How to Measure the ROI of a CEO Peer Group

by Mark Stagen July, 9, 2018 Personal Development

How to Measure the ROI of a CEO Peer Group

As organizations have grown in size and complexity—no matter their location, industry, or product lines—the need for exceptional leaders has also increased even as essential leadership competencies have changed. In response, executive development has evolved from classroom-based methods to peer-oriented forums focused on the professional needs of senior leaders.Typically, CEO peer groups and forums bring together a wide-range of leadership talent. Some of these members are successful entrepreneurs guiding small, but successful, startups while others guide firms with billions of dollars in revenues and hundreds of employees. Most peer groups meet once a month and are run by a professional facilitator who moderates discussions and keeps the group focused on leadership development needs. 

Some of the topics CEO peer groups cover include:

  • Strategic thinking methodology
  • Communication skills
  • Goal setting and accountability tactics
  • Collaboration skills

This new, nontraditional leadership development process leverages experiential learning techniques and interactivity tactics. While the ROI of this approach is often difficult to track, there are ways to measure it.

See how one XLN member, Michael Block of WPromote, thinks about the value and ROI of CEO peer groups.

For another perspective, hear what XLN facilitator Matt Habich has to say about the business impacts he’s seen come about as a result of these groups.


5 Key ROI Areas of a CEO Peer Group

There are five key areas to consider when assessing the ROI of a CEO peer group: Execution, Alignment, Collaboration, Retention, and Succession.

1. Execution

Organizations must execute on their strategic plans and achieve the desired goals they have set for themselves. One survey found that 49% of business leaders report a gap between their organization’s ability to articulate a strategy and their effectiveness in executing on those deliverables. Learning to cooperatively create an organizational strategy and then learning how to move it towards execution is one way to see the tangible results of a leadership forum.

2. Alignment

The business units within a company need to be able to work toward the same strategic goals and maintain a line of sight among different leaders and business units. Establishing and supporting alignment among the executive team of an organization is critical to achieving success. Executing effectively on strategy hinges on senior leaders having a clear and concise understanding of direction and goals. A peer group helps them learn ways to build open lines of communication and foster the exchange of ideas and information.

3. Collaboration

Each business unit within a company must be able to operate cohesively and work together to solve problems and capitalize on opportunities. A large body of research supports the positive influence that collaboration can have on business productivity and an organization’s performance. A peer group helps leaders learn how to build and reinforce a culture of collaboration because it gives them the opportunity in a non-critical environment to have and experience uninhibited dialogue among colleagues, how to navigate conflict, and learn conflict resolution skills. Real collaboration is about a virtually limitless exchange of ideas, and a CEO peer group helps leaders to improve their ability to foster these exchanges.

4. Retention

Effective organizations find ways to retain key performers to sustain growth and deliver high quality outcomes. Perhaps the most important measure of leadership development for an organization is how prepared they are in regards to retention and succession planning. A large body of research has determined that high performers in the workplace need the support network, experiences, and development opportunities to grow into tomorrow’s leaders. A CEO peer forum is invaluable for non-Fortune 500 companies because it gives leaders access to this network. This is especially important when smaller companies do not have the internal resources or size to create similar types of internal forums on their own.

5. Succession

In order to carry a strategic plan several years into the future, organizations must have a program in place to identify ready replacements for key positions and build its leadership bench strength. A CEO peer group provides leaders a place where they can develop their skills and ultimately grow their companies. They also provide a path for companies to retain their top talent by providing opportunities for problem solving and professional growth so leaders don’t need to pursue career growth outside the organization.

Quality CEO peer groups help executives make more informed decisions as they develop their skills and share information with other leaders. By gaining new perspectives on their most important challenges, they can adopt and implement innovative solutions that produce better business results.

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