Why Leadership Development Fails

Happy Friday,

Even as far back as 2014, US companies were spending $14 billion a year on leadership development. Obviously, it’s more now. Despite the spend, companies saw little improvement in leadership capabilities or organizational performance.

McKinsey noticed the gap and conducted a study to find out why leadership uptake was so low. They found four reasons: 1) Programs fail because they’re too generic, 2) They’re disconnected from real-world work, 3) They avoid addressing the really big can of worms – why people (leaders) are what they are and act as they do, and 4) No measurement, no accountability, no reason to change.

Of the 500 companies surveyed, just 10% of CEOs saw a benefit, and only 7% believed their organization was developing effective leaders. In other words, at least 90% of CEO’s judged leadership development to be a well-intentioned waste.

Let’s step back. Once an organization exceeds 150 people, the CEO no longer leads day-to-day operations; second- and third-tier leaders do. The CEO shouts orders from the bridge, but the leadership team executes the plans and, importantly, they now determine whether and how much the crew cares about their job and the ship. The CEO leads the organization through the leadership team, meaning everyone with a supervisory role. So leaders become the CEO's 'organizational throttle'. Having a leadership team capable of motivating and inspiring the crew is essential for maximum success.

But second and third-tier leaders are usually the busiest people in the organization, and what got them where they are is being who they’ve always been. So, exposing them to 'drive-by leadership training' is going to be met with hidden resistance and low uptake.

That’s too bad. Good leadership benefits everyone, and that’s the job. Rather than ask, CEO’s need to expect good leadership from those entrusted with such a critical role, and use both a carrot and a stick to get it. The carrot - your leadership aptitude factors into your bonus. The stick - there are minimum requirements for you to retain that position.

I recommend these four:

Every leader must 1) inspire people to care more about this organization, and never less, 2) exhibit exceptional listening skills, 3) actively develop and improve the capabilities of their team, and 4) continue to progress as an effective leader.

Too burdensome? Too much to ask? Hardly.

These four expectations directly address the McKinsey report’s reasons for failure by providing context, practical application, targeting pre-existing mindsets, and facilitating measurement and accountability through incentives like bonuses and 360s. By establishing simple expectations as the foundation for further leadership training, lasting behavioral change isn’t just possible; it’s expected and rewarded. Which means, you'll get it.

Have a great weekend!

Dave

Macro economy trending better, AI somewhat scarier... Interested in your take.

Feedback and blowback are always welcome: dave@goodnewsfriday.com

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