The ROI of leadership development - when to spend and what to avoid
Updated: Oct 8
Not all funds spent on leadership development have a good ROI.
(I say this as someone who feels strongly that - in a world of AI - human and relational skills are critically important: leading high-performing teams who don't burn out, moving people toward a common goal, modelling productive conflict, and leading change, after change .....)
Right now, many leaders are budgeting for next year - or thinking about how to use this year's budget before it's gone forever.
If you remember one thing, please remember: different leadership and team challenges need different fixes. Training, team-building, 1:1 vs team coaching and facilitation solve different problems. A lot of wasted $$$ comes from choosing one solution without a clear understanding of what is going on beneath the surface.
Below are my thoughts about various leadership development and team investments - when they can be effective and what to watch out for.
Whichever direction you go in, there are a few things that separate strong ROI from a wasted investment:
There is a clear link between business priorities and the change you are driving, PLUS a way to measure the change → examples are: fewer issues being escalated to senior leaders, decisions being made faster, historical conflict being worked through.
There is an executive sponsor who believes in the work, and who keeps the team accountable to the desired change (linking the investment to performance assessments, promotion opportunities etc.)
The work is not treated as a one-off but rather an investment in longer-term, transformational change → the organization commits to re-connect to the work, evaluate changes, and make necessary adjustments on an ongoing basis (ie. at the end of a program, in 3 months, 1 year etc.)
The provider has relevant background and credentials: industry experience, the level of leadership positions they have held, and credentials such as International Coaching Federation (ICF) certification are all differentiators.
Good luck with your budgeting season.
If it helps to talk through what your team is facing, which solutions fit and how to demonstrate ROI, let's talk: megan@meganmcallister.ca
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