Increase Top-line Performance by Spending Less on Leadership Development?

Imagine you are camping and you run out of water. Your buddy offers to grab you some from the pool of water a few hundred meters away. He brings you two cups of water from which to choose:

Option A:  pumped through a water filter with 2 drops of bleach added for sterility

Option A: pumped through a water filter with 2 drops of bleach added for sterility

Option B:  taken from the least murky spot and LOTS of bleach added

Option B: taken from the least murky spot and LOTS of bleach added

Both are technically safe to drink. But which would you pick? Any normal person would likely choose option A. However, when it comes to selecting leaders from a pool of employees, most companies are picking option B with lackluster results.

Adding More Bleach Doesn’t Work

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Last year, US companies spent over $30billion (with a B) on leadership development. This year, that figure is projected to hit $38.3billion. Yet, despite spending nearly $120billion over the past 5 years on developing leaders, 86% of companies still agree there is a leadership crisis. (Deloitte, 2018 Global Talent Trends)

According to a recent Harvard Business Review article the reason most leadership development efforts fail is because shortly after training, people revert back to what they did before. Training rarely changes the underlying values and fundamental behaviors of individuals, regardless of how inspiring the training may happen to be. A top requirement for training to be effective is the ability and support to change behavior AFTER the training. So unless the system changes, training is going to influence performance much. It’s like  purifying a cup of water and then dumping it back into the same pool from which it came.

The other challenge that leadership development programs face is simply picking the wrong people. When 68% of managers indicate they don't like leading people (Berrett-Koehler, 2011) that can present huge problems downstream. In a recent analysis of 1,964 employees in leadership acceleration programs from 3 different companies, 42% of them actually rated below average. (HBR, Companies Are Bad at Identifying High-potential Employees, 2017) This is where companies are using the wrong selection technique. Managers were typically selecting  people based on their perspectives alone, picking individuals who simply: showed technical aptitude, delivered results, consistently honored commitments, or simply exemplified a specific trait that was valued by the organization. And while these things are not necessarily bad, without verification or some discipline, these strengths can easily become detriments to their success as leaders.

  • Technical experts become micromanagers

  • Individual performers continue focusing on their own activities and don’t focus on coaching their teams

  • People who consistently honor commitments neglect to delegate on because they don’t trust anyone else to get things done and become overwhelmed

  • And those who exemplify a specifically valued trait can often be terribly deficient in others areas


Picking Option A

Instead of pouring more dollars into inaccurately selected individuals, spend a little more time (and money) investing in better filtering methods. Periodic and single-rater performance reviews or non-competency based evaluations are not sufficient when it comes to identifying leadership potential. Focus on proven methodologies that have shown a high correlation to predicting leader performance. Ongoing people data sourced from multiple perspectives regarding various competencies and leadership recommendations are your best tools to select individuals with a clearer path to leadership success. After you’ve filtered out all the other stuff, you’ll just need a little extra refinement to turn those individuals into leaders people feel comfortable to drink from.

Dave NeedhamComment