20th November 2020

The Development Quotient

“Whenever you can, count” Francis Galton

To be a recognised ‘developer of people’ is a huge plus for an organisation or for an individual manager. From business continuity to brand perception, I could fill a post just on the benefits of having the ability to develop talent. Likewise, an organisation that lacks the capability to develop people or, worse still, burns through talent, is likely to become trapped in a vicious cycle of employee churn.

Let us take the benefits of developing people as read.

Now when you encounter an organisation that lays claim to being committed to developing and retaining people or a manager who claims to be a great developer of people you might well wonder ‘what is their evidence for that?’ or ‘how do they quantify that?’.

There is a way to measure people development capability; it is called the Development Quotient or DQ.

The DQ puts a number on how effective organisations, business units and individual managers are in translating the fundamental constructs of people development into outcomes.

There are four variables in the DQ. The number of planned or direct promotions to roles, the number of sponsored development moves, the number of people referred into the organisation by its own employees and the number of people who leave the organisation.

These variables are combined in the following equation.

Let’s look at the DQ in more detail.

The numerators, the factors that put credibility behind development claims, in this equation are:

P For Planned or Direct Promotions

This is the number individuals that have been moved at least one level up in the organisation’s hierarchy. These are promotions driven from lists generated in succession or talent planning discussions or from individuals being direct appointments to higher-level roles.

At the organisational level direct appointments are a sign that the enterprise has invested in preparing people for roles and has faith in their succession and talent planning processes. At the individual manager level direct promotions demonstrate that leader’s ability to develop people.

You might ask “what about people who apply for a promotion and get it?”. Well, the focus of the DQ is on the development effort of the organisation, business unit, function, or manager rather than the initiative of the individual, so we do not count those in the DQ.

S for Sponsored Development Moves

This is the number of instances where an individual is placed in a role or a project with the specific objective of giving them the opportunity to learn or practice new skills or behaviours. While the move may not be a promotion it will involve them doing new or different things or perhaps working with very different people.

Examples might be a cross functional move or leading a project in an area they know nothing about. Or starting something new for the organisation. Or turning around a poor performing business unit or function.

You might ask “what about people taking on more responsibility such as a bigger account?”. In those instances, the individual will most likely be leveraging most of the same skills. That is not development in our humble opinion (and we can point to plenty of research to back it up).

R for Referrals of People into the Organisation

This is the number of people who have been sponsored into and joined the organisation because of the efforts of an existing employee.

Referrals are the most efficient form of recruitment. A healthy referral program is a sign of a culture so engaging that employees actively engage with people from their network and their friends and family to bring them on board.

You might ask “what about the great people we’ve hired from ads on job boards, or who were approached by a member of the recruitment team or sourced by a headhunter?” Of course it’s still important to hire great people.  But, in those instances the organisation has gone to market because there is no one ready to put into that role either as a promotion or a development move.

The denominator, the factor that reduces development credibility, in this equation is:

D for Departures

This is the number of people who leave the organisation due to performance reasons, restructuring or who just walk away.

These people are no longer candidates for development. They are the opposite. Good people may have left due to restructuring. People may have been terminated for clear reasons of performance or behaviour. In which case your improvement efforts have failed. Or people may have just wandered off in search of greener pastures. In which case, they have been overlooked or are not engaged in development.

In people performance terms employee turnover is like trying to drive a car with one foot on the brake. It is a drag on momentum, focus and engagement.

The beauty of the Development Quotient is that it can be applied on an organisational level, as well as at business unit or functional level. Or at the level of each individual manager of people.

The DQ can also be used to assess your gender balance efforts. I.e., is the DQ for females higher or lower than the DQ for males?

What is the right DQ number?

I hate giving this answer but, ‘it depends . . .’

The first step is to get a baseline number for the organisation (or yourself). Just use the last twelve months as a review period.

Getting to a baseline number should cause you to reflect on questions like:

  • Is our succession planning effective?
  • Who is being actively developed right now?
  • How good are our managers at developing people?
  • How much are we spending on external recruitment and could we spend less by developing our own people?
  • Why is it that people just walk away from the organisation?

In the first instance the discussion you have around these questions and the others you will inevitably come up with is more important than your DQ. The next step is to make decisions and take action to impact one or more of the DQ variables. Then you can set a new target and hold your organisation or yourself to account.

Justin Miles

Justin Miles

Manager Partner, Melbourne at Generator Talent
Justin is the Managing Partner of our Melbourne office, an outcome focused leader with a track record of driving business performance through proven talent and organisation development practices. Justin’s methods and skills have been shaped by working with performance oriented leaders in great companies including PepsiCo, The Campbell Soup Company, Diageo, Rip Curl, Fonterra and Wesfarmers, in Australia, the USA and Latin America.
Justin Miles

Categories: Developing Leaders Uncategorised

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