Leadership development has grown into a £10 billion industry, overflowing with literature, books, and various models. Despite the extensive investment and research, organizations still struggle to develop effective leaders. The Global Human Capital Trends 2014 survey by Deloitte University Press highlighted that leadership remains the top talent issue worldwide. It identifies a considerable “readiness gap” in organizations.  The data shows that while there is a huge investment in transformational leadership development, the results are mediocre.

1. Spend And Impact

The corporate training market, including leadership development programs, has been growing consistently. In the U.S. alone, organizations spent approximately $87.6 billion on training and development in 2018. This is a significant increase from $70.6 billion in 2016 (Training Industry Report, 2018). Globally, leadership development remains a top priority for companies. In Deloitte’s 2019 Global Human Capital Trends report, 80% of respondents identified leadership as a high priority. It also showed 35% rating their organizations’ leadership performance as excellent or very good.

2. Success

The effectiveness of leadership development programs is a matter of debate. According to the Harvard Business Review (2016), U.S. companies spent $160 billion on employee training and education in 2015, with billions allocated to leadership development specifically. However, only 25% of respondents in a 2016 study by Brandon Hall Group believed their leadership development programs were effective.

3. Cost

The cost of leadership development programs can vary greatly depending on factors such as program length, location, and provider reputation. Some executive education programs at prestigious institutions like Harvard, Stanford, or Wharton can cost upwards of $10,000 to $15,000 per participant for a one-week course. More comprehensive, customized programs can reach six or even seven-figure price tags. On the other hand, there are more affordable options like online courses, webinars, and workshops, which can range from a few hundred to a few thousand dollars.

Given these numbers, it’s crucial for organizations to critically evaluate their investments in leadership development programs and consider innovative, cost-effective solutions that focus on practical skills and real-world applications. It’s important to assess the outcomes of these programs and continuously improve them based on feedback and data-driven insights to ensure a positive return on investment.

Most Transformational Leadership Development Comes From Experience

One potential explanation for this issue is that transformational leadership development programs tend to prioritize acquiring leadership knowledge over practising the skills of leading. The 70:20:10 ratio model, proposed by researchers at the Center for Creative Leadership (CCL), suggests that 70% of learning comes from on-the-job experiences, 20% from feedback and examples, and 10% from courses and reading. With most leadership development programs, there may be an imbalance in this distribution, with an excessive focus on theory and not enough emphasis on practical experience.

Given the widespread availability of leadership knowledge online, should leadership development programs pivot to concentrate on developing the actual skills of leading? This could be done by identifying skill gaps and working on them through executive coaching and challenging assignments. The gap between knowing and doing is substantial, and traditional leadership development approaches have only made a limited impact.

Behaviour Is The Evidence of Positive Leadership

People generally understand what good leading entails through examples of behaviour, but may struggle to define the more abstract concept of “leadership.” Emphasizing the action verb “leading” instead of the noun “leadership” could potentially shift the focus to the practice of leading. After all, a leader’s impact is determined by their actions and words, rather than their theoretical knowledge.

Creating a leader in a classroom is a difficult, if not impossible, task. Leadership is not simply a theory to be taught; it is a practice that must be learned through experience. Development should be immediate, measurable, and connected to tangible outcomes for both organizations and individuals. The question remains: should we continue with a flawed model of leadership development, or should we change direction by emphasizing leading rather than leadership? The choice is up to you.

A Strategic Approach To Leadership Development

As organizations continue to invest in leadership development programs, it’s essential to adopt a more strategic approach to ensure their effectiveness and long-term impact. Here are some suggestions for organizations to improve their leadership development initiatives:

1. Align with organizational goals

Ensure that leadership development programs are aligned with the company’s overall objectives and culture. This helps create a shared understanding of the desired leadership behaviours and supports the development of leaders who can effectively drive the organization forward.

2. Customize the learning experience

Tailor the program to the specific needs and context of the organization and its participants. A one-size-fits-all approach may not yield the desired results, so consider creating customized learning paths that address individual leaders’ strengths and development areas.

3. Blend learning methods

Combine various learning methodologies, such as classroom training, online courses, mentoring, coaching, and on-the-job experiences. This allows leaders to acquire new knowledge and skills while also practising them in real-life situations.

4. Measure and evaluate

Regularly assess the effectiveness of the leadership development program through participant feedback, self-assessments, and performance metrics. This can help identify areas for improvement and enable organizations to refine their approach for better results.

5. Foster a learning culture

Encourage a culture of continuous learning and development throughout the organization. This can be achieved by promoting ongoing feedback, providing opportunities for skill-building, and recognizing and rewarding progress.

6. Engage senior leaders

Involve top executives in the design and delivery of leadership development programs. This not only demonstrates the organization’s commitment to leadership development but also provides opportunities for senior leaders to share their insights, experiences, and best practices with aspiring leaders.

7. Develop a leadership pipeline

Identify high-potential employees early in their careers and provide them with targeted development opportunities. This helps build a strong pipeline of future leaders who are prepared to take on leadership roles as they become available.

8. Focus on soft skills

While technical skills are important, soft skills such as communication, collaboration, empathy, and adaptability are critical for effective leadership. Ensure that the leadership development program addresses these areas to help leaders navigate complex and dynamic work environments.

By adopting these strategies, organizations can enhance the effectiveness and impact of their transformational leadership development programs, ensuring a positive return on investment and contributing to long-term organizational success.