for the organization
Executives frequently work together
Across business units, goals are aligned
HDO
TDO
Q: Please describe how your organization’s approach to executive development affects the alignment between
Execs and overall business strategy. (% strongly or somewhat agree)
Alignment
HDOs are more collaborative
59%
78%
49%
39%
35%
73%
91%
73%
52%
55%
Collaboration is part of our company culture
Group conversations take place outside of meetings
My company has an open dialogue & common language
Business units fully support decisions made by other business units
Senior leaders are comfortable having difficult conversations
HDO
TDO
Q: How much do you agree/disagree that the following practices related to collaboration are exercised in your
organization? (% strongly or somewhat agree)
Collaboration
HDOs are better at resolving conflict
39%
37%
46%
43%
59%
56%
69%
63%
People rely on open dialogue & communication to discuss conflicts
There is a clear understanding of who is best positioned to solve problemss
When faced with a conflict, leaders calmly & collectively face issues
All parties relevant to a conflict are given equal opportunity to share
HDO
TDO
Q: As a whole, how effective is your organization at the following conflict resolution methods? (% very or
somewhat effective)
Collaboration
Executives in HDOs feel more ownership
of the strategic direction
66%
66%
87%
83%
Executives have ownership of the strategic direction
Executive team determines the strategic direction of the company as a group
HDO
TDO
Q: How much do you agree/disagree that executives at your company feel like they have ownership of the
strategic direction of the company? (% strongly or somewhat agree)
Execution
HDOs make strategic decisions faster
50%
40%
36%
69%
54%
56%
Speed at which strategic decisions are made
Speed at which new initiatives are implemented
Speed of necessary course correcting
HDO
TDO
Q: How effective is your organization at the following: (% very or somewhat effective)
Execution
Keys to Increased Retention
• Leadership
• Aligned Rewards Systems
• Culture
• Development / Growth
Retention
Research did not uncover any key differences regarding retention among HDOs and TDOs.
This could be an area that warrants further research.
HDOs have greater bench strength
14%
27%
48%
44%
51%
71%
My organization has ready replacements for key positions
My organization is able to identify bench strength
My organization promotes the internal HiPo population
HDO
TDO
Q: How much do you agree or disagree with your organization’s approach to succession planning? (% strongly or
somewhat agree)
Succession
HDOs achieve better growth rates
43%
11%
36%
15%
Flat or negative growth
10% + growth
HDO
TDO
Q: Please describe the growth rate of your organization’s revenue in the last fiscal year:
Growth
The Payoff: HDOs Better Positioned for
Business Success and Stronger Growth
• Blended approach – it’s the mix that matters
• Collaborative methods build the capability of the organization, not just the individual
• Collaborative, peer-based models drive best results
Visit us at www.vistage.com/hci to download the entire
research report and for more information on
collaborative, peer-based executive development programs