When I was growing up, my parents were persistently subtle about their expectations regarding my education. They wanted me to be a medical doctor. Recently I spoke to my father and asked him if he was disappointed that I never became a doctor. He quickly replied, “Well, you are a doctor, just not the kind I thought you would be – and frankly, I am glad.”

I was a bit shocked when he added ‘and frankly I am glad’. How can the key buyer of my education be glad that things didn’t turn out as expected? My medical doctor friends make more money than I do with my Ph.D. So, how can my father be glad that the return on his investment did not pan out as planned?

When we educate our children, we do not measure the value of that education by focusing solely on tangible outcomes. So, why then do we want to measure the benefits of executive education as though we are calculating the return on investment on a piece of machinery?

What is education – what is investment – what is return?

To answer the question of ROI on executive education, we need to revisit three words - education, investment and return. Measuring the return on training has a long time track record of success. You can measure employee output, skill acquisition, skill application, and individual performance. But, training is very different from education. When an executive level manager goes through executive education offered by a world-class institution, the expected return is to emerge with new, value creating ways of thinking about their business and bring change in the way the executive thinks. However, measuring this return is next to impossible.

Many of us take a narrow approach in how we think about investment in executive education; limiting our definition of investment to the number on the invoice that is given by the delivering institution. However, investment is far deeper and complex. Investing in executive education is more than writing a cheque; it requires your managers to engage with the learning and disengage from their everyday.

Most of you at this point are thinking that if we define the ‘return’ as intangible and the ‘investment’ as equally intangible, then why does not that make the entire idea of measuring ROI moot? That is not the goal; the goal is to lay out the practical realities of the challenge in measuring return on investment of executive development. Among executive development institutions and their clients, there is a bias to measuring ROI only post program. In order to have a robust measurement of ROI, we must look beyond post program measures; in fact, ROI on executive development should be measured at all three stages of the process – design, delivery, and post-program.

Measuring ROI in the design phase

The global trend in executive education is moving towards more customized company-specific programs. For such programs – design, which is the first phase of executive education, is crucial. To measure ROI during the design phase, we have to pay attention to the four Ps of design - PhDs, practice, publications and proficiency. The basic message is that you get what you pay for! If you want your executives to truly benefit from an executive education program by emerging as more creative thinkers than before, you need to expose them to world-class faculty.

Faculty should be experts in the field; have real-life, practical business experience; and be active in building a body of knowledge that is contextual to India.

Measuring ROI in the in-class delivery phase

Buyers of executive education have to focus on 3 elements of in-class delivery when measuring ROI – the methodology, content and application opportunities.

Traditional lecture methodologies are passé; they are based on the flawed assumption that the expert in executive education is situated at the front of the room. The truth is that in a transformative executive education experience, the meeting of the mindsets must emerge between participants and between the participants and the faculty. Therefore, discussion methodologies like the case method and simulations are the best ways to educate executives.

As a buyer of executive education, you must also determine if the content will give you the right return. The strongest content is one that balances relevance, with world-class best practices and creativity. Certainly some content has to be Indian based – but a great deal of it has to tap into global best practices.

Finally, the measure of ROI in the in-class delivery phase is to ask: how much time will be spent in the executive education program on application? Will the faculty remain a faculty member discussing concepts and ideas or will they actually play the role of consultants uncovering and dealing with real issues faced by the executives in the room? Without this level of application and engagement, value is difficult to create.

Measuring ROI in the post-program phase

Finally, we get to the phase where most people have focused their efforts on measuring ROI, i.e. post-program. The current methods of measuring ROI at this stage include measures like participant reaction via a survey after a particular program; ranking participation reaction to this program vs. others; quantifying performance results of the participants after the training; and so on.

While these are good measures, they are certainly not perfect. However, if clients of executive education do not think about ROI at the design and delivery stage, they are unlikely to see meaningful results when using these typical post-program measures.

For those readers looking to find a causal relationship between executive education and performance, the search may never prove fruitful.

So where does this leave us? Well, back to my father – I didn’t just worry about his comments about my being or not being a medical doctor – I called and asked him: “So Dad, do you think - as the key buyer of my education – it was all worth it?” He replied, “So, it only cost me money – it cost you time – do you think it was worth it?” I thought about my reply for a long time…basically I have no real regrets. I have never debated the value of education. But, it took me years after my formal education to understand that good quality education is the only one that stays with you over time and the only one that creates true return on investment.