You know all the standard economic measures of business; return on investment (ROI), Return on Sales (ROS), return on capital employed (ROCE) and all the others. But you probably have never calculated your return on leadership (ROL). I am certain of that because the metric doesn’t exist. But that doesn’t mean you should not be evaluating and analyzing the ROL of your people.
The concept is simple. You have an employee in a leadership position. Call them a manager. This manager gets a salary and is responsible for certain assets in your company. The ROL analysis makes us look at the contribution of this manager to the overall organization. The traditional manager evaluation focuses a few very finite metrics like profit, production, or sales. These should be part of your ROL calculation but the manager does more than this and their contribution and impact extends far beyond these traditional metrics.
Ideally, your performance evaluation system enables you to consider these ROL implications when evaluating a manager. The reality all too often is that the performance evaluation system is broken. Evaluations are not done, are done incorrectly, and when they are done they focus on the easy stuff like “did you make money for us last year.”
Your ability to think about and talk about the ROL of a manager will help them become a leader in your organization. Notice, we are not calling this return on management. We are looking at the skills of leadership because we recognize the exponential power that leaders have in our organizations and we will only develop this capability if we think about the return on leadership of our supervisory personnel.
Wally Adamchik is President of FireStarter Speaking and Consulting. Visit the website at www.beaFireStarter.com. He can be reached at 919-673-9499 or wally@beaFireStarter.com.
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