Historically, any formula on a Return on Investment (ROI) is defined in monetary terms. How do we measure or evaluate the efficiency of an executive learning set?
For Health executives new to their positions, this is relatively easy to measure. ROI tends to reflect improvements in the depth and breadth of leadership and technical competencies arising from the sets.
As a Westpac Institutional banker, I applied ROI with the associated metric of Net Present Value (NPV). This accounts for the difference in the value of money over time and is important to long standing executives. For experienced executives, I believe the ROI comes from engaging with peers outside the boundaries of their own health network and state. Engaging with a range of professionals from New Zealand and the Australian states can lead to diversified thinking and a greater world view.
There are often similar problems across the Tasman and indeed in many developed nations. However, the solutions can be vastly different. Every organisation has different cultures, policies, infrastructure, priorities, risk management and many other factors impacting decision making.
When in-house committees meet for prolonged periods there is a potential for a “group think” with the same mindset applying to problem solving. There are huge benefits to be gained by drawing from others’ experience and looking at the same problem from different angles.
The key question for everyone in an executive learning set is:
How can I increase the breadth and depth of my own leadership competencies for the benefit of the organisation?
The topics are more about the “How” rather than the “what” needs to be done
The ROI of executive learning sets can be identified by considering the common topics for discussion. Clearly, there are many and they are varied. Most sets would discuss things such as:
- Meeting KPI’s, financial efficiency, and their risk management.
- Planning complexities including strategic, business, operational, clinical, capital works, workforce, quality, patient safety and special projects.
- Improvements in culture and staff engagement.
- Challenging relationships, partnerships, teamwork undertaking transformational change.
- Increasing leadership capacity while undertaking a major new project, such as a capital works program.
The leadership debate around the topics is not so much what needs to be done but how. Set members are often specific about the changes they want to make. Their aim is to test and verify current thinking.
For me, one of the most important topics that I encourage in all my sets is to discuss issues when things go wrong. When things don’t work, it is critical not only to evaluate from a quality improvement point of view but also as a personal growth experience. This is something we need much more of in health. Key questions move from was the strategy correct? What could I have done differently? How did I deal with my emotions?
During peak stress, everyone moves into the “Flight or Fight” response.
[pullquote]During peak stress, everyone moves into the “Flight or Fight” response.[/pullquote]
This is an autonomic body response that we have little control over. The blood flow restricts to our vital organs. The creative side of the brain shuts down. This is why when we are in Fight or Flight mode, we often go backward and go into old habits and ways of reacting. These may be the exact behaviour we are trying to change. Our body responds in a way that makes it very difficult to be creative or innovative no matter how hard we try. Everyone needs to understand how they react in times of acute stress. It requires courage to express areas of self doubt in the way you behaved. We need to talk about these issues and the learning set is often the only place with the level of trust that allows this.
Key benefits of Executive learning sets that we need to talk about openly
A question everyone on learning sets can ask is:
What kind of personal insights will make me a better person?
You can understand the changes that are needed in yourself through participating in learning sets by:
- Having your behaviours challenged in a safe and secure environment. How aware are you of your own personal biases? For example, someone with a finance degree will usually analyse a problem differently from a human resource manager or a clinician.
- Experimenting with new behaviours and evaluating your behaviour over different discussions with set members. Trying a new behaviour with set members is a lot easier than trying the new behaviour when working to problem solve operationally with your work team.
- Being able to express your vulnerability in a trusting environment. These can be professional, personal, acute or chronic.
- Simply being reminded to improve your own health and wellbeing.
The basic flaw with ROI formulas
There is no set formula in calculating ROI. It is based on what we include as a return and cost. Those of us who went to the European Health Design congress in London in June heard papers on ROI extending to measure the social and environmental value. The technical side of ROI is being challenged.
I see two major problems with the traditional ROI formula. Firstly, most ROI formula based measures of competencies ignore the most basic of all ROI. That is, the human value in acknowledging and developing self-awareness. Yet this is the fundamental need for changing your own behaviour. For me as a facilitator, the most obvious is that many executives underestimate their strengths because they take them for granted.
Secondly, there is no ROI formula that calculates any losses resulting from the senior executive having a secret desire to leave the organisation. How many of our executives are frustrated by the focus on short term KPI’s and efficiency measures without the time on long term strategy, vision or care? How many are feeling insecure in their positions, being on call 24/7 and have many unanswered questions about their life outside of work? Isn’t Executive retention an important a measure as much as what they do?
In conclusion, when calculating an accurate ROI, all the benefits from the investment need to be included, as well as the opportunity costs of not investing. Every executive knows the challenge of isolation. Who do CEOs or executives talk to confidentially when they’re doing the soul searching?