A strong leadership pipeline is critical to the success of any organization. But how do you decide which skills and capabilities to cultivate?
One common strategy is to compare the performance of your leaders to industry-wide norms and then invest in development strategies to close any gaps. Since no two organizations are alike, though, one-size-fits-all solutions seldom make sense. It’s important to understand which gaps really matter to your organization, and where you should invest to produce better outcomes.
One powerful way to develop your own unique recipe for success is to adopt predictive analytics. These analytic solutions have transformed the operational side of businesses around the globe, uncovering previously hidden insights and translating them into an improved return on investment. And they can do the same for your training and development investments. You will have the information you need to make evidence-based decisions, set priorities and determine where to invest your valuable time and resources to optimize your business ROI.
Here are 5 steps to get you started and help you use predictive analytics to make better-informed decisions about leadership.
1. Set Priorities
An important first step is to engage your executive team and other key stakeholders in a discussion of what matters most to your organization. The goal is to determine what “producing better business results” really looks like. Here, capture your most important business challenges, opportunities and strategic priorities. And ask tough questions. Which of your current strategies are working? Which aren’t, and why? Should you focus on increasing customer satisfaction or on reducing turnover? Is it crucial that you double down on efforts to lower operating costs, or should you instead focus on market expansion?
2. Gather Data
Next, define your current state. Gather pertinent data, including the business metrics your organization uses to measure progress in those areas that are most important to success. You’ll also need quantitative and qualitative data about the people side of the equation. Pull together any available data on your culture, employee engagement, leadership behaviors and practices. If there are information gaps, now is the time to conduct new surveys and assessments to fill them.
One important tip: Experts recommend that you combine multiple types of data from multiple sources to get a clear picture of what’s going on at the individual, team and organizational level. And here’s why that matters.
Let’s say you design and manufacture computers and want to reduce your time to market. Leadership assessment data shows your leaders aren’t great at managing poor performers, and you suspect that might be the issue. A new employee experience survey, however, provides a different view. It turns out that your product development and quality assurance teams are operating in silos instead of working in lockstep — creating bottlenecks that are slowing product delivery.
It now becomes clear that managing poor performers is only part of the story. You might also need people initiatives and processes that can help break down barriers and promote cross-functional teamwork.
3. Analyze Links and Gaps
Once organizational priorities are established and data collection is complete, experts can use predictive modeling to identify the precise people factors that help or impede the achievement of your most important business goals. This allows you to paint a picture of which specific leader behaviors and practices are likely to have a quantifiable impact on your organization’s culture, employee experience and — most important — business outcomes. Armed with these insights, you can begin to prioritize your investment decisions.
You likely will end up with a lengthy list of factors that influence outcomes. But don’t try to tackle everything at once. It’s important to narrow down what you find and to focus first on those levers that your analysis shows will produce the greatest quantifiable impact.
Share what you learn with key stakeholders. Ask probing questions that can help you deepen your understanding and clarify the root causes behind the barriers and enablers your analysis identifies. For example, why do employees think their leadership team is ineffective? Why are functional organizations and business units poorly aligned?
4. Take Action
With data-driven intelligence in hand, it’s now time to use what you’ve learned to make better-informed decisions about leadership development. Rather than relying on guesswork or external industry benchmarks, you can now confidently address the specific people factors that are having the greatest impact on your top business goals.
Build an action plan and take evidence-based steps to strengthen leadership, align organizational systems and processes, nurture a culture of engagement, build shared commitment and bring your most important business strategies to life.
5. Assess Impact
Be sure to measure your results. Use the same science-based predictive analytics that helped you design your leadership development solution to see if you’ve moved the needle on your organization’s most important strategic objectives. Were you able to drive higher productivity metrics? Reduce costly turnover? Produce higher levels of customer satisfaction? Reduce time-to-market? Are there steps you can take to fine-tune your approach and produce an even greater impact?
This clear-eyed follow up can help you determine and document your ROI, just as you would with any other strategic investment.
Putting it All Together
What does it look like when you put these five steps into practice and use analytics to drive leadership strategy?
Consider the experiences of RPM, a multinational holding company specializing in manufacturing. The firm’s Specialty Products Group had identified significant new market opportunities. But retention issues, skills deficiencies and a shrinking labor pool were impeding progress.
Executives wondered what steps to take to address these issues and develop the workforce needed to fuel growth. To take the guesswork out of action planning, they gathered data and worked with assessment experts to conduct a predictive analysis and determine which strategies would produce the best outcomes. Results revealed senior leadership, job engagement and organizational engagement were having a strong impact on turnover.
Using what they learned about these impactful leverage points, executives refocused their people investments. First, they launched new talent development initiatives to engage, retain and promote younger workers and to develop skills the organization needed. Next, they designed workshops and action planning tools to achieve strategic alignment and to promote organizational engagement. Finally, they created opportunities for senior leaders to have meaningful dialogue with frontline employees — articulating strategy, promoting transparency, and building confidence and support.
The C-suite executive leading the initiative stated, “Predictive analytics have helped us manage and evaluate our leadership journey and move our businesses forward.”
It’s time to develop your own custom-tailored plan that reflects the uniqueness of your organization and where it wants to go. Determine which investments matter and which don’t. Act on what you learn and assess your outcomes.
When analytics are used to set leadership development priorities, the odds increase that you will make a transformational impact on your most important business strategies.