One area of my comprehensive exams (for my PhD in Training & Performance Improvement at Capella University) is related to calculating return on investment for training initiatives. I have all the journals, books and websites that I need to answer the question, and I have attended a workshop on ROI led by Jack Phillips. However, I'm curious to get others' opinions on why companies you have worked with do not do an ROI evaluation for their leadership development programs, or put in the positive, in your own experience, what leads a company to choose to invest the time and resources to calculate the ROI?

Thanks so much for your thoughts on this.

The usual suspects for NOT: don't think it is important, can't do it by training or practice,
philosophical outlook, thinks top mangement doesn't care, not my problem, never have needed it before, all evaluations done from a training perspective, nobody expects any financial evaluation from them, poor relationship with numbers folks, not a part of overall strategic planning, reports to human resources, has an eagerness to be on unemployment insurance.

Usual suspects FOR doing: knows language of business is dollars, properly trained, reports to the Ceo or reasonable alternative, anything opposite from above.

Further, ROI is not the only financial measure
by any means. Companies even within the same industry have differen financial measurements/metric etc that are used successfully. What are they and how do they wish it communicated to them ?
Nero

Since you're question focused on Leadership Development programs, I would echo a bit on what Nero had to say for why my past (and current organizations do not do ROI studies). In the order that I believe the reasons for NOT doing them:

1. Don't feel a need to justify. The belief from the owner of the program and the executive sponsors (if they are different), is that these programs inherently work. We don't need to spend a lot of time and money proving to ourselves that providing development opportunities and/or training for leaders is giving us a return.

2. Difficult/not worth the time and effort to study. Included in this is the difficulty of isolating the development program as a contributing element. Sure, maybe leaders that have gone through the program have lower turnover than those that haven't, but how can I prove that they wouldn't have anyway?

Nero -- thank you for your insight on "the usual suspects." Based on your own experience, does any one of these stand out more than the others?

Past B -- I appreciate you taking the time to share your insight on this subject. Hearing from someone else who has "been there" and chosen not to do that (like I have chosen not to, also) is valuable.