It begins with a market need

Your a business owner, a consultant, a manager, a new employee… you see a need for something new and different. You begin to create, develop and market a product people will want. What are the steps you take? Who do you talk to in order to understand the past failures and successes to realize a sustainable future?

For a product or service it is pretty simple. You begin with an assessment and calculate the market need. You estimate and add up the operational cost and any other unexpected expenses that you may incur. You add the resources that will be used to create, maintain and sell your product. You take all that and subtract those costs from your estimated profit. How much you spent subtracted from how much you make is your revenue and potential ROI.

(Net Benefit / Costs) * 100 = ROI %

Market need for Leadership?

You are a member of leadership, a C-level executive, learning and development head… you notice a deficiency in your ranks. A lack of attitude, passion, drive, management style. Something missing in the way your people interact both personally and professionally. Strategy, critical thinking and vision are not always evident. You see a lack of something but you can’t pinpoint what it is. You want your front-line managers to take charge. You wish your direct reports, directors and VPs could have a better hand on the pulse of the organization and the thoughts of employees. You need your key people to become LEADERS. You need them to transform. You need a product (program) to do it.

However, soft skills, the abilities and innate insights born out of experience, coaching, circumstance and yes…training; these qualities are not traditionally considered in budget items, profit margins or revenue. If they are, they can be slashed at any moment. They are operational expenses, rather than looked at as organizational assets.

I believe that an organization – when it approaches the metrics of leadership need to – understand and be shown the value of such qualities just like any product or service. We also need to be prepared to defend a business case. Yet how do you show that value? How do you translate the skills of leadership into metrics and equity for the organization. Dan McCarthy delved into this topic over at GreatLeadership.com. I have some further ideas to add particularly on the side of measuring Leadership Development Programs (LDP).

7 Ways to measure a Leadership Program

While not always in the form of net dollar savings, you can show proof or evidence of how your program contributed to the organizational results.

1. Assessments. Anyone running an HR or L&D department that is worth their salt will do a deep assessment of various levels of the organization. This means evaluating what programs have been done in the past. Looking at past results. Reviewing performance reviews. Understanding the current content, programs and people that have been put in place. The attitudes around past, present and future initiatives. That individual will interview key people (C-level, Directors, Managers and employees of influence) in order to understand the expectations of results versus realities. Note: I do understand that this is not always allowed or possible in some organizations. But if you leave this out, you will have problems on implementation and expectations all throughout development and implementation of your program.
2. Objective and desired result. Begin to develop your program with 3 to 4 outcomes or behaviors that you expect to see after it is completed. Have clear objectives for each part of your program and make sure that you gain agreement on those outcomes and objectives. Afterward you can show actions or behaviors were improved or changed as a result against the objective.
3. Knowledge: Pre and Post-Test. Create tests based on your content. Deliver the tests to your program participants to check current knowledge, skill or ability against what they have gained from the program. After you have taken them through your program, give the test again. Compare your initial scores|outcomes against the final test.
4. Outcomes: Have behaviors changed? Do you notice a difference in attitude, initiative, collaboration? Are you witness to more sharing between departments; amongst management and employees? Are the staff complaints starting to increase or diminish? While not necessarily hard data, these items can be used as indicators for measurement and the performance review as a tool to aide.
5. Participant Group versus Non-Participants. If you have a program that only takes a locked number of individuals at any level of the organization, use the results from groups that attended and compare them to those that did not attend in the same areas. This will give you data to use and draw comparisons over time.
6. Costs: The simplest form of ROI measurement if the one we discussed earlier. (Net Benefit / Costs) X 100 = ROI %. In the end you either spent more or saved more.
7. Over Time. Creating and implementing your program and reviewing the result over one year is not enough to show a sustained improvement. You will need run multiple programs over time to have a systematic change in outcomes. You will need all this data over time in order to compare it to your past performance.

There is no standard

An organization will always have to:

1. Define what leadership means within the realm of its own business and culture, and
2. Define and create metrics to measure the results

Until there is one universal definition of leadership and leadership development, there will never be one standard to follow on metrics.

Do you think differently? How do you measure leadership development and its affects on the organization?

On Friday, June 4, 2010 I was once again a guest on DriveThruHR. It is a show that takes place Monday through Friday from 12pm – 12:30 EST, discussing anything related to the Human Resources industry.

On this episode we discussed doing “Training in a tough economy.” Many organizations, small shops and consultancies are being hit hard and Training has traditionally been considered a operational expense. In tough markets it is the first to go and the last to be brought back.

Click Here to Listen (For RSS)

Some points that were discussed:

• Recognizing what gaps and issues you have with your organization for Organizational Development and for Training,
• Do an overall assessment at an organizational level, executive level and employee level,
• Assess your people, your organization, resources and budgets,
• Create a plan,
• Look at what is key to maintaining and improving your business,
• Why is it such a challenge for an organization to have, develop and deliver training programs,
• Low cost resources for training,
• Major League Baseball (MLB) and Spring training,
• Are organizations in “survival” mode or are they ready to ‘survive and thrive’ after the smoke clears.

Do you have any resources for free or low-cost training that you use? Any thoughts or added parts to share?

HR-The New Cool Kids

Recently, I came across an article from Fast Company written in 2007 entitled “Why We Hate HR” stating many reasons why Human Resources functions are ineffective at driving ethics, business strategy and the culture of an organization. Some points raised that were proof of this: HR people, at a Las Vegas HR conference, held education in communication at a higher value then Law, Business and Strategy. Even stating that the function did what was organizationally expedient rather then what actions were more valuable to the business. While there were many statements that were listed, one quote summarized many of the points in the article best by saying, “most HR organizations have ghettoized themselves literally to the brink of obsolescence…” ouch. A Big Lebowski ouch.

So here we are almost three years later and what has changed about the function or the people within it. I think a lot. At least from what I am seeing. While this article and those within other areas of business may find HR obsolete. I believe that this is a time where HR, HRD, OD and all the other acronyms you can list has started to see a rise in the times. In my personal opinion, I feel that HR has never been given it’s just do. But you have to get over that and suck it up because; as Tom Hanks would say there’s no crying in baseball.

Even while many of us within are doing what is needed to provide value and access, I believe that in the past, the business world has never allowed or given permission for us to be effective. It may be as if it has subconsciously set HR up for failure. Even with this past, I feel that we have the potential to be needed now more than ever. Here are some of the reasons why:

1. Building the Company Brand – An employee experiences all of HR. They are often interviewed, on-boarded; take part in performance reviews and disciplinary hearings with us present. There is no doubt that with as many people that are unemployed there will be damage to a company’s brand during the off-boarding process as well. You see this person being let go is not just an employee but may have been customer and referrer of your products and services. The negative feelings at departure could turn into negativity towards the company and a severely bad attitude toward its reputation as well. When I hear negative comments about a company, I most often times hear it in context or in direct connection to HR. While HR may not have been the cause of that employee’s unemployment, they are definitely a part of that employees experience at departure. We can be the next big game-changer of the perception of that employee and all in the future. If anything, there is a possibility that we can help turn around that person’s idea and perception of the company.
2. Re-Acquisition and Retention of Talent – “Gatekeeper” is often a word closely associated with HR. Within the recruiting cycle we source, attract and can even grant entrance to key positions within the company. With the unemployment rate reaching 9.5% as of October 2009 there are more people, talented and educated, that have been downsized. Many of these individuals are not only looking for security, but also the opportunity to help create value to the bottom line within the company. Regardless of industry, we are positioned to help the business and its managers understand who is out there and how to attract them. We, as HR, also have the potential to help management understand what it takes to develop and retain this talent so they can become a dedicated force that helps to build commitment to the company and marketers of its products and services.
3. Strategy, New Ideas and Approaches – Just under the surface, a new crop of HR professionals are molding and changing the landscape as we know it. All across the landscape in articles, un-conferences, on internet radio, blogs, tweets and in the marketing of HR, professionals are speaking up, being open and honest about the direction of the field and where we need to be as it relates to the effectiveness of the employees.
4. Law and Benefits – Let’s face it, who knows better about how new employment law, benefits and legislation changes affect the employee and business. They need us in order to assess and evaluate what options are best available. Well maybe they don’t but maybe they do!
5. Good HR can improve performance – Read the article!

SUPER HR

With the economics of today, more candidates understand the importance of contributing to a company. Yet at the same time more and more individuals are not only wanting a great career with growth opportunities, but also a work life balance with the knowledge that a company will not only let them be a functioning employee but also a fully functioning individual. When it comes down to it, good HR is good business. These are just a few of the many reasons why I know Human Resource people are the new cool kids in town. Let’s not just show everyone how cool we are; let’s make them all see just how cool of an asset have been and will be in the future.