Business Strategy Meets Talent Strategy: Benefits of Metrics-Driven Leadership Development

A group of five professionals seated around a conference table discuss business metrics, perhaps including the benefits of metrics-driven leadership development programs, such as enhanced team performance. A couple of laptops are atop the conference table, along with a mess of papers. The professionals are all wearing business attire. Two of the professionals in the foreground are gesturing at a piece of paper displaying pie charts.

In the past, product and service delivery were expressed in abstract terms like “as soon as we can” or “the best we can.” Gradually, time of product and service delivery became metrics driven. Yet many organizational functions — specifically those guided by people and so-called “soft skills” — were still not considered to be measurable.

Leadership development, for example, was not easy to quantify because no one could be sure if the methods were actually effective, or if they simply “made sense” or were “thought provoking.” Metrics-driven leadership development makes the soft skills that are integral to organizational success measurable by tying them to critical business objectives.

Metrics-driven leadership development is similar to metrics-driven waste reduction, metrics-driven capital investment and metrics-driven supply chain management. These and other business functions have the following in common:

  1. The best competitors will be using metrics to optimize them.
  2. Customers willing to pay a premium expect continuous improvement in all of them.
  3. Leaders and employees want to be assured that tomorrow will be better than today.
  4. Investors expect that leader effectiveness will be guided by processes that are just as disciplined as other major functions of the organization.

The quality revolution was inspired by defining quality more specifically, namely “what the customer expects and is willing to pay for.” If you deliver packages worldwide, you have a wealth of information about the locations and speed of transport of those packages, and your customers’ expectations are shaped by this knowledge.

Similarly, determining which leadership development metrics to track requires consideration of what makes a successful leader. In the past, leadership was defined as “those in power.” A definition of leadership at the heart of metrics-driven development is “the ability to build and sustain a team that succeeds in the marketplace.” Leadership development needs to be measured by a leader’s ability to enhance the effectiveness of the team at achieving low turnover, recruiting with ease, and improving the organization’s position in the market.

Team Performance: A Key Leadership Development Metric

A specific focus on team performance needs to be woven into every step of the leadership development process. When an organization implements a leadership development program, the decision-makers’ specific market expectations should be a central focus, both for those providing the leadership development and for participants. Too often, leaders see the development process as the next step in their individual journeys, without seeing the implications for their teams. It’s too easy to focus on whether the process was personally fulfilling, rather than on improved outcomes for team performance. But it’s team performance that affects an organization’s ability to achieve its goals in the market — and achieving these goals is the chief benefit of a metrics-driven leadership development process.

So, how can your organization ensure that a leadership development program will be successful? The best leadership development processes incorporate feedback loops. Organizations often say that they make decisions using data, but there is no feedback loop to assess the value of the data. In contrast, metrics-driven decision-makers use the feedback loops to learn about which aspects of the leader development process helped achieve the organization’s goals. Focusing on team performance allows the organization to shift from “This leadership development process looks good,” to “We can detect the impact of this process on our teams’ performance.”

This blog post was authored by James M. Fico, PhD, a member of the Hogan Coaching Network.