Leadership Development

and Your Business

John Kmiec, Ph.D., CRPInstructional Systems Design ConsultantSAIC Training and Simulation Service LineJohn.J.Kmiec.Jr@saic.com | 228.365.2559

Overview• Purpose of this Discussion• Cost of Leadership• Core Leadership Assumptions• Working Definitions• Issues Impacting Leadership Effectiveness• Leadership Development Example• Additional Resources

PurposeThe purpose of this discussion is to examine leadership development, what it is and what it is not, its costs and benefits, issues impacting its effectiveness, an example, and additional resources.

Cost of LeadershipAmerican companies spend about $24.5 Billion/Year on Leadership Development programs – 35% of $70 Billion spent on training annually

• 60 percent of all companies cite “leadership gaps” as their top business challenge – from front-line supervisors to executives

• Global expansion, rapidly expanding technologies, and capability gaps drive leadership development needs – especially for Millennials

Source: Spending on Corporate Training Soars: Employee Capabilities Now A Priority by Josh Bersin, 2/04/2014, Forbes Business, www.forbes.com

Cost of LeadershipFrom front-line supervisors to executives, “lousy” bosses, leaders and managers present a real and present danger to employee engagement, productivity, and profits.

According to Gallup, employee engagement levels in the United States have remained stagnant the year 2000.

• 30-percent are Engaged (Involved, Enthusiastic and Committed)

• 50-percent are Not Engaged (Present but Uninspired)

• 20-percent are Actively Disengaged (Outright Saboteurs) Source: State of the American Workplace: Employee engagement insights for U.S. business leaders by Gallup, 2013, http://employeeengagement.com/

Cost of LeadershipCosts U.S. organizations $450-$550 billion* in lost productivity and missed opportunities – Annually!

* Source: State of the American Workplace: Employee engagement insights for U.S. business leaders by Gallup, 2013, http://employeeengagement.com/

• Waste and Rework• Accidents and Incidents• Legal Issues (Lawsuits)• Lagging Innovation• Lost Productivity• Declining Sales

• Employee Turnover• Absenteeism and

Presenteeism• Higher Health Costs• Outdated Infrastructure

• Customer Complaints • Inventory Control Issues

(Theft)• Lost Business

Opportunities

Core Leadership Assumptions• Leadership is contextual and is influenced by culture.• Leadership competencies can be learned and developed.• Leadership development is a lifelong process.• Leadership does not require a formal position.• Leadership is inclusive.• Leadership development is grounded in the awareness of strengths.• Understanding the civic and global dimensions of leadership is essential.• Leadership is ethical and is values-driven.• Leadership directly and profoundly impacts employee engagement, work performance,

business results, and profitability.

Source: Core Leadership Assumptions adapted from Komives, S.R., Lucas, N., & McMahon, T.R. in Exploring Leadership: For College Students Who Want to Make a Difference (2007). San Francisco: Jossey-Bass Publishers. George Mason University, 2015, http://masonleads.gmu.edu/.

Working Definitions• Leadership is a process of social influence, which maximizes the efforts of others,

towards the achievement of a goal (Kevin Kruse, Forbes, 2013).

• Followership is the ability to take direction well, to get in line behind a program, to be part of a team and to deliver on what is expected of you (John McCallum, Ivey Business Journal, 2013).

• Development: Development prepares people for additional job roles for the long term; it refers to more personalized, individualized growth experiences, such as a certification process, job rotation period, coaching or mentoring (Tara Duggan, Chron, 2015).

• Training is the process by which people are taught critical skills to improve their performance in the short term. (Tara Duggan, Chron, 2015) .

Issues Impacting Leadership Effectiveness

• Failure to provide enough leadership development across multiple levels in the organization.

• Too many ad hoc, sporadic, or overly compressed frontline manager leadership development programs that inadequately cover critical responsibilities.

• Failure to build an organizational culture that enables, supports and rewards positive leadership behaviors.

• Lack of Mentoring and Coaching from Experienced Leaders. • “Do What I Say, and Not What I Do” – Failure to Lead By Example.• The “One and Done” Leadership Training Mentality.• Investing too little too late into developing young leaders.• Little or No Accountability for the results of leadership development programs.

Leadership Development Example

• PolyWrighton manufactures high quality, lightweight plastics used to package food, beverage and personal care products

• Complex, massive, hazardous machinery used to process tons of toxic, flammable chemicals under high heat and pressure

• Rigorous hygienic, chemical and environmental safety standards and specifications leave very little room for error

• Raw materials are expensive and frequently in short supply, making reduction of product waste and rework imperative

• New owners wanted better operational and financial performance

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Leadership Development Example

Program Needs• Product Waste ($245K/1%) and Rework ($35K/1%) costs $272,850/month

($3.27M/year)

• Stressed work environment barrier to Work Engagement

• Immediate managers unskilled and inexperienced

Evaluation Needs• Effectiveness of learning intervention?

• Increase Work Engagement?

• Reduce Product Waste and Rework?

• Rollout Decision?

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Leadership Development Example

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• Immediate managers play a pivotal role in creating motivational work environments that positively impact employee satisfaction

• Employee satisfaction is related to work engagement; psychological state characterized by absorption, dedication, and vigor

• Increased work engagement is associated with improved job performance, business impact and profitability

• Companies with world-class engagement have 3.9 times the Earnings per Share growth rate compared with organizations with lower engagement in their same industry. (Source: http://www.gallup.com)

Performance Ability + Motivation + Opportunity

Training, education and experience

Confidence (I can) and commitment (I will)

What the organization provides to employees

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Leadership Development Example

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N Purpose: To prepare immediate managers to more effectively create and sustain motivational work environments that positively impact work engagement and organizational performance.

• 90-Day (7 session) Learning Intervention based on the 5-Skills of Savvy Managers

• Focuses on introspection and self-coaching of the skills for continuous learning and development

• Blended learning format (classroom, online, on-the-job skills practice, journaling, and peer-review/interaction)

• Test Group (Production Unit) and Control Group (Maintenance Unit) research design

Leadership Development ExampleReaction (1)• Relevance, importance and intent to use on the job

Learning (2)• Successful application of 5 self-coaching skills

• Can create and sustain motivational environment

On-the-Job Application (3)• Effectively, continuously apply 5 self-coaching skills

• Create and sustain motivational work environment

Business Impact (4)• Reduce % Product Waste and Rework

• Increase Work Engagement

ROI (5): 15% Target ROI

PRO

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Leadership Development Example

Reaction (1)• Reaction questionnaires taken at the end of each of seven sessionsLearning (2)• Pre- and post program skill self-assessment profiles• Facilitator assessment of participant discussions, responses to

questions, and completed assignments during the program• Utrecht Work Engagement Scale at program start, middle and endOn-the-Job Application (3)• Skill self-assessment profiles (3-months)• Utrecht Work Engagement Scale (3-months)Business Impact (4)• Percent Product Waste and Rework• Utrecht Work Engagement Scale (6-months)

DATA

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Leadership Development ExampleAN

ALYS

ISPL

ANData Items Isolation of Effects Monetary

ConversionPercent Waste Trend analysis

Participant and management estimates

Percentage of waste times $245,000

Percent Rework Trend analysis

Participant and management estimates

Percentage of rework times $35,000

Work Engagement Control Group Not converted

Leadership Development Example

RESU

LTS

Reaction (1)• Content relevance (4.16/5.0, 4.0)• Importance (4.07/5.0, 4.0) • Intent to use (4.23/5.0)Learning (2)• Pre program skill self-assessment profile mean (105.0/125)• Post program skill self-assessment profile mean (107.6/125)• Utrecht Work Engagement Scale: Test group higher than control

group by the end of the 90-day learning interventionOn-the-Job Application (3)• Skill self-assessment profile mean (112.6/125) at 3-months• Utrecht Work Engagement Scale: Test group higher than

control

Leadership Development Example

RESU

LTS

Business Impact (4)• $367,500 Projected Trend - $119,350 Post Average = $248,150 per month • $248,150 X 12 = $2,977,800 per year less cost for Waste and Rework• 0.50 Impact Estimate X 0.85 Confidence X $2,977,800 = $1,265,565ROI (5)• Net Program Benefit/Program Costs X 100• ($1,265,565 - $253,761)/$253,761 = 3.99 X 100 = 399%

Intangibles• Increased Work Engagement• Greater Employee Satisfaction• Improved Teamwork and Communications • Better Decision-making

Additional Resources• Center for Creative Leadership: Podcasts (

http://insights.ccl.org/?topic&post_type=multimedia&multimedia-type=podcast).

• DDI Resources: Leadership Development Articles (http://www.ddiworld.com/resources/leadership-development-articles).

• Greenleaf Center for Servant Leadership (http://www.greenleaf.org/).

• Harvard Business Review Leadership Development Topics (https://hbr.org/topic/leadership-development).

• Jim Collins: Leadership Articles (http://www.jimcollins.com/article_topics/articles-leadership.html).

• Ken Blanchard Companies (http://www.kenblanchard.com/Leading-Research).

• TED: Leadership Topics (https://www.ted.com/topics/leadership).

• The Conference Board (https://www.conference-board.org/).

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Additional Resources• Measuring ROI in Learning & Development: Case Studies from Global

Organizations. Editors: Patricia Pulliam Phillips, Ph.D. and Jack J. Phillips, Ph.D. ASTD Press, Alexandria, VA , 2012 (http://www.roiinstitute.net/product/measuring-roi-in-learning-and-development-case-studies-from-global-organizations/).

• Measuring the Success of Coaching. Patricia Pulliam Phillips, Jack J. Phillips, and Lisa A. Edwards, ASTD Press, Alexandria, VA, 2012 (http://www.roiinstitute.net/product/measuring-the-success-of-coaching-a-step-by-step-guide-for-measuring-roi/).

• Measuring the Success of Leadership Development. Patricia Pulliam Phillips, Jack J. Phillips, and Rebecca Ray, ASTD Press, Alexandria, VA, 2015 (http://www.roiinstitute.net/product/measuring-the-success-of-leadership-development/).

• The Savvy Manager: 5 skills that Drive Optimal Performance. Jane R. Flagello, Ph.D. and Sandra B. Dugas, Ph.D. ASTD Press, Alexandria, VA, 2009 (http://www.amazon.com/The-Savvy-Manager-Optimal-Performance/dp/1562865323).

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Conclusion• Purpose of this Discussion• Cost of Leadership• Core Leadership Assumptions• Working Definitions• Issues Impacting Leadership Effectiveness• Leadership Development Example• Additional Resources

Leadership Development

and Your Business

John Kmiec, Ph.D., CRPInstructional Systems Design ConsultantSAIC Training and Simulation Service LineJohn.J.Kmiec.Jr@saic.com | 228.365.2559