Has Leadership Development Failed?

$60 billion – more than Elon Musk’s bonus – gets spent every year on leadership development. So how come leadership effectiveness – organisational productivity, innovation, employee engagement, etc – is tanking worldwide?

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Leadership today: a failing report

Everyone moans about their boss, but looking at big data trends, it is clear that whatever most leaders are doing, it is not good leadership.

Let’s start with productivity: globally stagnant for the past decade or more. Innovation? Take-up of new technologies has stalled for the second year in a row. Employee engagement? Nearly one in five are miserably disengaged, costing the economy $8.8 trillion a year aka 9% of global GDP. When asked what would make the difference, the top answer from 122,000 workers worldwide was better culture and management – in other words, better leadership.

Unfortunately, this year’s DDI survey of close to 14,000 leaders worldwide found leadership rated at the lowest level since the Great Financial Crisis. Fewer than a third of leaders trust the C-suite to do what is right, close to two-thirds of CXOs lack a strong sense of purpose, almost three in four leaders say they feel burned out at the end of every day.

Why and how has leadership gone so wrong? And is bad leadership development to blame?

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What Not To Do

While there has been disappointingly little research into the impact of leadership development – whether formal programmes, coaching or inhouse leadership development - McKinsey’s smackdown from a decade ago still resonates: too much leadership development abstracts and generalises away from business context and the day job, shirks impact-measurement, and skitters over engaging with the deep mindsets and ways of working that drive leadership behaviours, in favour of slick models, superficial game playing and unfeasibly tidy action plans.

Not all leadership development is this bad, but too often when I ask leaders how they develop their people, and what kind of results they get, I hear a lot about dynamic process and happy sheets but very little about connection to and measurable impact on the business.?

Increasingly, leaders themselves are cynical about leadership development. That DDI survey found fewer than a quarter of leaders wanted coaching from their line manager or anyone else in the organisation – less demand even than for universally-ridiculed digital programmes - and almost half were uninterested in any outside development support. Leadership development spend has also dropped, as organisations look carefully at bang for budget and, perhaps, evaluate outcome and sentiment data to see what actually develops good leadership and/or ask their leaders what they actually need.

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The Case for the Defence

And yet…could it be that the problems with today’s leadership have little to do with leadership development?

For a start, 80% of leaders get zero formal leadership development, and most MBA programmes are light if not dismissive when it comes to developing leadership capability compared to financial planning or market analysis. As mentioned, corporate development budgets have shrunk, and too many new programmes offer the kind of low-investment quick wins that are guaranteed not to deliver.

It is also true that these are tough times for everyone at work, with most of us still in shock post-pandemic, a global economic wobbling if not downturning, social and political unrest in advanced as well as developing economies, and climate change bringing apocalyptic weather to the likes of Milton Keynes. It’s in human nature to take these challenges humanly – to look for someone to blame. And that blamed someone is often one’s boss, especially one’s far-off bosses: the fat cats who do not care or share in what can feel like unprecedented vulnerability. Under that kind of pressure, leaders can feel as if no amount of development or capability can possibly be enough to meet today’s challenges and workforce expectations.

But that’s not true.

Great leadership is not just possible, it is often easier and always more cost-effective to develop than the alternatives. Here are three guiding principles that underpin all successful leadership development: ?

The Three Underpinnnings of Leadership Development that Works

1. Focus development on context and person

As McKinsey emphasised, great leadership is context-dependent. But context includes not just the organisation and market, but also the leader herself.

Years ago I worked on a national research project looking at educational leadership effectiveness. One model we tested was a well-regarded diagnostic of leadership styles: Authoritative, Democratic and so on. Our research found that with the exception of a style best characterised as Bullying – a robust counter-indicator of effectiveness in everything but building-on-fire emergencies – there was no causal link between specific styles and institutional results. Instead, when we looked at leaders of the most effective institutions, we discovered different patterns of effective leadership driven by both the needs of their organisation and the leaders’ individual capabilities, experiences and personalities.

In subsequent research, I have found that for each leadership context there are usually two to four robustly evidenced leadership approaches, and honestly there is no best or worst within that group. A flamboyant deal-maker who needs to inspire a battered organisation to rejuvenate and connect with a potentially transformational emerging market needs to lead very differently from a non-confrontational introvert in a similar role, and will need to lead differently again if faced with the need to instil tighter operational rigour and faster adaptation to meet an global shift in their organisation’s revenue base.

What matters is focusing on whichever approach works best and easiest for the leader concerned to meet the business needs. And on nothing else.

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2. Make leadership development a team effort

It also makes sense to do leadership development as a team (yes, even for introverts – I work a lot in tech!).

After all, leadership is the business of helping others do better work than they ever could alone.? Its basis therefore is in how leaders get the most from and give the most to the people they work with, starting with their immediate colleagues. Developing a team together does not mean slacking off on individual development, quite the reverse – each team member develops their unique contribution to collective leadership effectiveness, discovering how they can draw on colleagues’ skills and support while helping those same colleagues maximise their own effectiveness in contributing to the common goal.

None of this is to dismiss the power of individual leadership development aka coaching. Focused individual attention can get dramatic results, but I have found this only happens in the context of collective development, focused as above. I think this is because team development clarifies the common cause and gives each individual a deep sense of why and how their individual efforts matter, and because people feel incentivised to contribute to that common development journey by taking their own development seriously , committing to it as a contribution to a higher cause rather than feeling like they have been placed in some kind of Special Measures or offered an Ego-Stroking Freebie.

3. Make development adaptively human

Sometimes I come across exasperated leaders who just want to crack on and push their colleagues through a development experience that will get them to take leadership seriously. ?

I get the frustration and impatience, but leadership development – which requires leaders to go through the vulnerable, exhausting and iterative process of deep growth in the exposing context of working with others – needs not Bullying but the kind of deeply challenging and connecting approach Amy Edmondson has summed up in her research on psychological safety.

This is because leadership is profoundly human, its behaviours driven by who we are, who we have been and who we want to be as well as our technical skill in talking persuasively or sizing up situations and audiences.? When people say they want leaders to be authentic, they are not talking about warts and all extraversion but about genuine, vulnerable two-way connection – a real person helping other real people achieve more than any of them could alone.

Like all human connections, developing leadership is never an isolated one-off.? The best initiatives are delivered cumulatively and adaptively to the participants. They take impact measurement seriously, both measuring meaningful indicators at the right time and in the least-disruptive ways, and using those metrics as evidence for collaborative improvement.

Also, the best leadership development feels like building any great relationship: sometimes painfully challenging, often joyous, and on reflection one of the things that makes life most fulfilling.

Conclusion: Do Leadership Development Right

Leadership makes so much difference to an organisation’s success that it needs doing, and doing right.?

The impact can be transformational: I know of companies who have achieved order-of-magnitude growth as the direct result of leadership interventions. On a larger scale, John Van Reenen of the LSE has found in over almost two decades of research that a third of the productivity gap between countries/sectors and between the companies within them can be attributed to management and leadership.

Great leadership makes a great difference, and it is easier than most of the industry realises to develop it.

What if you don’t do it?

Then your competitors will steal a march on you, your workforce will disengage and you will bring out the worst in your leaders themselves.

What if you do it badly?

All the above point, plus the opportunity cost of whatever ineffective process you put your leaders through.

What if it does not work for us?

If you focus leadership development on your context and your individual leaders, if you do it as a team and adapt in warmly human ways as you develop together, it can’t not work – and the biggest surprise will, in my experience, turn out to be how much you deepen your understanding of leadership beyond your own behaviours towards the behaviours not just of your colleagues, but of those your organisation serves.

Leadership can change the world. Put the effort into developing it effectively.