Training Industry Magazine - July/August 2019 - 35

"exceptional" improvement in the seven
key leadership behaviors included in the
multi-rater survey. There was consistent
corroboration from both direct reports
and managers that these improvement
had indeed taken place.
Level 4: Business impact: Results within
the retail business showed the overall
increase in performance for the trained
group of managers was significantly
higher than the performance increase of
the control group. Using the five metrics
we tracked, there was a 2.1% average
improvement for the trained group
above and beyond the control group. This
became the tangible "benefit" of training
to the business.

New leaders were
adding more value to
the business the sooner
they went through
the training.

Figure 2: What does it cost for each employee to put off new leader
training by...?
...3 months

$2,138

...6 months

$4,276

...12 months

$8,552

participants in the study, but they also
made $4.15 for every $1 spent.
Level 6: Factors
training impact:

that

maximized

The top three factors that were most
effective in maximizing the impact and
ROI of the training were:
* Having an immediate manager who
discussed the training with them and
encouraged them to apply new skills
* Being given the opportunity and extra
time to have coaching conversations
with each of their direct reports
* Quickly identifying and addressing
the resistors to change within
their teams

Level 5: ROI: Benefits of training: Once we
partnered with the finance team to ascertain
what each metric was worth to the business,
we were able to identify and monetize an
impressive benefit of $2,138 per participant.
Costs of training: To calculate the cost
of training, we used a fully loaded cost
calculator to account for every expense
incurred as a result of training. These
included development costs, attendance
costs, participant travel and time away
from job, materials, instructors, etc. The
total fully loaded cost for each participant
was $1,668.
Once both benefits and costs were
calculated, we then plugged these dollar
values into the ROI formula. We were able
to confidently and conservatively say that
the business had an ROI of 29% within just
the first three months post-training and a
final annualized ROI of 415%. This means
that not only did the business recoup
the fully loaded costs of training for the

Conclusion
All too often when L&D offers training
to new leaders, many employees will
procrastinate or postpone attendance,
rationalizing that they can't afford to leave
their roles to participate in training or they
need to stay focused on their metrics.
What we wanted to prove with this case
study was that leaders can't afford not to
attend leadership training and that, the
sooner they go, the sooner they can add
even more value to their organization's
bottom line.
This is exactly what our case study proved:
New leaders were adding more value
to the business the sooner they went
through the training. In fact, by using this
measurement approach and looking at
participants' business benefits three, six
and 12 months post-training, we were able
to show exactly how much performance
advantage was created by attending the
training and, at the same time, how much
could be lost by not attending the training.

By duplicating the same rigorous trained
versus control methodologies and designs
other disciplined researchers might use to
test whether a medicine or drug "works,"
we sought to prove how much training
"worked" on improving job performance.
Medical researchers would call this the
"experimental" group (the ones who get
the new medicine) and the "control" or
"placebo" group (the ones that don't get
the new medicine).
Further, we were able to see how much
would be gained or lost by putting off
taking the "medicine." Results told us
that if managers put off training for
three months, they would lose $2,138 in
improved performance. If they put off
going through training for six months,
they would be losing $4,276 and if they put
off training for a full year after they assume
leadership roles, they could be losing
$8,552 in extra performance. See Figure 2
for a summary of lost performance due to
a lack of training among new leaders.
At a first glance, this might not seem
like much for a company that generates
significant annual revenue - but it's
a very significant finding. When you
consider how many employees are
stepping into new leadership roles across
the enterprise and how many employees
will be influenced every day by these
leaders, the numbers add up. Add to this
the fact that this significant benefit comes
at the relatively small cost of $1,662 per
participant, and it creates a compelling,
and even irrefutable, case for all leaders
to take their prescribed training. To put
it another way, for the benefit of their
organizations, leaders should hurry up
and take their medicine.
Dr. Paul Leone is an author, expert ROI
consultant at Verizon and thought leader in
the industry. Email Paul.

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