Making Effective Leadership Training Investments

If you are trying to decipher what good leadership looks like and determine what leadership programs are most effective, you are in good company. 

A recent McKinsey Quarterly article, “Decoding Leadership: What Really Matters,” a survey of 81 global companies, found that more than 90% of CEOs plan to increase leadership development investment because they view it as the single most important human-capital issue they face. However, 57% of CEOs were not confident that the training investments would be effective. Despite the fact that 86% of HR executives also believe that leadership is one of their most important challenges, 50% rated leadership shortfalls. Surprisingly, 50% of c-suite executives are not receiving any development in important areas such as strategic communication, respect and inclusion. 

The article identified four main qualities that are the differentiating factors between strong and weak leadership effectiveness. We all know that good leadership has always been considered a critical part of establishing the right organizational culture that leads to engagement, productivity, effective execution of strategies and financial results. However, these four qualities were the distinguishing behaviors present in the top quartile companies in McKinsey’s Organization Health Index vs. those in the bottom quartile. The qualities are:

• Solve problems effectively – creating processes for gathering and analyzing relevant information to strengthen the difficult pre-decision making process;
• Operate with a strong results orientation – emphasizing measureable achievement;
• Seek different perspectives – continually testing assumptions by listening and learning;
• Be supportive – utilizing emotional intelligence to understand teams and the environment.  

Many view the investment in leadership capacity as wasteful based upon the difficulty of retaining talent as well as inadequate measurement and sustainability. However, investing effectively in people creates both loyalty and engagement in addition to building knowledge, skills and abilities. When people are not engaged, there is a loss of financial results for the organization. Middle management needs to be engaged as much if not more than those at the highest levels of the company. The development of your organization’s leadership capacity creates a strategic weapon for not only retention and recruitment, but for succession planning throughout the company.