Does Leadership Training Make Good Cents?

Kenneth Nowack, Ph.D.


Does Leadership Training Make Good Cents?

A fairly recent State of the Industry Report by the American Society for Training & Development (ASTD) estimates that companies in the US spent over $125 billion on employee learning and development in 2010. That figure includes direct costs such as salaries for learning professionals, administration, outsourcing activities and other non-salary delivery costs. The estimate is based on the average U.S. organization’s per-employee training expenditure of $1,083.00 multiplied by the number of full-time workers in the U.S., which ASTD puts at 119.7 million.

Marshall Goldsmith reviewed how well 86,000 leadership training participants actually learned from the workshop experience. He asked the leaders attending the training programs if they intended to go back to their jobs and apply what they had learned. Nearly 100 percent said yes but a year later when Marshall asked direct reports to confirm that these leaders had applied the lessons on the job, 70 percent reported that they had and 30 percent who said their bosses did absolutely nothing. When leaders did little or no follow-up with their direct reports (e.g., asking for additional feedback, sharing information about what skills they were trying to develop further) there was little or no perceived change in the leaders’ effectiveness. His results were consistent across all the companies he studied.

A recent illuminating study supporting the challenge of training transfer and ROI comes from by Paul Taylor and colleagues who conducted a meta-analysis of 107 studies on the effects of management training on training transfer based on ratings of leaders’ on-the-job performance and behavior viewed by their bosses, direct reports and colleagues (Taylor, P., Russ-Eft, D. & Taylor, H. (2009). Transfer of management training from alternative perspectives. Journal of Applied Psychology, 94, 104-121).

In all analyses they conducted, self-ratings were terribly inflated relative to others who provided ratings. When training was focused on improving general management skills, the effect size (Note: small effect size is about .2, moderate about .5 and large about .8 or higher) for each of the rater groups was Self (.72), Boss (.53), Peers (.33) and direct reports (.11). For training focused on just goal setting and performance appraisal skills the effect size was Self (1.55), Boss (no studies), Peers (no studies) and direct reports (.33).

In a special analysis of 14 studies that had ratings from the participant, his/her manager, direct reports and peers found the following effect sizes for training focusing on enhancing interpersonal skills:

  • Self Ratings .50
  • Boss Ratings .33
  • Peer Ratings .34
  • Direct Report Ratings .04

As the authors point out, “Our most surprising–and disconcerting– finding was the relatively small average effect sizes for the transfer of interpersonal skills training, the predominant management training topic, derived from subordinates’ ratings.”

They were being liberal to suggest that the effect size they found in direct reports (.04) could even be considered “relatively small.” What this finding really suggests is that direct reports really didn’t see any meaningful changes in interpersonally oriented leadership behavior in one of the most common reasons for providing leadership training. Direct reports seemed to observe some changes when the focus of training was based on goal setting and performance appraisal but hardly any when it was focused on “general management skills.”

Ok, at least we can say that the use of self-ratings in evaluation of leadership training transfer may be a bit self-inflated. If you want to argue that training is actually resulting in new behaviors back on the job you would have to really convince me that direct reports don’t really have a great perspective about leadership practices of their bosses. As they say, “people today don’t leave organizations they leave bad bosses.” Minimally, as Goldsmith points out, leaders who participate in training programs need to follow-up with their direct reports to help them understand what new behaviors they are trying to develop further and to seek ongoing feedback about their progress.

How Can You Increase the Potency of Leadership Training as an Intervention?

Practice Under Pressure Makes Perfect
Essentially, training is intended to help people develop new habits and enhance effectiveness in specific skills. In order to do so, repetition is important. Also, it is important to allow time to develop and integrate the new habit in one’s daily routine. A week long leadership program is unlikely to lead to the formation of new habits. Initiating behavior change is hard and sustaining it over time is even more challenging. Encourage leaders to practice new behaviors back on the job–under the pressure situations they face every day.

Consider Different Learning Styles
In my research I have seen hundreds of people read books and learn nothing. Not everyone learns the same way. Consider blended learning approaches to ensure that everyone has an equal opportunity reflect, learn and apply information and skills.

Avoid Case Study Overload
Leadership development that is predominantly using a case study approach may stimulate problem solving and analysis but it certainly won’t teach leadership skills. Leadership development is about enhancing specific skills and behaviors—you can do case studies all day and not be more competent in what leaders actually are required to do all day.

Evaluate Your Training Program
It’s great that the leadership participants liked the facilitator and material. More important is whether anyone notices actual behavior change after the leader leaves the training. If you have to use “happy face” evaluations, at least use a “post-then” approach to enhance the validity of your subjective evaluations. Never heard of “post-then” evaluations? It’s a way to evaluate self-perceived changes in behavior controlling for the fact that we can’t accurately rate our knowledge and skills until after a training program is over (response shift bias).

Hold Managers Accountable to be a Coach
If the participant’s manager isn’t involved in the leadership initiative then you have a weak program. Managers of program participants minimally need to share the purpose and goals of the program, clarify expectations and hold the participant accountable to put to together a learning development plan to apply and practice one or more skills taught in the program. Ideally, teaching leaders to become better performance coaches will also facilitate the impact of both internal and external training programs as bosses can recognize and reinforce new behaviors being practiced back on the job when the program is over.

Seek Mentoring and Coaching for Program Participants
Peer coaching and/or mentoring can be incredibly valuable to amplify and accelerate learning from leadership development efforts. Assigning a peer coach from the program or organizational mentor for each participant can be useful to continue skill practice and discussion outside of the leadership program.

Provide Actual Organizational Problems as Projects
Experience is the best teacher. Provide actual organizational problems for leaders to solve in small or large groups as part of your leadership development effort. The transfer of learning is stronger than abstract concepts or case studies so commonly used in most leadership training programs.

Help Executives See Themselves Accurately
We have published research supporting the concept that most leaders have inflated views of their strengths (Nowack, K. (2010). Leveraging Multirater Feedback to Facilitate Successful Behavioral Change. Consulting Psychology Journal: Practice and Research 61, 280-297). Incorporate multi-rater or 360 degree feedback assessments in your leadership development efforts to help leaders compare self-perceptions to those of other key internal and external stakeholders. Emphasize the strengths of leaders and encourage behavioral action plans following feedback. Feedback as we have seen is a necessary, but not sufficient, condition for behavior change. Hopefully, 360 feedback will at least lead to greater self-insight and awareness and when things go ideally we can expect commitment to deliberate practice resulting in increased effectiveness and performance. Evaluate the behavior that actually changes over time to ensure that insight gets translated into actual effectiveness.

Focus on Leader Behavior and Not Leadership Per Se
Daniel Goleman suggests that 50% to 70% of the culture of a team or organization is directly attributed to the leader’s behavior. Our own research suggests that leaders play the strongest role in creating a psychologically healthy climate (Nowack, K. (2006). Emotional intelligence: Leaders Make a Difference. HR Trends, 17, 40-42). Focus on behaviors that can be practiced deliberately to enhance effectiveness.

Keep the relative impact of this relatively weak force intervention of leadership training interventions in mind the next time vendors try to sell you solutions for the wrong problem or suggest they can convert competent jerks into lovable stars.

As Albert Einstein once said, “Education is what remains after one has forgotten everything he learned in school“….Be well…