Estimating Return on Leadership Development Investment
Document Type
Article
Department or Administrative Unit
Management
Publication Date
8-2010
Abstract
When making capital investment decisions organizational leaders are trained to consider the financial return on investment. Yet, the same expectation typically does not exist for investments in leadership training. We suggest that decisions regarding leadership training and development ought to use a similar approach as the process leads to organizations incurring cost for an anticipated benefit, like any other investment. In the current paper, we describe how to estimate the return on leadership development investment (RODI) and the implications for measuring organizational effectiveness from such analyses. Using different guiding assumptions, scenarios, length of the intervention, and level of management participating in the leader development program, the expected return on investment from leadership development interventions ranged from a low negative RODI to over 200%.
Recommended Citation
Avolio, B.J., Avey, J.B. & Quisenberry, D. (2010). Estimating return on leadership development investment. The Leadership Quarterly 21(4), 633-644. DOI: 10.1016/j.leaqua.2010.06.006
Journal
Leadership Quarterly
Rights
Copyright © 2010 Elsevier Inc. All rights reserved.
Comments
This article was originally published in The Leadership Quarterly. The full-text article from the publisher can be found here.
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