Changing the Currency: New Research on How Businesses Calculate the ROI of Executive Development

1. Changing the Currency New Research on How Businesses Calculate the ROI of Executive Development Vistage International November 2012

2. How do businesses measure ROI on executive development efforts? What methods of executive development are most used? What methods are most effective?

3. Who We Talked With… Ulrich Nettesheim , Lecturer, UC Berkeley’s Haas School of Business Steven Stripe , Senior Vice President of Finance, Equifax Katie Rials , Director of Human Capital Development, SCI Companies What We Created… 31-Item Survey August 2012 346 responses representing more than 175 organizations worldwide

4. Some Participant Organizations 4

5. State of Leadership Impactful leadership development directly tied to business performance Financial limitations continue to put competing pressure on development initiatives Collaboration, communication and shared vision are key area of focus

6. State of Executive Development Hybrid Non-Traditional Executive Development Traditional Executive Development

7. Defining Differences Traditional Non-Traditional Leadership Retreats Internal Peer Group Meetings Workshops Regular Cross-functional team meetings E-learning/Online Training Custom-designed development plans Classroom Training Executive Coaching University/Advanced Degree Programs External Peer Group Meetings Off-site Seminars/Speakers Internal Leadership Meetings facilitated by external consultant Rotational Assignments

8. Most Popular Traditional Non-Traditional Leadership Retreats Internal Peer Group Meetings Workshops Regular Cross-functional team meetings Off-site Seminars/Speakers Custom-designed development plans E-learning/Online Training Executive Coaching University/Advanced Degree Programs External Peer Group Meetings Classroom Training Internal Leadership Meetings facilitated by external consultant Rotational Assignments

9. TDO 48% HDO* 52% Traditional vs. Hybrid * Hybrid development organization = those that use four or more peer-based / collaborative (non-traditional) executive development methods annually

10. Changing the Currency Cutting-edge collaborative executive development methods require leaders to examine how they measure success Financial metrics remain important Research revealed additional metrics that help business leaders measure effectiveness

11. New Measures: 5 Key Drivers of ROI

12. HDOs are more aligned to a common vision Q: Please describe how your organization’s approach to executive development affects the alignment between Execs and overall business strategy. (% strongly or somewhat agree) Alignment

13. HDOs are more collaborative Q: How much do you agree/disagree that the following practices related to collaboration are exercised in your organization? (% strongly or somewhat agree) Collaboration

14. HDOs are better at resolving conflict Q: As a whole, how effective is your organization at the following conflict resolution methods? (% very or somewhat effective) Collaboration

15. Executives in HDOs feel more ownership of the strategic direction Q: How much do you agree/disagree that executives at your company feel like they have ownership of the strategic direction of the company? (% strongly or somewhat agree) Execution

16. HDOs make strategic decisions faster Q: How effective is your organization at the following: (% very or somewhat effective) Execution

17. Keys to Increased Retention Leadership Aligned Rewards Systems Culture Development / Growth Retention Research did not uncover any key differences regarding retention among HDOs and TDOs. This could be an area that warrants further research.

18. HDOs have greater bench strength Q: How much do you agree or disagree with your organization’s approach to succession planning? (% strongly or somewhat agree) Succession

19. HDOs achieve better growth rates Q: Please describe the growth rate of your organization’s revenue in the last fiscal year: Growth

20. The Payoff: HDOs Better Positioned for Business Success and Stronger Growth Blended approach – it’s the mix that matters Collaborative methods build the capability of the organization , not just the individual Collaborative, peer-based models drive best results

21. Visit us at www.vistage.com/hci to download the entire research report and for more information on collaborative, peer-based executive development programs

22. World’s Leading Peer Advisory Membership Organization 16,000 Members in 15 Countries Vistage member companies generate nearly $300 billion in annual revenue, employ 1.8 million people worldwide, and outperform their competitors