Organizations today are navigating an unprecedented period of disruption. Digital transformation, artificial intelligence, global economic unrest, cybersecurity, and increased competition create enormous challenges for the most agile and innovative organizations.
How can organizations thrive in such a fast-moving world? By focusing on leadership development.
Organizations have a laser focus on cultivating leaders who can create a compelling strategic direction and engage their teams in making those strategies real.
And they spend a lot to do it: CCL research shows organizations invest an estimated $34 billion annually in leadership development — but only about 1 in 10 executives can tie that investment to a clear business ROI. Why? Because organizations don’t leverage their organizational and leadership data assets to inform their investment decisions.
Smart leadership analytics can de-risk decision-making. By using data to inform investments, executives can place strategic bets that create the leaders, teams, and organizational culture to compete. Analytics can help executives build a roadmap for setting the right priorities, launching the right initiatives, and producing results that get noticed.
Here are four of the many ways an analytics-based approach to people decisions can improve business outcomes:
1. Revive “dead” data to accelerate ROI
Data is king in every organization and every function. Think about the data required to manage your sales pipeline, supply management chains, financial reporting, marketing investments — what function doesn’t use data to uncover opportunities and prioritize initiatives?
Unfortunately, many organizations fail to bring the same rigor to people investments. They gather all types of data on leadership competencies, employee engagement and corporate culture — but then put the information on the shelf or fail to use it effectively. Even worse, the organization may put precious resources into securing and managing that dead data. Not only is the value of the investment lost — but the organization may incur ongoing costs for maintaining that data.
Analytics can breathe new life into this “dead” data by creating predictive models that link leadership and organizational data to business outcomes. These science-based, predictive models can show you how a 1 percent improvement in a certain leadership or organizational behaviors will reduce costs, increase retention, improve customer satisfaction scores and other significant business metrics. Models de-risk decisions so you can determine what leadership and culture investments you should make based on the anticipated payoff.
2. Lift the cover on networks
Hierarchies are dead; networks are in. Sound like a familiar hot topic for your organization? Informal networks are central to business performance. But these seemingly invisible webs can be hard to identify and to influence since they rely on relationships — not formal reporting structures.
Customized diagnostics and analytics can help you uncover these hidden connections and understand how they affect business outcomes. You can determine whether your company networks are diverse and inclusive. You can find the “go-to” people who everyone trusts — learning the secret sauce that keeps them so connected. You can determine whether your leaders span organizational boundaries by leveraging a team of teams.
Data scientists conduct network analytics to create detailed reports and visual representations of your networks. These visual stories equip you to leverage existing connections, create new patterns of connectivity, better align structures to organizational goals, and help individuals in key roles lead more effectively.
3. Emulate productive leaders
The talent war is real. Finding the right talent is expensive — and adding headcount has real consequences for your margins. You can focus on optimizing the productivity of your talent base with smart analytics, modeling both the capabilities of individual leaders and the organizational conditions that lead to higher productivity.
Data scientists can create productivity models by identifying the characteristics of high performing leaders and teams. These characteristics can then be used both to create criteria for selecting new talent and to implement development plans for existing leaders and teams. Analytics can help you deliver the same — or better — results with fewer people.
4. Banish “in-the-dark” planning
Workforce planning has never been more critical. Organizations need highly effective leaders at all levels in order to survive and thrive. But what does “effective” mean in the context of your organization? Do you need digitally savvy leaders? Change champions? Big-picture strategists? Customer-care gurus?
Data scientists can help you pinpoint the precise skills and capabilities you need to accomplish your strategic objectives. You can make smarter decisions about your recruiting program, retention efforts, and leadership pipeline. And you can create new action plans and development initiatives that promote those precise aspects of leadership, culture, and employee experiences your organization needs.
Putting it into Practice
Ready to use an analytics-based approach to guide your leadership development efforts?
Take these steps to get started.
• Does your HR team include data scientists? If not, find a way to get access to those skills either with dedicated roles, using internal resources, or outsourcing. Accurate data and analyses will empower you to make informed decisions — and you will need skilled resources to ensure data and models have high integrity and accuracy.
• Inventory your data and ask how it has been used to drive decisions. Have you linked your people data to specific ROI metrics? Have you collected text data that has never been analyzed? What does your competency, engagement, and coaching data tell you about the strategic challenges your organization must address? A data inventory will help you begin leveraging data to inform both short and long-term decisions.
• Use analytics to think about how you identify and grow high potential employees. Is your 9 box sufficient? Too subjective? A more objective, data-driven approach would use competency and employee engagement data to identify new leaders.
• Use network analytics to understand how teams work together — and whether the team lead optimizes that team’s productivity and joy. Links between members and to the team lead or boss reveals how the team functions — and whether some members are isolated. Diagnostics like CCL’s TeamVantage can reveal whether team dynamics are helping or hindering growth.
Data analytics can help your team make the right moves at the right time, so your people investments won’t be wasted and go unnoticed. You can invest where it matters most and can document your business impact and return on investment.