Good leaders are the key to any successful organisation, and developing them is the best way to invest in continued prosperity and growth.
However, leadership development is one key metric of success that even the most successful organisations are failing at. According to research from the Corporate Executive Board (CEB), 66% of companies invest in programs that aim to identify high-potential employees and help them advance, but only 24% of senior executives at those firms consider the programs to be a success. What is telling is that the world’s largest corporations, 30% of new CEOs are hired from outside the company.
What is telling is that the world’s largest corporations, 30% of new CEOs are hired from outside the company.
It is not as if organisations are not investing in leadership development. For years, organisations have lavished time and money on improving the capabilities of managers and on nurturing new leaders. US companies alone spend almost $14 billion annually on leadership development.
But these initiatives are missing the mark, at great cost. With 30 percent of US companies admitting that they have failed to exploit their international business opportunities fully because they lack enough leaders with the right capabilities.
So just why are these leadership development mistakes occurring? And how do you overcome them?
With 30 percent of US companies admitting that they have failed to exploit their international business opportunities fully because they lack enough leaders with the right capabilities.
Context is a critical component of successful leadership. A brilliant leader in one situation does not necessarily perform well in another. Imagine the CEO of a large services business who has an outstanding record when markets were growing quickly, but then fails to provide clear direction or to impose financial discipline on the group’s business units during an economic downturn – choosing instead, to continue encouraging innovation and new thinking—hallmarks of the culture that had previously brought success—until he is finally replaced for underperformance.
Context is a critical component of successful leadership.
Too many training initiatives rest on the assumption that one size fits all and that the same group of skills or style of leadership is appropriate regardless of strategy, organisational culture, or CEO mandate. Focusing on context inevitably means equipping leaders with a small number of competencies (two to three) that will make a significant difference to performance. When a company cuts through the noise to identify a small number of leadership capabilities essential for success in its business—such as high-quality decision making or stronger coaching skills—it achieves far better outcomes.
Too many training initiatives rest on the assumption that one size fits all regardless of strategy, organisational culture, or CEO mandate.
Decoupling reflection from real work
Which works better, leadership classes in a university classroom setting, or actually doing a job?
When it comes to planning a leadership development program, organisations face a delicate balancing act. On the one hand, there is value in off-site programs that offer participants time to step back and escape the pressing demands of a day job. On the other hand, even after very basic training sessions, adults typically retain just 10 percent of what they hear in classroom lectures, versus nearly two-thirds when they learn by doing. Furthermore, burgeoning leaders, no matter how talented, often struggle to transfer even their most powerful off-site experiences into changed behaviour on the front line.
So wouldn’t it be better to ditch the classroom programs and concentrate on practical on-the-job training? It isn’t as straightforward as it sounds. It isn’t easy to create opportunities that simultaneously address high-priority needs like accelerating a new-product launch, turning around a sales region, negotiating an external partnership, or developing a new digital-marketing strategy—and provide personal-development opportunities for the participants.
To be a more effective leader, one has to change one’s way of thinking and the behaviour that goes along with it. While most companies recognise that this also means adjusting underlying mind-sets, too often these organisations are reluctant to address the root causes of why leaders act the way they do. Doing so will be uncomfortable for all involved, but it is an essential step to changing behaviour. Identifying some of the deepest, “below the surface” thoughts, feelings, assumptions, and beliefs is usually a precondition of behavioural change—one too often left out of development programs.
So, how can organisations create more-effective development programs and cut down on an immense amount of potential in-grown talent?
To be a more effective leader, one has to change one’s way of thinking and the behaviour that goes along with it.
Determining the most important competencies for leadership roles.
There are 8 that are crucial for senior executive performance. They are results orientation, strategic orientation, collaboration and influence, team leadership, developing organisational capabilities, change leadership, market understanding, and inclusiveness.
Rigorously assessing the potential of aspiring managers.
This involves checking their motivational fit and carefully rating them on the four key hallmarks— curiosity, insight, engagement, and determination.
Creating a growth map
This shows how a person’s strengths in each of the hallmarks align with the competencies required in various roles.
Giving those with high potential the right development opportunities
Including job rotations and promotions they might not seem completely qualified for but that fit their growth maps—as well as targeted coaching and support.
It is also undeniable that current initiatives often fall short, costing precious talent to evaporate, resources to be wasted, and turnover to increase. A big number of hidden costs occur due to this as well, understand the 4 biggest hidden costs here. It remains critical for employers and employees to both take ownership and initiate their own learning and development, despite the challenges. And this is where we can help. To learn how we can help you facilitate and enable your employees to be in command of their leadership development and grow for your organisation’s future, get in touch by visiting Accendo.
Laci Loew and Karen O’Leonard, Leadership Development Factbook 2012: Benchmarks and Trends in U.S. Leadership Development