Why are businesses spending over $300bn on leadership development that is not working?

Tim Taylor and Leon Forte-Doddrell

The definition of insanity is doing the same thing over and over again and expecting a different result.

Origin

Who coined this phrase may be unclear, but the relationship to what is happening today in the world of leadership development is not. Each year businesses spend over $300 bn on leadership development and another $100 bn on employee engagement programs. Even though it is widely reported that the traditional methods employed are not working. Only 7% of senior managers polled by a UK business school think that their companies develop global leaders effectively.

That's Crazy

Why is this happening?

The short answer is that people trying to solve the leadership development problem are locked in an old paradigm.  We will explain why it is hard to break out of a paradigm, show evidence that indicates a shift is happening and give you advice on what you can do to get ahead of the curve.

Paradigms are hard to break

We just have to look back through history to see how difficult humankind finds it when a new idea disrupts the accepted wisdom of the day. In 1539, Copernicus overturned more than a thousand years of doctrine that the sun revolves around the earth. Copernicus faced no persecution when he was alive because he died shortly after publishing his book. However, almost 100 years later, the world still resisted the idea that the earth is a planet in a solar system even with the evidence provided by Galileo’s telescope; the Inquisition tried him for publishing.

Paradigm shifts are hard to accept

People like what they know and deny disruption because they can’t easily respond to its discontinuous nature—often choosing to work harder in the existing paradigm, which inevitably leads to more frustration and wasted resources. Hence the reference to insanity.

You have to look at the problem in a fundamentally different way, take a fresh perspective, turn it on its head, and solve the problem with a new solution. Thomas Kuhn described a paradigm shift as a fundamental change in the approach, concepts, and assumptions of a practice.The leadership development industry, business schools, Chief Learning Officers, Chief People Officers, and the entire C-Team and the leagues of managers, whether they like it or not, have to recognise a disruptive paradigm shift is pending. The change is from episodic learning and development, cramming too much in too late, to a continuous lifelong learning model that offers little and often when the person needs it most.

Brave steps need courageous leaders.

Technology has had and continues to have a tremendous effect on the way we live our lives, particularly in the way we do our jobs.

Look at the paradigm shift of the Fax Machine.

Say Fax, and everyone thinks of the ’80s. Most people are surprised to learn that fax technology was created in 1843 by a little known Scotsman named Alexander Bain. The first recognisable version of what we consider the telephone fax was invented in 1964 by the Xerox company. By the ’70s, 25,000 fax machines operated across the US. By the 1990s, that number grew to 5 million fax machines. This shift was driven by how we perceived time and information.

Physical mail and fax machines have been replaced by email and pdfs, executed from a smartphone from anywhere, not tethered to an office space. The Fax concept is being reborn in Cloud fax, a technology that is to Fax what smartphones are to landlines!

The key learning point, how we view the world around us, how we perceive our lives and what we think is essential, creates the space for a disruptive paradigm shift. Our views of time, urgency and information lifted a technology invented in 1843 and placed it at the heart of the information technology shift of the late 20th century; this led the way to email, smartphones and low-latency trading.

The evidence the paradigm is shifting

1st. It is predicted that in less than ten years from now, we will be dealing with a talent deficit of 85.2 Million globally, which will lead to $8.5 trillion in unrealised revenue by 2030. The only country not to have a shortage will be India.

2nd. People enter managerial roles as early as 24/25; the average age for a new manager is 33. Despite this, many managers do not receive any official leadership training till they are 42. The timing gap is chronic, at best being nine years and at worst eighteen years.

3rd. Mastery takes time. Fact. Whether you know this intuitively or because you have researched what it takes to have truly mastered a skill. Mastery does not come quickly. To command the level of expertise to be called a master can take a decade or more to achieve. In his book, Mastery, Robert Greene provides this definition: “Mastery is not a function of genius or talent. It is a function of time and intense focus applied to a particular field of knowledge.” Greene posits that mastery would take around 10,000 hours. Gladwell’s book, Outliers, popularised this “10,000 hours rule”, citing studies and examples of world-class performers.

4th. Children as young as 8 had no difficulty in understanding the core concepts of leadership. Zenger/Folkman.

5th. Millennials are already 43.1% of the workforce, and growing, catering to these new managers, ensuring they don’t feel failed or that they are failing the next generation will be crucial to success in the future.

6th. Baby boomers are leaving at a rate of 10,000 a day; Despite this, 20% of 65-year-olds are still working full time, the highest rate it’s been since 1962.

7th. Generation Alpha is only nine years away; they will be the most diverse and well-educated generation the world will have ever seen. This generation is already impacting the market’s spending trends. We must prepare for their future workplace now, experiment whilst we have the time so that when 2030 rolls around, we already have a working system in place.

What if we started the road to mastery of leadership on day one of a person’s career?

Consider the benefits of looking 7 to 10 years ahead and planning your leadership pipeline, making decisions today about how much time is needed to develop "mastery" to meet the businesses needs in the future.

We know the new solutions must overcome the Ebbinghaus forgetting curve and other unknown challenges; behaviour, engagement, micro-learning, and technology, to name a few. Also, We think we understand behavioural change - 66 days or longer to develop new habits fully - but this too may be part of the old paradigm.

It’s time to embrace change. Accept that continuous development is the future and dedicate the appropriate money, energy, and time to create new leadership development solutions built on five core principles.

Our Advice to you

  • Acknowledge that businesses are suffering from a lack of leadership talent. 
  • Break out of the old paradigm. 
  • Look at the problem, the investment model and timing with fresh eyes. 
  • Fundamentally shift your thinking, new solutions are waiting to be discovered. 
  • Ask different questions to find new answers so that your organisation can thrive.
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