Due to the obviously significant and crucial impacts, organizations in the U.S. and around the world invest large amounts of time and resources to develop their leaders. According to several reports, U.S. companies spent almost $14 billion on leadership development in 2012, $24.5 billion in 2014, as high as $50 billion in 2018 and the number is expected to further grow.
With such a heavy investment in leadership development, organizations are expecting a high ROI (return-on-investment) ratio. However, many factors can prevent a training and development program from working well.
Too many organizations were misguided by trending leadership development practices or the success stories of a few leading benchmarks. However, just because it’s trending does not mean that it fits the needs of everyone, and what works for others doesn’t mean that it will work for you. Blindly chasing popular leadership topics will only result in a waste of resources.
Even worse: Due to the popularity of certain topics, a large number of consulting firms, training institutions and professionals–both competent and unqualified ones–will claim to be able to provide services on these topics. Organizations can easily fall into incapable hands if they don’t have the scrutiny and expertise to evaluate and compare.
Lack of Evidence-Based Initiatives
When I type in the search term of “leadership development” into Google, more than 800 million results are offered. Many of these search results are “how-to” articles, and the rest are leadership development products. However, even going through a few pages of results quickly proves not all of these self-help articles and products are based on extensive research evidence or have solid data to back up their effectiveness claims.
Products and initiatives that are not based on evidence will not lead to expected levels of ability or performance improvement because they may not link to key elements of job performance or competencies leaders need to excel.
The design of an effective leadership development program should be based on scientific analyses of the foundation of the leaders’ jobs. These analyses performed by job and data scientists can help identify competencies that contribute to strong performance for different job areas. Meanwhile, having an evidence-based competency model in place will help: 1) identify areas that need improvement; 2) assess training and development needs and 3) measure training and development outcomes (e.g., ROI). Most importantly, focusing on a few competencies that are most crucial to high leadership effectiveness can also save the organization both time and money.
One Size Fits All
Training and development programs are expensive to develop or purchase, therefore it is tempting to try to fit all leaders into one comprehensive program. However, as I mentioned above, focusing on developing capabilities that are not important to leaders’ key functions won’t help achieve what you want. It is not hard to imagine that some of the key competencies for the leaders of customer service can be quite different from those in strategic planning.
A thorough job-based, function-specific competency model can help differentiate developmental needs within the organization and help efficiently distribute limited organization resources, along with achieving better results.
Fail to Accurately Assess the Outcomes
Some organizations hesitate to dive into leadership development because they find it hard to quantify the return on investment. Others tried to measure the outcomes, but they used the wrong measurements or analytical methods. When you can’t provide solid evidence on the effectiveness of the training and development initiatives, it is hard to motivate the stakeholders to invest or participate.
There are many methods and criteria to evaluate the outcomes of a leadership development program, and I will discuss them in my next blog. Be sure to visit Lead Read Today soon for that next installment.
All in all, to create a functioning leadership development program, organizations should look within and find the capabilities that best fit its needs. These capabilities should be identified using scientific methods and valid tools. Furthermore, decision-makers should collect evidence of effectiveness using appropriate methods and criteria to gain buy-ins from all stakeholders, from the participants to the executives that allocate the resources.
 Thomas, A.B. (1988). Does leadership make a difference to organizational performance? Administrative Science Quarterly, 33, 388-400.
 Loew, L., & O’Leonard, K. (2012). Leadership Development Factbook 2012: Benchmarks and trends in the U.S. Retrieved from: https://www.getabstract.com/en/summary/leadership-development-factbook-2012/18115
 Bersin, J. (2014). Spending on corporate training soars: Employee capabilities now a priority. Retrieved from: https://www.forbes.com/sites/joshbersin/2014/02/04/the-recovery-arrives-corporate-training-spend-skyrockets/#78ea77fac5a7
 Prokopeak, M. (2018). Follow the leader(ship) spending. Retrieved from: https://www.clomedia.com/2018/03/21/follow-the-leadership-spending/