Forecasting an ROI,
The traditional and recommended approach for developing an ROI for leadership development has been described in previous chapters of this book. In the approach, ROI calculations are based on business impact data obtained after the program has been implemented. Business performance measures (Level 4 data) are easily converted to a monetary value, which is necessary for an ROI calculation. Sometimes these measures are not available, and it is usually assumed that an ROI calculation is out of the question. When measuring leadership development it is important to note that ROI calculations are possible at a variety of time frames using a variety of data. Preprogram ROI forecasts are possible, as well as forecasts with reaction data (Level 1), learning data (Level 2), and application data (Level 3). Part of the implementation plan for a leadership scorecard may be to include ROI forecasts as part of the evaluation process.