Journal: People Science - Human Capital Management & Leadership in the public sector Volume 1, Issue 2 Spring/Summer 2014 - Page 28

Jack J. Phillips Measuring ROI in Leadership Developement Is it Possible? • Is it Necessary? Introduction As we are involved in measuring leadership development in public sector, two questions quickly surface: Can you really measure the return on investment (ROI)? Should you measure ROI? The answer to the first is “yes,” and the second is “maybe.” You certainly can measure the ROI of leadership development if there is a need and it is appropriate to do so. On the second question, it depends if ROI is really needed. Figure 1 presents the possible levels of evaluation. The vast majority of leadership development should not be measured at the ROI level. We suggest about half of leadership development measures should be measured at Level 3, application, maybe only 10% at Level 4, business impact, and at most 5% at Level 5, ROI. The ROI should be reserved for programs that are 23 expensive and are designed to deliver business value. In the government setting, there are many opportunities for business value. In every work unit, there is output, quality, cost, and time measures that define the performance of the work unit. For example, in the work of processing visas for international travelers coming to the United States, the visa section has output (number of visas processed), quality (the number of errors made on visas), time (the time it takes to process a visa), and cost (the unit cost of a visa). A leadership development program for the leader of that unit should connect to, and improve, one or more of those measurement categories, which are all business measures. The difference in the private sector and public sector is that the public sector does not have revenues or profits, the two types of output measures.