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Leadership development failing to drive business performance, say HR buyers

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New research by Mercer has shown that the most common leadership development methods are often considered the least effective by those in the organisation implementing them. 

Respondents to Mercer’s 2015 Leadership Survey recognised on-the-job experiences such as stretch assignments, rotational experiences and overseas assignments as the top three most effective methods for development. However, they also said that these methods are used just as often as face to face and online learning – the two methods recognised as the least effective. The report surveyed 215 companies employing over 2 million staff in the UK and across Europe including private and public sector organisations. The report highlighted that 55% of respondents were not happy with their current leadership development strategies and 81% of respondents didn’t measure return on investment of their leadership development programmes. According to Stuart Turnbull, Partner at Mercer, “Whilst a lot of research to date has focused on companies using the wrong methods, we identified a wider issue. The entire chain for leadership development is broken. What this means is that it’s difficult for companies to connect the business imperatives for leadership development, what good leadership looks like, how development should occur and, finally how to measure it all. Whilst organisations recognise that current methods are not effective, we see these tactics repeated because they are familiar, because they may play to a leader’s desires, because they may be more visible or because they are the simplest to roll-out.”

The report found that stretch assignments, overseas assignments and rotational experiences were the three most effective channels and used by 65%, 40% and 36% of respondents. However, the channels rated as least effective were face-to-face and online learning yet they were used by 64% and 40% of respondents. “We understand the pressures pushing HR departments down this route but the world is volatile and development needs to move away from these methods which mainly focus on leadership behaviour to focus more broadly on the impact that leaders deliver. Leadership development needs to integrate with real-world experience helping leaders anticipate and navigate the myriad of problems that they have to address. It’s time to reconnect the chain. The starting point for reconnecting leadership to value added will be unique to every organisation, depending on where the chain is broken.”

The report details a number of specific initiatives for connecting leadership to value. This starts with having a clear purpose for each level of leadership within the company and this can be strengthened by selecting the measures to track leadership impact on business performance and human capital. Only 27% of organisations include a business case when defining their leadership strategy. Mercer believes that the definition of great leadership needs to widen to include the impact that leaders make, rather than focus on a set of behaviours. The new rules of leadership development are collective, leader-led, and on-the job. These principles can be used to make enhancements to existing leadership development or can redefine a new approach. Fundamentally, the shift is away from programs to experiences.