Developing leaders not delivering ROI
Jenny Roper, June 02, 2015
Organisations are spending more on leadership development than ever before, the results may not justify the means
The results of leadership development initiatives and programmes don’t appear to be justifying increased spend in this area, a Corporate Research Forum (CRF) report has found.
The CRF’s Leadership Development – is it fit for purpose? paper, seen exclusively by HR magazine, interviewed more than 60 academics, thought leaders and practitioners, and surveyed 150 senior HR and L&D executives.
Its survey found that 34% of organisations had increased their spend on leadership development over the last three years, and that 17% had increased this spend significantly. Almost half (42%) reported that this was likely to rise over the next three years.
And yet less than a third (31%) rated their overall ability to develop leaders as ‘good’ or ‘excellent’. This result backs up other recent research findings, CRF reported. Half (50%) of the respondents to Deloitte’s Human Capital Trends 2015 survey, for example, reported ‘very important’ leadership shortfalls – just 6% rated their leadership pipeline as ‘very ready’.
According to the author of the report Gillian Pillans, there is “no simple answer to why there’s a disparity” between spend and results, but a key issue is a tendency not to devise leadership development initiatives according to the needs of the business.
Pillans added many opt for “off the shelf” formal courses rather than on-the-job learning, confirming the report’s finding that “few organisations [have] given more than superficial consideration to what was required to support the 70% learning on the job” where the 70:20:10 model is concerned.
“You can do some strategically relevant programmes in the 10%; there are good examples of that at top level. But the key way leaders develop is through experience on the job,” said Pillans.
The report also uncovered a mismatch between what businesses reported measuring to evaluate the effectiveness of leadership development, and their knowledge of how to measure this accurately. Pillans explained that, though 56% of respondents claimed to be measuring leadership development’s ‘impact on business results’, her research team didn’t get “the same richness of experience and detailed story” of how this was being done, compared with other criteria respondents reported measuring.
For Paul Kearns, chair of The Maturity Institute, this inability to measure leadership development’s effectiveness shows a confusion among L&D professionals about what they are actually trying to achieve.
“Everyone has just thrown their hands up and said ‘you can’t measure it; you can’t prove if you develop a leader in this way it leads to this business performance’,” he told HR magazine.
“The only way forward is to accept you can’t isolate things in an organisation, it’s a complex picture. But you do need to work out a system for measuring the effectiveness of leaders and leadership development,” he said.
“The first question asked on any course should be ‘if we teach you something about leadership how do you think it might impact on the job that you’re currently doing?’,” he added, regarding clarity around development strategy objectives.
“One of the key things is being clear about what your objectives are,” agreed Pillans.
In this way organisations can start to get more bang for their buck, she said. “Organisations may be able to achieve more with the same spend, or achieve the same with less spend if they designed their approaches a little differently.”
But of course this isn’t a matter simply of value for money. In the words of Tesco group HR director Alison Horner: “Because the world is so uncertain, leadership matters more than ever today.”