Solving the ‘leadership development’ problem

Leaders are at the forefront of your business. With any luck, they’re the glue that binds your teams together, constantly striving to put your best foot forward.

In an era defined by rapid advancements, your leaders play a crucial role in driving innovation and overseeing team culture. As such, it should come as little surprise that leadership development is now a $366 billion dollar industry worldwide. That’s right, billion. With a b. While this might seem like a lofty price tag, we all know that effective leaders are priceless. 

Unfortunately, this investment isn’t quite matching up with the current output. Go1’s recent State of Learning Report identified developing leaders as by far the biggest challenge faced in delivering organisational learning. 

This disconnect between price tag and outcome leaves a leadership chasm. Put simply, this is bad news for everyone, from new hires all the way up to C-suite executives. The good news? We’ve decided to get to the bottom of this leadership development problem by analysing what leadership development is, why it’s important, how to identify common leadership development issues, what success looks like, and solutions to deliver effective leadership development training. 

Ready to lead the way on leadership development? Let’s start with two simple questions. 

What is leadership development (and why is it important)?  

At first glance, this might seem like an obvious answer. Leadership development is the process of developing leaders within a business, often via coaching, mentorship, or online learning. To expand on this, Business Dictionary defines leadership development as “teaching of leadership qualities, including communication, ability to motivate others, and management, to an individual who may or may not use the learned skills in a leadership position”. 

There are a few common methods of administering leadership development. According to a survey of 28,000 business leaders by Chief Learning Officer magazine, 73% of organisations currently rely on instructor-led leadership development, while a further 63% employ executive coaching. 

Further, this survey identified the most valuable leadership development attributes as improving coaching skills (priority for 34% of respondents), communication (31%), employee engagement (27%), and strategic planning (21%). These ‘soft skills’ align with the priorities identified in Go1’s State of Learning Report, which found the top leadership topics on Go1 are emotional intelligence, negotiation, mentoring, and team building & teamwork. 

Of course, the question is less what and more why. According to Forbes, 95% of learning organisations plan to either maintain or increase their current leadership development budget. Remember, this is a $366 billion global industry, so we’re talking big money here. Similarly, a recent Deloitte survey found that 80% of organisations rate leadership development as a high priority. This highlights the value that organisations place on effective leadership development. 

Again, the answer to why leadership development is so important is relatively straightforward. Think back to all the roles you’ve worked in. What separated the good jobs from the bad? If you’re like most people, your team leader probably factors heavily into this answer. An effective leadership culture can be the difference between a positive, enjoyable workplace, and dreading showing up to the office on Monday morning. This isn’t just anecdotal evidence, it’s a fact. Research by LinkedIn shows that, of 1 million surveyed employees, 75% of those who have voluntarily left their jobs did so because of their boss or immediate supervisor, not because of the role. Accordingly, poor management is the #1 reason people quit their jobs. 

Putting a purely business-focused lens on for a second, effective leadership can also be the difference between optimising your output, getting the most out of your workforce, and increasing revenue, or high employee turnover and lagging behind the competition. 

This is before even considering the benefits of leadership development compared to the high costs of leadership recruitment. Not only does developing leaders from within ensure they come equipped with an understanding of your organisational context, values, strategy, and branding, but it can also save you plenty of money in the long run. A recent survey of 1,500 ANZ region HR professionals by Human Resources Director Magazine found that the average cost of an executive-level hire is $34,440, while a senior-level manager will set you back $23,059 on average and a mid-level manager costs $17,841 on average. 

Effectively, leadership development can be what sets your company apart. So, it should be concerning that many businesses are failing to deliver in this area. This begs the question, how do you identify poor leadership development? 

Identifying common leadership development problems 

One of the biggest challenges of leadership development is that it is extremely difficult to quantify. Because leadership development focuses primarily on ‘soft skills’ such as communication, emotional intelligence, and developing interpersonal relationships, it is hard to objectively measure success. As Go1’s State of Learning Report emphasises, “leadership training needs to consider the context and needs of a specific organisation and individual. It is not a ‘one size fits all’ exercise, which adds to the complexity and challenge of developing effective leadership training.” 

Basically, you can’t deliver the same leadership training program to different people and expect to produce fully-formed leaders every time. This is where many leadership development programs fall short. Each person is different, necessitating a tailored approach to their leadership development journey. An effective leadership development program should account for this, and be adaptable to each learner’s individual context and learning style. 

Another common leadership development problem is the knowing-doing gap. As the name suggests, this is the gap between what people know and what they are actually able to do in practice. In a leadership development context, this may mean that employees have all the theoretical knowledge to be effective leaders, but lack the ability or opportunity to practically apply these skills. For tips on closing this gap, be sure to check our article ‘What is the knowing-doing gap?’. 

Additionally, a comprehensive analysis by McKinsey identified common leadership development pitfalls. We’ve already touched on two of them. Firstly, context trumps content, meaning there is no such thing as a ‘one size fits all’ leadership development program. Rather, each program should account for the context of your learners, company culture, leadership style, and organisational objectives. 

As their report emphasises, “focusing on context inevitably means equipping leaders with a small number of competencies that will make a significant difference to performance. Instead, what we often find is a long list of leadership standards, a complex web of dozens of competencies, and corporate-values statements”. Remember the old saying: keep it simple, stupid. This is definitely relevant in a leadership development context. Don’t overload potential leaders with an intricate web of jargon and boxes to tick, rather, let them focus on a few core skills and watch them excel. 

Secondly, their report finds most leadership development programs focus too heavily on reflection and not enough on application. This is where the knowing-doing gap can rear its ugly head. Per McKinsey’s analysis, “adults typically retain just 10 percent of what they hear in classroom lectures, versus nearly two-thirds when they learn by doing”, meaning it is crucial to find a balance between theoretical learning and practical application. In other words, less knowing, more doing. 

Another common leadership development problem is implementing effective measurement strategies. In general, companies are more likely to respond positively to leadership development when they can view and analyse concrete results. Yes, it is difficult to quantify soft skills, but difficult doesn’t mean impossible. Tools such as surveys on current leadership development methods, company-wide leadership feedback, monitoring participants’ career progression, and measuring business impact in relation to leaders' key projects can all be useful methods of measuring leadership development. 

No company is perfect (no, not even us), so chances are one of these problems probably rings a bell. Luckily, the first step to solving a problem is identifying that problem exists, so it’s worth analysing your current leadership development efforts to see if any of these issues are applicable. 

Closing the leadership development chasm 

We’ve identified common leadership development problems. Tick. Hopefully, you can’t relate to too many of them. This leaves us with two final, pressing questions. If we know what bad leadership development is, then what does successful leadership development look like? And, perhaps most importantly, how do we close this leadership development gap once and for all? 

The answer to the first question is tricky. Basically, it varies. Successful leadership development will mean different things to different companies. As mentioned, there is no perfect, one size fits all approach to leadership development, so successful leadership development will change depending on your culture, strategy, industry, organisational values, and your employees’ needs. But don’t let this answer discourage you. Instead, it should be seen as an opportunity to put your own unique stamp on the leadership development process and show off what makes your business great. 

To do this, we have a few suggestions for closing the leadership development gap. Too often, L&D teams can get bogged down dealing with the admin of managing individual content providers and a complex ‘stack’ of L&D tools. This means wasting time and resources on unnecessary administrative and technical issues, instead of focusing on strategically valuable tasks like developing programs, effective needs analysis, and raising the maturity of your organisation's L&D.

Go1 removes the need for multiple content vendors by finding, integrating, and managing these vendors for you. This enables you to access a network of world-class providers, who cover a huge variety of topics, all via a single subscription. We can also plug our comprehensive library of content directly into existing tools instead of adding something else to an already over-complicated HR ‘stack’.  

This solution addresses two of the most common leadership development problems. By providing access to a huge library of content, there is no longer any need for a one size fits all approach to leadership development. Rather, users can participate in self-guided learning, accessing content that best suits their individual requirements. This also helps to close the knowing-doing gap, by providing content tailored to a wide variety of learning styles. 

For more insights, be sure to subscribe to the Go1 newsletter to stay on top of all the latest L&D trends. Or, you can book a demo today to find out how Go1 can help with your team’s learning needs.