Businesses—indeed all institutions—need strong leaders. Even the company with the best talent, greatest infrastructure, most lucrative government contacts, etc., will ultimately flounder if it doesn’t have a leader to steer the course and put all those assets to good, productive use.
Most businesses understand this very well, and they spend billions of dollars on leadership development training annually. But there are many experts and observers who don’t exactly think this is money well spent.
Too Much Spending on Leadership Development?
In an article for TLNT, Martin Lanik argues that there is a problem with all the money businesses spend on leadership development. In fact, he says that “there is a negative correlation between the macroeconomic amount spent on leadership development and our collective confidence in leadership.” It’s an apt point and one that he backs up with research.
Lanik cites a 2015 survey conducted by the Brandon Hall Group, which covered over 500 organizations across 34 countries and 31 industries. The study’s findings are alarming, he says. “Half of the respondents reported that their current leaders didn’t have the requisite skills to effectively lead their organizations at this time.
Moreover, 71% of the organizations said their leaders were not prepared to lead the company in the future.”
The Leadership Gap
If leaders are leading but those following them don’t believe they’re doing so effectively, there’s a gap. But what is causing this gap—indeed, this negative correlation—between dollars spent on leadership development training and the actual development of leaders?
We’re caught in a conundrum, Lanik suggests. He points out that we know what makes a good leader and have centuries of historical and recent examples to evaluate. But, the challenge is that we don’t know how to approach leadership development. We know what good leaders look like; we don’t know how to create them.
There’s no doubt that leaders are crucial to the success of any business. But putting money into leadership development programs might not be the most effective way—or even an effective way—to develop new leaders.
Here, we looked at the investment being made in leadership development and some concerns about whether that investment is justified. In a follow-up post, we’ll discuss some of the specific reasons that investments in leadership development may be missing the mark.