U.S. companies spend more than $15 billion annually on leadership development programs, according to a 2014 Bersin by Deloitte study. Unfortunately, they may be throwing about half of that money away.
In a 2015 Korn Ferry “Real World Leadership” survey of 7,500 executives from 107 countries, 55 percent of respondents rank their return on leadership development as only “fair” to “very poor.”
So why aren’t leadership development dollars working? According to that same Korn Ferry study, senior leaders are the issue; respondents say the No. 1 barrier to leadership development success is a lack of executive sponsorship.
Developing and implementing effective leadership development programs is fundamental to create learning opportunities that stick and to gain buy-in from senior executives. Common practices, such as classes and seminars, are often disconnected from the business strategy; development is seen as nothing more than wasted “one off” classroom time and valuable time spent away from the job.
The “Real World Leadership” study found that more than a third (35 percent) of leaderswould like to see more context-based development. Respondents said that ideally, program content should be based on current strategies and business issues. But on average, they say less than a quarter of content is actually context-based. Development needs to be seen as part of an ongoing journey rather than a series of disconnected events; respondents also prefer live, face-to-face interactions to online or less personal methods of learning.
Development must start deeper in the pipeline and not be an exclusive privilege for senior executives. These leaders need to make it a part of the culture, by not just participating in their own learning but also supporting others’ development. Identifying leaders of the future must start early, and organizations must provide those critical business experiences from which these individuals will make mistakes and learn. With roles and responsibilities becoming increasingly complex, development and associated feedback need to be provided consistently over time, across all levels in the organization.
Here are a few pointers to consider when creating effective, sustainable leadership development:
- Start with strategic business needs. Understand where the key areas of focus are and establish the leadership profiles required — development can then be targeted accordingly. For example, if the organization is looking to increase its global footprint and expand into new markets, it will need versatile leaders who can work successfully in different cultures. This must be driven by the C-suite.
- Go deep in the talent pipeline. Often organizations just focus on the upper layers of senior management. This is a big mistake. High potentials need to be identified at the start of their careers and given the business experiences that will serve them well later on. Also, midlevel leaders need significant development; this group will have the biggest effect on execution and implementation of new strategies.
- Make it an ongoing journey of discovery. Leadership development doesn’t start and stop; it continues throughout one’s career, from the lower levels all the way up to the C-suite. The business experiences and learning needed to become a successful leader must match the ambition and scale of an organization’s desired strategic goals.
- Embed it into the culture. Leadership development needs to be firmly rooted in the organization’s culture. It can then be used to strengthen pipelines and fill critical talent gaps. A CEO who champions development sets the stage for the success of any talent initiative; role-modeling behaviors can have a significant bearing on the organization at large.
For leadership development to be truly successful, the tone must be set from the top. It has to start with the C-suite fully endorsing and engaging in the development strategy. This involves being clear on the roles they have to play and the need to insist that impact is regularly measured.
The Korn Ferry survey findings reveal that organizations aren’t satisfied with their leadership capabilities and behaviors; business leaders would only keep 52 percent of their current approach if they were able to start over. This suggests that while the business agenda has moved, the development agenda has remained static. Executives have identified that there’s a problem — now they need to be part of the solution.