Leadership Development Programs can dilute the impact of high-performing leaders and companies, and achieve little or even negative returns on investment.
Businesses need to compete; they need to optimize returns to their shareholders and provide value to their customers. They need to relentlessly innovate. Business is not a forum for the soft and the fainthearted, and leadership development should not promote softness to employees at the expense of value-creation for shareholders and customers. The return on the $25 billion annual investment that corporate America makes in leadership development and training is negligible, says Stanford Graduate School of Business Professor, Jeffrey Pfeffer in Eilene Zimmerman’s piece in Stanford Insights, Jeffrey Pfeffer: Why the Leadership Industry has Failed. Despite this investment, Professor Pfeffer asserts, “Organizations are filled with disengaged, dissatisfied employees who don’t trust their leaders, and those leaders, in turn, face shortened job tenures, career derailments, and dismissals.”
While Pfeffer’s observations are powerful, his diagnosis is weak. Arguing that leadership development experts focus on an ideal world promoting behaviors unsuitable and impractical for the real world, Pfeffer suggests that lying and deceiving are necessary for the real world—in fact, he posits, “We would all be better off accepting that our leaders are generally not truthful, authentic, modest, or trustworthy, largely the opposite of the message we get from the popular motivational leadership stories we hear.” I strongly disagree.
Research, as well as experience with our own clients in Fortune 100 and medium-sized companies, demonstrate that while leaders who wield brutal power achieve results, they do so by fear and intimidation. As such, they are unable to inspire the discretionary human energy that drives innovation and makes companies sustainably great. Despite his weak diagnosis, Pfeffer is correct in stating, “The fundamental problem… is the disconnect between what we say we want from our leaders and how they actually manage organizations,” and that until leaders are measured by what they actually have or haven’t accomplished—and are held accountable for improving both their own behaviors and workplace conditions—nothing is likely to change.
While as an input, leadership development is qualitative and therefore difficult to value, its output needs to be measurable—otherwise, it should not be paid for with shareholders’ funds. Pfeffer is correct in his assertion that leadership development, like any other business initiative, cannot be successful without measurement of results and accountability for them. So, what needs to be done to extract the required, sustainable value from leadership development initiatives?
1. Amidst the astounding innovation of the past 15 years, we still structure our organizations and manage our people in much the same way we did a hundred years ago. Business structure and management philosophy have not been updated for the 21st century and a post-Internet workforce. Leadership development cannot be conducted successfully while insulated from the thinking around new structures and management methodology.
2. As with any business input, the return on leadership development should be meaningfully measured. This should be done both qualitatively and quantitatively and might include the following metrics:
a. Delegate evaluation.
b. Evaluations by delegate supervisors three and six months after the program.
c. 360° evaluations before and after the program.
d. Team performance metrics.
3. Leadership development should be customized to dovetail with the organization’s strategic objectives. Leaders should be developed specifically to deliver and execute on the organization’s objectives and measured on their effectiveness in doing so.
There is another, even more important dimension of effective leadership development. Leadership development and coaching programs are often too soft and fuzzy. In a high-performing environment where innovation flourishes, there needs to be conflict, pressure, great expectations, and high levels of accountability. All of these, however, should be grounded on a strong foundation of trust so that the conflict is productive rather than undermining. Leadership development should teach how to build trust and deep connection, not as ends in themselves, but as conditions for more intense, productive conflict, challenging status quos and pushing performance boundaries.