Nortura invested NOK 12 million in management development over three years. This gave the company projects worth NOK 300 million. Here are five success factors.
Large sums are spent annually on leadership development both in Norway and the rest of the world. Most people consider spending money on skills development for their employees to be a good investment. However, not everyone is able to show what the company and its owners get in return for their efforts.
Cecilie Foss-Sausjord
Business Developer Corporate, BI Norwegian Business School
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Together with BI Norwegian Business School, Nortura has developed a competence program in management, innovation and continuous improvement. The program is designed as a learning journey with seven modules with an interdisciplinary approach. The main goal of the program was to get Nortura employees to implement the company's strategy in their daily work. Espen Skaldehaug, Associate Professor at BI Norwegian Business School, has been responsible for the program.
Nortura employees were exposed to real innovation and/or improvement projects through the program. Participants were required to use research-based theory and practice to solve challenges in the business and present their proposed solutions to senior management. Each employee's individual development and training thus became an integral part of projects that create value for the company.
Nortura invested a total of NOK 12 million in the program over three years. This resulted in projects with a calculated net present value of more than NOK 300 million, i.e. more than 25 times the investment. Several projects have already been implemented. One project alone has given the company a realized value of NOK 13 million per year. In addition, individual skills development and cultural change come as a bonus.
In 2017, EFMD - The Management Development Network named this leadership program one of the best programs developed in collaboration between academia and business in the Executive Development category. EFMD represents one of the largest international networks within management development.
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Five success factors for profitable leadership development
Based on the experience from Nortura, we have identified five factors that can explain the profitability of this management development program:
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Create clear goals based on the company's strategic direction
Outline, in close collaboration with senior management, 3-4 strategic challenges that the company wants to address and explain what these entail. If the leadership development program is to help increase competitiveness, the program must be designed around solving this.
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Work with real change projects
Working on real change projects in the organization creates a better understanding of how the different units of the company interact. By bringing together 2-4 people from different parts of the value chain to work on strategic change projects, "unique" knowledge is spread across the organization. Good projects can be realized in the company and provide value creation that would otherwise not be possible.
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Experiential learning
The change projects are designed in accordance with design thinking and lean innovation principles. This helps to increase the learning speed of the participants in the program while quickly reducing uncertainty. Through access to data and information within the organization, the project team can test their assumptions. This is done in repeating cycles, with as many small re-runs as necessary to develop and validate - and possibly implement - the solutions arrived at. When an 'experiment' fails, that too can be a good and important outcome.
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Business case as a basis for decision-making
All change projects include a financial analysis that shows what it means for the business to implement the project. Good projects are implemented in the business.
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Top management involvement
The involvement and commitment of top management is crucial. Their involvement and presence makes the participants in the leadership program feel like the "chosen ones". This ensures understanding of the importance of the program from the very beginning. Top management should therefore be involved in both the development of the program and contribute to the actual delivery. This ensures a high level of commitment and motivation among participants. They must also provide access to the data and information participants need and ensure that the best projects are realized in the company.
