How do Leaders Become More Effective?
How do leaders improve their leadership capacity and become more competent and effective? If we knew the answer to this question with any certainty, then this article would be able to outline the simple steps that a leader or organisation could follow to improve leader effectiveness.
However, it is not easy to define one specific process for leadership development as leadership is known to be a very personal phenomenon that is almost always context specific and situational. Despite popular books and some theories, there is no one simple leadership style or formula that leaders can adopt to ensure effective leadership of others.
To add to this complexity, it is known that leaders themselves spend very little time examining their own styles and performance. Reflection is often a leader or manager’s least favourite activity. However, it is not just individual leaders that find the path to personal development difficult. Organisations are struggling to find rigorous methods to develop their leaders.
I was interviewing a CEO of a major international corporation some weeks ago. He was lamenting on the organisation’s high expenditure on leadership development programmes and its lack of return on investment. One of the examples he gave was of spending around A$15,000 to send a senior executive to a four day leadership development programme. The programme was ‘live in’ at an upmarket venue and was delivered by a couple of well-known professors from a very well-known American university. The manager who attended reported of his attendance as ‘a very positive experience’, although he indicated to the CEO that he ‘did not really learn anything new’ but thought it was an ‘exceptional networking opportunity’. The CEO first assumed the networking possibilities were for the benefit of the organisation and therefore the investment might produce a positive outcome for the organisation. However, some eight weeks later, the manager resigned to take up a position in an organisation of a manager he had met at the programme.
This example is not isolated. Most large organisations are experiencing the effect of a critical global shortage of effective leaders at all levels. In order to address the situation, organisations are responding by spending billions of dollars globally on leadership development programmes to develop the capacity and capabilities of their leaders and future leaders. Few organisations measure the return on investment of this expenditure. Current high levels of expenditure on leader development raise some significant questions particularly when we know from research examining leadership development over many years has consistently shown that less than 10 per cent of the experiences leaders reported as ‘key events’ and ‘shaping events’ in their knowledge and experience come from traditional education or training programmes 8.
So why do organisations globally continue to spend literally billions on leadership development when the evidence indicates much of the expenditure does not benefit the leader or the organisation? How can organisations better target their leadership development expenditure? This short article will attempt to address these questions and to show how empirical research points the way ahead for leader development.
Global Expenditure on Leader Development
The monetary value globally that organisations and governments are spending on leadership development programmes are estimated to be well over A$100 billion dollars annually 4. At the same time, there is no shortage of educational programmes and products that organisations may choose from to develop capability in their leaders. A quick search using Google for ‘leadership programmes’ will return over seven million matches!
While organisations and governments are providing education programmes for leadership and management development and spending significant resources on them, little research has been done to ascertain the actual return on investment, ROI, of this expenditure. As little as 10 to 20 per cent of organisations are interested in evaluating the effectiveness of their leadership development programmes 1.
Reflection and self-discovery by the leader are the keys to leader development
Notwithstanding, several models are being utilised by organisations to calculate the ROI of training expenditure. These include Kirkpatrick’s four-stage model, Swanson and Holton model, and Philips ROI calculations. Bassi and McMurrer collate their findings against the financial performance of the corporation and McLinden, Phillips, Hamlin, and Helbig evaluate the future economic impact of training 2.
Why do organisations appear to knowingly keep spending money on leadership development so inefficiently when the way forward is known from empirical research?
Summarising What We Know From Research on Leader Development
- A key issue for leadership development is identifying the appropriate strategy or mix of strategies that are relevant to:
− the personal journey of the leader, − the organisational context,
− business needs, and
− the organisational and national culture in which the leader leads 8.
Over the years, research examining leadership development has consistently shown that less than 10 per cent of the experiences leaders reported as ‘key events’ and ‘shaping events’ in their knowledge and experience come from traditional education or training programmes. For instance, in the original study 5, coursework was 6.2 per cent of ‘events’ and in the later study 7, it was 9.0 per cent, not the often cited 10 per cent of the misleading so called 70, 20, 10 dictum where 70 per cent represents experience on-the job, 20 per cent for learning from peers and observations of other leaders and 10 per cent classroom based.
Importance of On-The-Job Experience
Consistent research shows that on-the-job experience is a contributor to leadership development and effectiveness. However, reflection on experience is necessary if learning is to occur. A leader does not necessarily learn simply by doing something or experiencing something. In other words, there is a significant difference between ten years of experience and one year’s experience ten times over. One should be very cautious in assuming that having had an experience automatically means the leader has learned from it.
Therefore, on-the-job experience when used in leadership developmental programmes needs to be framed in wider learning processes like action learning, where significant organisational problems are tackled under senior executive sponsorship, succession planning, coaching, and mentoring. Cultural issues must be understood and addressed.
So Where to Now and How to Structure Leader Development?
Miller and Dalglish 8 lists six techniques and conclusions about how to include on-the-job experience as a useful tool in leadership development programmes:
- Certain experiences matter more than others. Some on-the-job experiences that are known to be effective include:
a. Early work experiences and unfamiliar responsibilities,
b. Short term assignments that stretch the leader,
c. Major line assignments that stretch the leader,
d. Observing other leaders (including very good or very bad superiors),
e. Hardships of various kinds (both at work and personally),
f. Some training programmes like coaching and mentoring programmes, especially
leaders training leaders,
g. Job rotations,
h. Inheriting problems from others that are in need of attention,
i. Dealing with difficult people,
j. Working in roles where there is a need to exert influence without formal power
or authority (for example in ‘staff’ positions), and
k. Working with a difficult or incompetent supervisor.
2. On-the-job experiences are powerful learning aids if they are challenging, include
unexpected issues, have high stakes, are complex, include pressure, and some novelty.
3. Different types of experiences teach different lessons. The trick for making an
experience useful to the learning of the leader is to ensure that the experience goes
to the heart of what drives the organisation and how to design the organisation to achieve
it. Research on practice 3 demonstrates that the reflection on the experience is a key
to gaining learning and insights and should:
a. Focus only on a few critical issues in the experience,
b. The reflection should be in close temporal proximity to the action,
c. The reflection should follow a structured process, for example like action learning, and
d. The reflection should lead back to more action and experience quickly
and not be reserved only for failures but should be undertaken for successes as well.
4. All jobs and work assignments can be made more developmental. Work assignments to
enhance experience can be done without forcing the leader to change roles. Early
feedback, mentoring, and coaching can increase the probability that learning will occur
5. Leaders can get many of the experiences they need in spite of the obstacles. Whoever
controls who gets what job controls the developmental opportunities for leaders and it is
a matter of knowing who needs what experience, having the appropriate experiences
available, and being willing to put developmental priorities ahead of other priorities in the
6. Learning takes place over time and is dynamic. The path of learning and experience is
filled with serendipity, accidents, dead-ends, and second attempts.
While it might appear intuitively obvious that on-the-job experience is one of the best methods of developing leadership talent, it is surprising how few organisations actually do it effectively. This is because organisations generally want results in the short term while development of people is a long-term proposition. Often programmes are not connecting to business results and therefore do not get senior leadership buy in.
Therefore, the answer to spending resources effectively on leader development lies in establishing leader development programmes that have a significant component of on-the-job experience combined with methods and techniques that ensures the leader reflects on this experience and learns from it. The six techniques listed above can be used to frame the developmental programme in wider learning process like action learning, coaching and mentoring. Our new book titled ‘The Leader in You: Developing Your Leadership Potential’, has been designed to assist both individual leaders and organisations to achieve greater effectiveness in leader development.
Different types of experiences teach different lessons
1. Avolio B, J Avey and D Quisenberry, 2010. “Estimating Return on Leadership Development Investment”, Leadership Quarterly, Vol 21, Iss. 4, p. 633.
2. Carliner S and I Bakir, 2010. “Trends in Spending on Training: An Analysis of the 1982 through 2008 Training Annual Industry Reports”, Performance Improvement Quarterly, Vol 23, Iss. 3, p. 77.
3. DeRue D and S Ashford, 2010, “Power to the People: Where Has Personal Agency Gone in Leadership Development?”, Industrial and Organizational Psychology, Vol 3, pp. 24–27.
4. Kules J, 2010. Examining the Impact of Training on Business Results through Post-training ROI. Disseration, Northcentral University, USA.
5. Lindsey E, V Homes and M McCall, 1987, Key Events in Executives’ Lives, Technical Report 32, Centre for Creative Leadership.
6. McCall M, 2010. ‘Recasting Leadership Development’, Industrial and Organizational Psychology, Vol 3, pp. 3–19.
7. McCall M and G Hollenbeck, 2002, Developing Global Executives, Harvard Business School Press, Boston.
8. Miller P and C Dalglish, 2011. The Leader in You: Developing Your Leadership Potential, Tilde University Press (Palgrave Macmillan), Melbourne.
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