Prioritizing leadership development has become a key initiative as companies realize the need to build skill sets not only to retain top talent but also to successfully manage in an increasingly volatile political, social, and economic business environment. Historically, leadership development has been difficult to measure. This continues to be true today, even with new people analytics technology. Results can take months or years to manifest.
New research from Heidrick & Struggles found that companies are increasing investments in leadership development over the next three years to the tune of more than $50 billion in 2026. More than three-quarters said they are concerned about losing talent, and more than nine in ten believe learning and development can increase retention.
According to the research, “key stakeholders often resist engaging in the effort it takes to tease out these types of findings. Reframing the goal of measurement can change the game: instead of assessing whether a given learning intervention was well received, the focus should be on the extent to which a leadership development journey fostered observable growth and helped leaders generate more value for the business.” The work found five leadership development success factors through a collaborative evidence-based approach:
- Defining success in tangible terms
- Diagnosing baseline data
- Developing a data-informed learning experience
- Determining early indicators and adapting incrementally
- Documenting and reporting evidence of business impact and creating the virtuous circle
Defining success in tangible terms
The first step is to align the metrics. The study suggests asking the following questions:
- What business problem(s) are we trying to address?
- How can learning help?
- What business outcome(s) are we trying to achieve?
- Which business key performance indicators (KPIs) should we target?
- When can we expect to see significant movement in these KPIs?
In answering these questions, you can also look back to see if you had similar goals previously and, if so, how you did against them. If not, why not?
Diagnosing baseline data
Now that you have agreed on the metrics to be used, it’s essential to set your baseline, which may or may not already exist. Starting with the behaviors leaders are expected to exhibit, you can begin building your baseline. Additional metrics could include online surveys, performance reviews, employee surveys, 360-degree evaluations, or operational and financial dashboard information.
Developing a data-informed learning experience
With your metrics determined and baseline in place, you can begin to develop your leadership development initiative. The goals will be specific to your company based on the identified gaps, behaviors, and needs. To meet your goals, the research suggests tools such as mentoring, workshops, coaching, learning modules, and cohort projects.
This is also an opportunity to use cross-functional leaders to teach and coach. This not only provides exposure to other leaders in the organization it also gives participants new points of view to consider and can help them grow their own thinking.
Determining early indicators and adapting incrementally
Once you launch your leadership development initiative, it’s time to communicate to everyone so they understand what success looks like and what is expected of them. Recognizing results will take time, so ongoing communication is important. Establishing indicators can tell if you’re on the right track or if you need to make any adjustments.
With in-person and online sessions, you can gather real-time information with quizzes, surveys, and asking for feedback. Other examples of good communication include peer coaching, senior leader check-ins, and focus groups. These can provide great feedback on what leaders have learned and applied to their roles.
Documenting and reporting evidence of business impact and creating the virtuous circle
Now that the initiative is underway, you can look at the metrics at the intervals agreed upon. In combination with the qualitative data, this data will give you an idea of your progress toward your goals and the impact on business results. According to the article, “It is important that business stakeholders, as well as the L&D team and HR management, fully engage with the results and agree on next steps to improve learning and business impact.”
Leadership development is an ongoing initiative; through this process, you can continuously improve your results. Building a stronger team of leaders and retaining them provides a competitive advantage that is hard to match.
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