Problem-based Leadership Development Series: Part 1 of 3
Posted by Noah Rabinowitz on April 8, 2019.
Leadership is one of society’s and industry’s favorite topics, and—across the globe—we’ve been spending billions in our pursuits to improve leadership for decades—$50 billion a year by some estimates.1 Just check out the leadership section in any online or physical bookstore and you’ll find thousands of titles on the topic—each one promoting a new, different and better approach, framework, or model for leading. By Deloitte’s research, 84 percent of global organizations offer formal learning programs for leadership development, meaning nearly every organization invests in these activities.2 From competency structures and behavioral formulas to mindfulness and neuropsychological models, leadership frameworks are overly abundant. They also shift with the times, ride trends and quickly come in and out of fashion. If there’s one thing that’s certain about leadership, it’s that there’s no consensus on what it means and how to be great at it. Despite the volume of thinking about leadership, what has this thinking about leadership actually produced? In many cases, the answer to that question is, “We just don’t know.”
It’s Time to Ask the Hard Questions
So, if we’ve built such a prolific and large body of knowledge on the topic, studied it so thoroughly, and come to such profound conclusions:
- Why is the gap growing between the rise of exponential technologies and actual leadership capability?
- Why is artificial intelligence (AI) exponentially outpacing human capability?
If we’ve invested so smartly and precisely in developing the next generation of agile, high-potential leaders and introduced them into the market:
- Why are 82 percent of employees ranking their leaders as “fundamentally uninspiring?3
- Why is the overall Return on Invested Capital (ROIC) across companies and industries going down, meaning leaders are producing less while investing more?
- Why are “change management” and “digital transformation”—or any transformation for that matter—still even topics of discussion?
Also, if our leadership development efforts had been so successful and have improved (rather than just changed) over time:
- Why is the war for talent alive, well, and maybe even more acute than ever?
- Where is the surplus of transformational talent that we’ve been building and grooming over the last 20 years?
In Deloitte’s 2018 Millennial survey, only 44 percent of all Millennials surveyed agreed that business leaders are “making a positive impact on the world.”4 Moreover, according to University of Michigan Professor Mark Perry, only 13.4 percent of the Fortune 500 in 1955 were still there in 2011. More than 87 percent had gone bankrupt, merged, been restructured, or had fallen off the list completely.5 If our leadership development research and efforts were so successful, wouldn’t we see a reversal of the inherent Sigmoid curve factors that act upon all organizations and that are accelerating this phenomenon of “creative destruction”?
The Sigmoid Curve Model
The idea behind the Sigmoid curve model is that all things occur in cycles of growth and decline. One way to a continuous and sustained upward trajectory in progress is to make the jump to a new growth cycle before the one you are in plateaus and begins its guaranteed and inevitable decline. If our leadership models are as innovative as we’d like to think, shouldn’t we be avoiding the perils of the inevitable curve of decline?6 If we are, why are companies falling off the Fortune 500 list at a faster pace than ever before?7
The Answer: It’s Time for Change
The challenge in answering these hard questions might provide the first honest indicator that, when it comes to leadership development, things need to change and there is no compelling reason to hang on any longer to what we’ve done in the past. The approaches we’ve been using to develop leaders could even be generating a negative return on investment.
Harvard’s 2018 Leadership Development survey found that 75 percent of L&D executives surveyed felt that leadership program effectiveness was clearly not improving.8 At best, the results of all of this spending are unknown. According to Harvard Professor Barbara Kellerman, “… notwithstanding the enormous sums of money and time that have been poured into trying to teach people how to lead, over its roughly 40-year history the leadership industry has not in any major, meaningful, measurable way improved the human condition.”9 We’re throwing money against a poorly defined problem, and then not seeing the expected results. In other domain areas (finance, IT, supply chain, etc.), this conglomeration of vague and constantly moving targets and intangible outcomes would be generally unacceptable.
Why is Leadership Development Change Needed?
While it may not be a popular perspective, it’s our assertion at Deloitte that leadership development efforts tend to fall behind because the very organizations that have been tasked with building the platform for leadership to thrive and evolve are often distracted by a complex web of generally accepted practices, which we refer to as “orthodoxies.”
Most large organizations have a leadership and talent organization and/or a Center of Excellence as part of the human resources or similar department. These departments have been working, albeit with the best of intentions, to accelerate leadership in their organizations. Their efforts have resulted in programs, tools, and processes to build stronger talent pipelines, reinforce bench strength, and prepare for the future. Each year, as annual budgets are renewed, leadership practitioners in these departments spend significant portions of their budgets to invest in the care of their development system, carefully purchasing and selecting new tools, intellectual property, content, and programs—giving their development system updates whenever provided the opportunity or asked to do so, but rarely altering its core.
What has resulted from these years of cosmetic updates is a complex patchwork of programs, systems, models, trainings, e-learnings, reports, frameworks, nano-learnings, competencies, dashboards, tools, scales, apps, simulations, assessments, metrics, summits, development plans, speakers, workshops, and job aids that become, in and of themselves, the objective and deliverable of the leadership organization. The goal then shifts from driving exponential change and developing future-ready leaders to the updating and maintenance of the development system itself. The bureaucracy and preservation of the development platform ultimately becomes the final deliverable of the leadership organization. This symbiotic relationship with the leadership industry promotes newness and change as the objective rather than actual impact and outcomes. And with technology and change on a nearly exponential upward trajectory, this incremental approach is yielding an expanding leadership deficit.
A Leadership Development Shift
So the challenge is clear: To make a more permanent pivot toward sustained value creation, the leadership organization needs to make dramatic changes—the biggest being a shift away from content and newness and a hard turn toward deep contextual relevance and business impact. To make a shift from a content-based to a context-dependent approach, we need to first tune in to the distractions and hard-coded orthodoxies that have quietly taken our focus away from the most important problem-solving mission of the leadership organization. These distractions have pulled us away from the central mission of doing what leaders do—solve the organization’s biggest and most challenging problems—and focusing us instead toward a task-based development paradigm, framed up by theoretical models and concepts that all say the same thing.
In the next blog installment, which will be part two of this three-part Problem-based Leadership Development series, we’ll discuss the 10 orthodoxies that distract us from executing effective leadership development and how to begin to address them. The big shift in leadership development will be to flip the 10 orthodoxies through a combination of innovative, real-world and agile-development strategies—all of them centrally focused on solving actual and relevant business problems. The mission of leadership development must become the same mission as the rest of the organization: to solve problems, create value, change culture, drive results, and build purpose.
is a managing director in the Human Capital practice of Deloitte Consulting LLP and a leader in Deloitte leadership.
1Mike Prokopeak, “Follow the Leader(ship) Spending,” Chief Learning Officer Magazine, March 21, 2018, https://www.clomedia.com/2018/03/21/follow-the-leadership-spending/.
2 Andrea Derler, Anthony Abbatiello, Stacia Garr, Better pond, bigger fish, Deloitte Review, Deloitte Development LLC, January 23, 2017, https://www2.deloitte.com/insights/us/en/deloitte-review/issue-20/developing-leaders-networks-of-opportunities.html.
3 Brandon Rigoni, Bailey Nelson, “Do Employees Really Know What’s Expected of Them?,” Gallup Business Journal, September 27, 2016, https://news.gallup.com/businessjournal/195803/employees-really-know-expected.aspx.
4 Deloitte Global, The Deloitte Millennial Survey 2017, January 2017, https://www2.deloitte.com/global/en/pages/about-deloitte/articles/millennialsurvey.html.
5 Mark J. Perry, “Only 53 US companies have been on the Fortune 500 since 1955, thanks to the creative destruction that fuels economic prosperity,” Carpe Diem AEI, May 23, 2018, https://www.aei.org/publication/only-53-us-companies-have-been-on-the-fortune-500-since-1955-thanks-to-the-creative-destruction-that-fuels-economic-prosperity/
6 Rebecca Bagley, “The Key to Growth: Transformational Change,” Forbes, January 2, 2013, https://www.forbes.com/sites/rebeccabagley/2013/01/02/the-key-to-growth-transformational-change/#34d5693a6b8c.
7 Peter H. Diamandis and Steven Kotler, “Bold: How to Go Big, Create Wealth and Impact the World,” 2016.
8 Harvard Business Publishing Corporate Learning, “The 2018 State of Leadership Development: Meeting the Transformation Imperative,” 2018, http://www.harvardbusiness.org/sites/default/files/20853_CL_StateOfLeadership_Report_2018_May2018.pdf.
9 Barbara Kellerman, “The End of Leadership,” 2012.