DEVELOPING LEADERS

TRANSFORMING TEAMS

Management Development:

What’s in it for the Business?

Terry Hodgetts Paul Butler Martin Field Centre for Executive Development

Before we begin…

Which of the following best summarises your current approach to evaluating the impact of major investments in management development?

A. We agree KPIs up front with senior sponsors and executives and report back on them.

B. We rely on feedback from participants.

C. It’s hard, and varies from project to project

D. You’re kidding, right?

Agenda

• A brief overview of learning evaluation in the context of executive development

• Examples of impact delivered through programme design:

•Focusing on specific business issues

•Engaging high potential candidates in the process

•Integrating self-directed project work

• One way of evaluating the financial impact

• Conclusions and Questions

Kirkpatrick (Phillips) Model

Level 5 - ROI Measure the business value of changes

Does the value of the results exceed programme cost?

• How is the organisation contributing to clients and society?

Societal

• Can we identify organisational benefits?

Organisational

• Are newly acquired knowledge and skills being applied?

Application

• Individual/group learning outcomes met? (Not necessarily training!)

Acquisition

• Includes learner satisfaction and organisational factors

Inputs and Processes

Kaufman, Keller & Watkins (1995)

Brinkerhoff (1988)

Stage 1 Goal Setting

Stage 2 Programme

Design

Stage 3 Programme

Implementation

Stage 4 Immediate Outcomes

Stage 5 Intermediate Outcomes

Stage 6 Impacts and

Worth

Challenges

Formal

Social

Informal

Additional Challenges

Customised Executive Development is not an “event”.

Customisation means there is no “standard package”.

…which means that multiple iterations and improvements are less likely.

So: How do we Demonstrate Impact?

Image courtesy of samiblue at FreeDigitalPhotos.net

A question about stakeholders

When developing a management development solution for your organisation, how involved are each of the following stakeholders?

Stakeholder Level of Involvement?

Senior managers/executives/board a. High b. Med c. Low d. None

Key Sponsor a. High b. Med c. Low d. None

HR/L&D a. High b. Med c. Low d. None

Participant a. High b. Med c. Low d. None

Line manager of participant a. High b. Med c. Low d. None

Case 1: Self-Directed Projects

• The client is a major global player in the automotive sector.

• The Programme was for middle and senior managers across Europe.

• The opportunity to achieve a University Award was seen as a key benefit for participants

• Solution: Aston Certificate and Diploma in Management, with “top” participants sponsored onto the Aston Online MBA Programme

High Level Certificate Content

Marketing Management • Marketing strategy and planning • External and internal analysis • Selling (buying) v marketing • Market segmentation and positioning • Relationship marketing

Operational Excellence • Best practice models • Processes, measurements and

control • Continuous improvement • Issue identification

People Management • People in organisations • Structure, groups and teams • Leadership and motivation • Performance management • Change management

Strategy • Strategic planning and tools • Strategic choices • Future capability requirements • Implementing the strategy

• Key financial terms and concepts • Shareholders’ view of financial performance • Key management reports • Cost & working capital management • Acquisitions and capital expenditure

Financial Management

Work Based Project • Identified by the individual, sponsored by their manager or other executive. • Applies tools and models covered on the programme

Results So Far

• 26 Projects submitted covering a range of areas (production, marketing, business improvement, strategy, client relationships, HRM, etc.)

• Follow-up is on-going. Some projects have been implemented, some remain recommendations at this stage.

• Many potential impacts are highly significant (e.g. identifying the key CSFs to ensure that plant-level Kaizen activities are successful), but have yet to bear fruit

• Conservative estimated savings so far of €800,000 per annum based on implemented project recommendations.

• Over 30% of participants promoted to date, and retention levels viewed as encouraging.

• The client is a is one of Europe’s leading manufacturers of household disposables using advanced polymer manufacturing techniques

• The Programme is to support the companies ‘developing leaders’ strategic objectives for potential senior leaders from its global operations in the UK, Europe, Asia and the US.

• The main objectives for the Programme are: to ensure that the participants develop an understanding of their organisation’s strategy to enable participants to fully appreciate their role in successfully executing the strategy to enable participants to engage in helping to develop the strategy in future years

• Programme KPI is to enable the participants to successfully apply for senior roles in the near term

• Solution: Three Module Programme over a 6 month period delivered at ABS

Case 2: Designing-in Business Improvement via Diagnosis and Faculty Selection

Note: The opportunity for face to face communication was also seen as a key benefit

Case 2: High Level Programme Content

Module 1: Strategy i. What is Strategy & Issues in Setting Strategy ii. Analysing the Business Environment- Products

& Markets view of Strategy iii. Bottom Up Strategy iv. Competitive Strategies v. Value chains and Profit Zones vi. Growth Strategy

Module 2: Leadership & High Performance Teams i. Receptivity to Change ii. Managing and Leading High Performance Teams a. Having a real team b. Understanding group processes that enhance/hinder effective team working c. Effective relationship-based leadership

Pre-Programme Diagnosis i. Receptivity to Change Audit (carried out across all sites with 94 respondents) ii. Leadership survey

Note: The results of these were used to inform content, faculty selection and delivery of Module 2

Module 3: Commercial Acumen i. a. understanding financial information ii. b. cash versus profit iii. c. project appraisal

Note: Key sessions involved company CFO

Case 2: Results So Far

• From the first cohort of 20 participants through the Programme April to October 2012, 12 have successfully been promoted into more senior roles

• Receptivity to Change Audit has resulted in a further specific local (Asia) development programme to resolve issues identified

• Second cohort commenced May 2013

Case 3: Engaging Participants in an Iterative Process

• The client is one of the leading expatriate health insurers in the world

• The target participant group was for senior managers reporting into Directors of the Leadership Team

• To grow the cadre of ‘directors in waiting’ to be able to perform successfully as business leaders at the next level

• Solution: A programme that combines individual need with client critical leadership requirements to embed and improve actual effectiveness in the workplace.

Case 3: High Level Programme Content

Contracting Calls

360

Portal Content (Slidecast / Webinar)

Pre-Programme Questionnaire

IDP’s

Post Programme

Questionnaire

Contracting to Action Calls

Continuing Portal

Discussions in ‘Community of

Practice’

Strategic Management

Leading with

Emotion

Strategy in

Practice

Co-Coaching Triad/Dyad Support

Line Manager Mentoring

Portal ‘Community of Practice’

Wrappers

Case 3: Results so far

• Due to the continuous consultation process, the programme evolved to guarantee the relevance of the content both to individual and organisational need

• The encouragement for immediate application was evidenced through the active use of the tools and techniques learnt. Participants reported the success of Proposals subsequently submitted.

• Over 40% of the participants have taken on new roles and gained increased responsibilities post programme.

• 3 Major issues challenging the client organisation were identified by the participants for the Final module. One was worked on in depth using their new skills and recommendations presented to the Leadership Team.

A question about stakeholders

When developing a management development solution for your organisation, how involved are each of the following stakeholders?

Stakeholder Level of Involvement?

Senior managers/executives/board a. High b. Med c. Low d. None

Key Sponsor a. High b. Med c. Low d. None

HR/L&D a. High b. Med c. Low d. None

Participant a. High b. Med c. Low d. None

Line manager of participant a. High b. Med c. Low d. None

A question about stakeholders

When developing a management development solution for your organisation, how involved are each of the following stakeholders?

Stakeholder Level of Involvement?

Senior managers/executives/board a. High b. Med c. Low d. None

Key Sponsor a. High b. Med c. Low d. None

HR/L&D a. High b. Med c. Low d. None

Participant a. High b. Med c. Low d. None

Line manager of participant a. High b. Med c. Low d. None

Example ROI Calculation

A real life client case identified the following programme benefits:

• Process improvements allowing for staff savings via natural wastage of £40,000 per annum, and materials savings of £80,000 (tool changes, down time and wastage)

• Improvements to purchasing and negotiation saving £290,000 over a full year

• Applying strategic planning techniques to the threat of a new entrant protecting an £80m revenue stream at 50% contribution.

ROI of savings

Cost of Delivery, inc. accommodation & travel

£130,000

Staff costs, assume 30 employees, 10 days at £60,000pa

£80,000

Total Costs £210000

Full Year Savings:

Process Improvements £120,000

Purchasing & Negotiation £290,000

£410,000

Benefit – Cost Cost

ROI =

410-210 210

= 95%

Assume 10% of revenue stream at risk £8,000,000

Assume 10% of protection due to programme

£800,000

Contribution at 50% £400,000

810-210 210

= 286%

Stakeholder Issues

Sponsors/Project Owners: Are taking a risk. Their credibility is on the line.

Senior Managers: Want a payback for their investment. Value added is essential to the decision.

Participants: Have varied needs: career progression, confidence, “badge of honour”/”rite of passage”, networks.

Faculty: Want their research shared and tested, want their work to have practical benefit. (“We’re a business school, not a theoretical physics department”)

Learning Logbook Synthesis

Content: • Concepts • Tools • Models • Frameworks

Confidence: What have I learned?

Conviction: What will I apply?

End of day

End of module

Evaluation: Capture Key Learning as a cohort

Eight Steps to Return on Investment

3. Participant Objectives

Challenges

8. Measurable ROI

1. Client Strategy

2. Programme Objectives

4. Pre-Programme Assessment and Contract

Participants

6. Confidence

5. Programme Delivery

Syntheses

7. Competency

Application

Benefits

Stakeholders

Summary

We would argue that “traditional” approaches measuring the impact of learning are not well suited to customised executive development programmes

The combination of formal, informal and social processes is more akin to a change programme than a development programme

A combination of determined focus on the design, and extensive work with stakeholders can identify credible and robust indicators of programme impact

In some cases, simple investment appraisal tools can be applied to specify programme value – but that value is far greater in reality.

Contact Us

Terry Hodgetts t.hodgetts@aston.ac.uk Paul Butler p.butler@aston.ac.uk Martin Field m.d.field@aston.ac.uk

About the Centre for Executive Development

Organisations are more complex and sensitive to global issues than ever. Today’s business leaders need to think – and act – differently.

Which is where the Centre for Executive Development at Aston Business School comes in. We work with you to create effective, tailored executive development initiatives to raise the capability of your leaders. These are designed to help your executives think more clearly and creatively, inspiring them to lift your organisation to greater success.

Our goal is to develop your people – individually and collectively – and to equip them with all they need to make your strategy work.

For fuller information, please go to: http://www1.aston.ac.uk/aston-business-

school/executive-development/

About Aston Business School Aston Business School brings a 60 year track record of successfully devising and delivering globally relevant business education.

Our peer-tested fresh insights spring from what the 2008 Research Assessment Exercise (RAE) judged to be ‘world leading’ and ‘internationally excellent’ research.

Our standing as one of the top 1% of business schools in the world, one of a very few to hold triple accreditation from EQUIS, AMBA and AACSB guarantees relevance, pertinence and quality.

Aston Business School has the highest accreditation possible by EQUIS, the international quality accreditation body for high performing business schools.

EQUIS attaches particular importance to the creation of an effective learning environment that favours the development of students’ managerial and entrepreneurial skills, and fosters their sense of global responsibility.

For further information, please go to: http://www1.aston.ac.uk/aston-

business-school

About Aston Business School