The document discusses the importance and costs of leadership development, noting that U.S. companies spend approximately $24.5 billion annually on such programs while facing significant leadership gaps. It outlines key leadership assumptions, definitions, issues affecting effectiveness, and presents an example of a company's leadership development initiative that demonstrated a substantial return on investment. Overall, effective leadership is presented as vital for enhancing employee engagement and organizational performance.

1. Leadership Development
and
Your Business
John Kmiec, Ph.D., CRP
Instructional Systems Design Consultant
SAIC Training and Simulation Service Line
John.J.Kmiec.Jr@saic.com | 228.365.2559

2. Overview
• Purpose of this Discussion
• Cost of Leadership
• Core Leadership Assumptions
• Working Definitions
• Issues Impacting Leadership Effectiveness
• Leadership Development Example
• Additional Resources

3. Purpose
The purpose of this discussion is to examine leadership development,
what it is and what it is not, its costs and benefits, issues impacting its
effectiveness, an example, and additional resources.

4. Cost of Leadership
American companies spend about $24.5 Billion/Year on Leadership
Development programs – 35% of $70 Billion spent on training annually
• 60 percent of all companies cite “leadership gaps” as their top business challenge –
from front-line supervisors to executives
• Global expansion, rapidly expanding technologies, and capability gaps drive
leadership development needs – especially for Millennials
Source: Spending on Corporate Training Soars: Employee Capabilities Now A Priority by Josh
Bersin, 2/04/2014, Forbes Business, www.forbes.com

5. Cost of Leadership
From front-line supervisors to executives, “lousy” bosses, leaders and
managers present a real and present danger to employee engagement,
productivity, and profits.
According to Gallup, employee engagement levels in the United States have
remained stagnant the year 2000.
• 30-percent are Engaged (Involved, Enthusiastic and Committed)
• 50-percent are Not Engaged (Present but Uninspired)
• 20-percent are Actively Disengaged (Outright Saboteurs)
Source: State of the American Workplace: Employee engagement insights for U.S. business
leaders by Gallup, 2013, http://employeeengagement.com/

6. Cost of Leadership
Costs U.S. organizations $450-$550 billion* in lost productivity and
missed opportunities – Annually!
* Source: State of the American Workplace: Employee engagement insights for U.S. business
leaders by Gallup, 2013, http://employeeengagement.com/
• Waste and Rework
• Accidents and Incidents
• Legal Issues (Lawsuits)
• Lagging Innovation
• Lost Productivity
• Declining Sales
• Employee Turnover
• Absenteeism and
Presenteeism
• Higher Health Costs
• Outdated Infrastructure
• Customer Complaints
• Inventory Control Issues
(Theft)
• Lost Business
Opportunities

7. Core Leadership Assumptions
• Leadership is contextual and is influenced by culture.
• Leadership competencies can be learned and developed.
• Leadership development is a lifelong process.
• Leadership does not require a formal position.
• Leadership is inclusive.
• Leadership development is grounded in the awareness of strengths.
• Understanding the civic and global dimensions of leadership is essential.
• Leadership is ethical and is values-driven.
• Leadership directly and profoundly impacts employee engagement, work performance,
business results, and profitability.
Source: Core Leadership Assumptions adapted from Komives, S.R., Lucas, N., & McMahon, T.R. in Exploring
Leadership: For College Students Who Want to Make a Difference (2007). San Francisco: Jossey-Bass
Publishers. George Mason University, 2015, http://masonleads.gmu.edu/.

8. Working Definitions
• Leadership is a process of social influence, which maximizes the efforts of others,
towards the achievement of a goal (Kevin Kruse, Forbes, 2013).
• Followership is the ability to take direction well, to get in line behind a program, to
be part of a team and to deliver on what is expected of you (John McCallum, Ivey
Business Journal, 2013).
• Development: Development prepares people for additional job roles for the long
term; it refers to more personalized, individualized growth experiences, such as a
certification process, job rotation period, coaching or mentoring (Tara Duggan,
Chron, 2015).
• Training is the process by which people are taught critical skills to improve their
performance in the short term. (Tara Duggan, Chron, 2015) .

9. Issues Impacting Leadership Effectiveness
• Failure to provide enough leadership development across multiple levels in the
organization.
• Too many ad hoc, sporadic, or overly compressed frontline manager leadership
development programs that inadequately cover critical responsibilities.
• Failure to build an organizational culture that enables, supports and rewards
positive leadership behaviors.
• Lack of Mentoring and Coaching from Experienced Leaders.
• “Do What I Say, and Not What I Do” – Failure to Lead By Example.
• The “One and Done” Leadership Training Mentality.
• Investing too little too late into developing young leaders.
• Little or No Accountability for the results of leadership development programs.

10. Leadership Development Example
• PolyWrighton manufactures high quality, lightweight plastics used to package
food, beverage and personal care products
• Complex, massive, hazardous machinery used to process tons of toxic, flammable
chemicals under high heat and pressure
• Rigorous hygienic, chemical and environmental safety standards and specifications
leave very little room for error
• Raw materials are expensive and frequently in short supply, making reduction of
product waste and rework imperative
• New owners wanted better operational and financial performance

11. Leadership Development Example
Program Needs
• Product Waste ($245K/1%) and Rework ($35K/1%) costs $272,850/month
($3.27M/year)
• Stressed work environment barrier to Work Engagement
• Immediate managers unskilled and inexperienced
Evaluation Needs
• Effectiveness of learning intervention?
• Increase Work Engagement?
• Reduce Product Waste and Rework?
• Rollout Decision?

12. Leadership Development Example
• Immediate managers play a pivotal role in creating motivational work environments
that positively impact employee satisfaction
• Employee satisfaction is related to work engagement; psychological state
characterized by absorption, dedication, and vigor
• Increased work engagement is associated with improved job performance, business
impact and profitability
• Companies with world-class engagement have 3.9 times the Earnings per Share
growth rate compared with organizations with lower engagement in their same
industry. (Source: http://www.gallup.com)
Performance Ability + Motivation + Opportunity
Training, education
and experience
Confidence (I can) and commitment (I will)
What the organization
provides to employees
=

13. Leadership Development Example
Purpose: To prepare immediate managers to more effectively create and
sustain motivational work environments that positively impact work
engagement and organizational performance.
• 90-Day (7 session) Learning
Intervention based on the 5-Skills of
Savvy Managers
• Focuses on introspection and self-
coaching of the skills for continuous
learning and development
• Blended learning format (classroom,
online, on-the-job skills practice,
journaling, and peer-
review/interaction)
• Test Group (Production Unit) and
Control Group (Maintenance Unit)
research design

14. Leadership Development Example
Reaction (1)
• Relevance, importance and intent to use on the job
Learning (2)
• Successful application of 5 self-coaching skills
• Can create and sustain motivational environment
On-the-Job Application (3)
• Effectively, continuously apply 5 self-coaching skills
• Create and sustain motivational work environment
Business Impact (4)
• Reduce % Product Waste and Rework
• Increase Work Engagement
ROI (5): 15% Target ROI

15. Leadership Development Example
Reaction (1)
• Reaction questionnaires taken at the end of each of seven sessions
Learning (2)
• Pre- and post program skill self-assessment profiles
• Facilitator assessment of participant discussions, responses to
questions, and completed assignments during the program
• Utrecht Work Engagement Scale at program start, middle and end
On-the-Job Application (3)
• Skill self-assessment profiles (3-months)
• Utrecht Work Engagement Scale (3-months)
Business Impact (4)
• Percent Product Waste and Rework
• Utrecht Work Engagement Scale (6-months)

16. Leadership Development Example
Data Items Isolation of Effects
Monetary
Conversion
Percent Waste Trend analysis
Participant and
management estimates
Percentage of waste
times $245,000
Percent Rework Trend analysis
Participant and
management estimates
Percentage of rework
times $35,000
Work Engagement Control Group Not converted

17. Leadership Development Example
Reaction (1)
• Content relevance (4.16/5.0, 4.0)
• Importance (4.07/5.0, 4.0)
• Intent to use (4.23/5.0)
Learning (2)
• Pre program skill self-assessment profile mean (105.0/125)
• Post program skill self-assessment profile mean (107.6/125)
• Utrecht Work Engagement Scale: Test group higher than
control group by the end of the 90-day learning intervention
On-the-Job Application (3)
• Skill self-assessment profile mean (112.6/125) at 3-months
• Utrecht Work Engagement Scale: Test group higher than
control

18. Leadership Development Example
Business Impact (4)
• $367,500 Projected Trend - $119,350 Post Average = $248,150 per month
• $248,150 X 12 = $2,977,800 per year less cost for Waste and Rework
• 0.50 Impact Estimate X 0.85 Confidence X $2,977,800 = $1,265,565
ROI (5)
• Net Program Benefit/Program Costs X 100
• ($1,265,565 - $253,761)/$253,761 = 3.99 X 100 = 399%
Intangibles
• Increased Work Engagement
• Greater Employee Satisfaction
• Improved Teamwork and Communications
• Better Decision-making

19. Additional Resources
• Center for Creative Leadership: Podcasts
(http://insights.ccl.org/?topic&post_type=multimedia&multimedia-type=podcast).
• DDI Resources: Leadership Development Articles
(http://www.ddiworld.com/resources/leadership-development-articles).
• Greenleaf Center for Servant Leadership (http://www.greenleaf.org/).
• Harvard Business Review Leadership Development Topics
(https://hbr.org/topic/leadership-development).
• Jim Collins: Leadership Articles (http://www.jimcollins.com/article_topics/articles-
leadership.html).
• Ken Blanchard Companies (http://www.kenblanchard.com/Leading-Research).
• TED: Leadership Topics (https://www.ted.com/topics/leadership).
• The Conference Board (https://www.conference-board.org/).

20. Additional Resources
• Measuring ROI in Learning & Development: Case Studies from Global
Organizations. Editors: Patricia Pulliam Phillips, Ph.D. and Jack J. Phillips,
Ph.D. ASTD Press, Alexandria, VA , 2012
(http://www.roiinstitute.net/product/measuring-roi-in-learning-and-development-case-
studies-from-global-organizations/).
• Measuring the Success of Coaching. Patricia Pulliam Phillips, Jack J. Phillips,
and Lisa A. Edwards, ASTD Press, Alexandria, VA, 2012
(http://www.roiinstitute.net/product/measuring-the-success-of-coaching-a-step-by-step-guide-
for-measuring-roi/).
• Measuring the Success of Leadership Development. Patricia Pulliam Phillips,
Jack J. Phillips, and Rebecca Ray, ASTD Press, Alexandria, VA, 2015
(http://www.roiinstitute.net/product/measuring-the-success-of-leadership-development/).
• The Savvy Manager: 5 skills that Drive Optimal Performance. Jane R.
Flagello, Ph.D. and Sandra B. Dugas, Ph.D. ASTD Press, Alexandria, VA, 2009
(http://www.amazon.com/The-Savvy-Manager-Optimal-Performance/dp/1562865323).

21. Conclusion
• Purpose of this Discussion
• Cost of Leadership
• Core Leadership Assumptions
• Working Definitions
• Issues Impacting Leadership Effectiveness
• Leadership Development Example
• Additional Resources

22. Leadership Development
and
Your Business
John Kmiec, Ph.D., CRP
Instructional Systems Design Consultant
SAIC Training and Simulation Service Line
John.J.Kmiec.Jr@saic.com | 228.365.2559