Effective leadership drives organizational success (Mandachian, Hussein, Noordin, & Taherdoost, 2016) and galvanizes the workforce to strive toward common goals. In lieu of this, leadership training programs aim to cultivate their participants’ abilities to sustain and improve their competencies, analyze situations, prepare a plan of action, and influence the manner in which activities are conducted in a work unit (Baron & Agustina, 2017).
To measure the effectiveness of leadership training programs being applied at the corporate level, the facts and figures surrounding the impact of leadership training on organizations need to be explored. Specifically, the consequences of insufficient training practices, or lack thereof, are presented. Other aspects of leadership training that the article will discuss include the demographic distribution of today’s workforces and how it affects leadership, the benefits of the leadership training programs set by organizations, and the areas in which those programs can improve on.
Leadership Training Statistics Table of Contents
- State of Leadership Training
- Benefits of Leadership Training
- Challenges in Implementing Leadership Training
- A Modern Approach to Effective Leadership Training
In a 2017 study on leadership training, it was found that training programs have a profound effect on the organizational levels (Lacerenza, Reyes, Marlow, Joseph, & Salas, 2017, p. 1707). Leadership training widens participants’ perception of satisfaction, increases their learning capacity, and drives results that affect the organization as a whole. But for it to foster optimum growth in its participants, the program should be facilitated based on the identified needs of organizations and the needs communicated by their staff.
Furthermore, no single program structure delivers the same results across the board for all organizations, given the variety in operations, management styles, and business models (Lacerenza, et. al., 2017, p. 1707). Therefore, planning is necessary prior to the application of any mode of comprehensive training.
Leadership qualities may be inherent in some individuals, but those traits and skills need to be fully brought out, refined, and then directed to the appropriate channels; a process undertaken by effective training programs. In going through one, participants are likely to experience improvement in a variety of areas, which include orchestrating advantageous situations for the company, adding value to the business, and the ability to derive success out of most plans, even bad business plans (Mandachian, et. al., 2016).
State of Leadership Training
Companies are increasing their budgets on leadership training programs yet fail to receive results commensurate to their expenditures. Given the importance of leadership training, a lot of enterprises apportion sizable budgets for the program.
- In 2019, investments in leadership training were estimated to be $370.3 billion globally, with $169.4 billion coming from North America (Size of the Training Industry, 2020). Both figures represent a slight leap from 2018, which was at $366.2 billion, and the peak of a progressively growing trend.
- If COVID-19 has not been a big enough impediment, 2020 numbers would likely exceed $370 billion.
- The problem is that, according to the Global Human Capital Trends 2019 report published by Deloitte, 41% of business leaders believe that their organizations fail to meet the needed leadership standards (Leading the Social Enterprise, 2020).
- Furthermore, 80% of the executives surveyed admitted that strengthening organizational leadership is a high priority.
- Delving deeper, research suggests that 49.7% of the global workforce in 2020 is composed of millennials and Gen Zers (Lettink, 2019).
- Half of that population does not trust their business leaders as stated in Deloitte’s 2019 Global Millennial Survey.
Furthermore, 51% of HR professionals worldwide also reported that their companies do not possess strategically-aligned programs.
Source: Training Industry 2020
Benefits of Leadership Training
Even though there are a plethora of articles online that question the effectiveness of leadership training, research has proven that a well-planned program contributes to the improvement of participants’ cognitive, affective, and skill-based abilities (Lacerenza, et. al., 2017). Its effects trickle up to upper management and down to subordinates, influencing growth in the entire organization.
- After undergoing leadership training, participants were found to have a 25% increase in learning and 20% in overall job performance (Lacerenza, et. al., 2017). This signals that a lot of programs are centered not only on leadership theories and practices but also on how they can be applied to the office setting.
- To further this point, the participants also exhibited a 28% increase in leadership behaviors and an 8% climb in subordinate performance (Lacerenza, et. al., 2017).
- Public sector managers who underwent executive coaching after leadership training, for instance, displayed an 88% increase in productivity (Day, 2000).
Source: Journal of Applied Psychology
Developing leaders within the organization, instead of hiring externally, appears to be a wise decision. Training costs a lot of money, but it even costs more to hire people at the managerial level who don’t fit the company culture and/or fail to deliver the expected results.
- Leadership development’s impact on companies is remarkable, posting a 25% increase in organizational outcomes in one study (Lacerenza, et. al., 2017). This figure rises significantly when leadership training is extended to personnel beneath senior levels.
- According to the 2018 Global Leadership Forecast prepared by The Conference Board and Development Dimensions International, organizations that conduct a more inclusive approach to leadership training were 4.2 times more likely to financially outperform those that maintain development within the confines of the management sphere.
- Looking at company demographics, Millennials and Gen Zers make up nearly half of today’s global workforce (Lettink, 2019), and 52% of that group list down career progression as the top work priority, more so than receiving a competitive salary (44%), according to PricewaterhouseCoopers’ Millennials at Work report. These people are already familiar with operations, thus they would require less training and can easily bank on an organization’s unique selling propositions compared to external hires. Leadership training also widens their competencies so they would fit their future roles.
Increased Engagement, Reduced Employee Turnover
- One of leadership development’s biggest benefits is in the way it increases employee engagement and decreases employee turnover rates.
- Gallup’s chief scientist, James K. Harper, stated that at least 75% of employees voluntarily leave their jobs due to poor management (Robison, J., 2008), which also influences their disengagement from operations.
- According to Officevibe’s 2020 report on employee feedback, 4 out of 10 workers lose engagement if no feedback is given.
- In fact, 82% of employees appreciate feedback, regardless if it’s positive or negative.
- With this, 43% of highly engaged employees receive feedback at least once a week.
In addition, coaching eliminates a lot of guesswork on subordinates’ part. It also forges tighter bonds between leaders and employees, leading to better relationships, greater trust, and increased engagement down the line.
Challenges in Implementing Leadership Training
A lot of people in the business sector recognize the advantages that leadership training brings to the table as reflected by the progressive increase in investments by companies worldwide (Training Industry, 2020). However, a chasm lies between leadership development’s theoretical benefits and its actual results. This is why many have questioned the program’s merits while its constrained effectiveness has led to numerous studies.
Leadership development bears a lot of potential stumbling blocks, from unclear or undefined targets to not leveraging historical data to monitor its impact. To improve existing programs, each of the major challenges needs to be navigated.
- The identified challenges in leadership programs are undefined or unclear goals, untransferable skills, not leveraging data analytics, the lack of resources, and the lack of strategic alignment with subordinates (Oesch, 2018; Todd, 2018; Beer, Finnstrom, and Schrader, 2016)
- Only one in four senior managers admits that leadership training is a critical tool in influencing business outcomes (Beer et al., 2016).
- Leadership training programs with a general approach could lead to skills and practices that are hardly useful or cannot be fully implemented within the framework of operations (Beer et al., 2016), even if they are designed to address specific business concerns.
- Big data can be leveraged to measure the impact of leadership training (Todd, 2018).
- Performance metrics such as turnover rate, employee satisfaction, high-quality outputs delivered, and the like should be set beforehand and matched with the actual results after the training.
- An effective program requires platforms and personnel to facilitate the exercises involved, both of which cost a good amount of money (Oesch, 2018). The lack of resources hinders some companies from running well-planned training programs, which could cause leadership gaps.
- Some leadership development initiatives can deliver as advertised in regard to shaping leaders, but the improvements granted by such must not end there (Oesch, 2018). A leader should be able to cascade an improvement in performance and culture down to their subordinates.
A Modern Approach to Effective Leadership Training
Direct solutions to concerns that have hounded leadership training programs in the past will fall short if organizations fail to factor in the requisites of the modern business setting (Deloitte, 2019). A plethora of software has been developed to help leaders see the big picture or at least build one in accordance with their vision and improve team performance. These range from project management and collaboration software to apps tailored to streamline specific parts of operations, like sales and analytics (Patel, 2015; Cutler, 2015). Furthermore, there are programs called learning management systems that help expand the leadership knowledge base of aspiring leaders (Kaya, 2017).
Technology has clearly disrupted the norms by which operations are implemented. And the rising global investments in business software (Statista, 2019) reflects the growing acceptance of tech-based solutions.
Leadership training has to evolve to account for technology’s entry into business as well as the preferences and behaviors of today’s leaders, the Millennials (Deloitte, 2019).
- For leadership training to suit the needs of today’s digital age, it should mold leaders as part of a team, leverage data analytics, add purpose to leadership, shape leaders into mentors or coaches, and adopt learning management systems (Deloitte, 2019; Gallup, 2019; Chief Learning Officer, 2018; Towards Maturity, 2018).
- As far as effectiveness is concerned, research suggests that 77% of high-performance projects leverage project management software (PricewaterhouseCoopers, 2007).
- In addition, 87% of high-performing companies use project management systems (Wrike, 2015).
- Leaders working with other leaders hasten the process of improving operations and company culture (Deloitte, 2019). It addresses the needs of today’s fast-paced market.
- With data analytics and collaboration software leveraged by today’s enterprises, being tech-savvy and treating analytics as a means to measure their team’s key performance indicators are expected from modern leaders (Deloitte, 2019)
- The younger members of the workforce prefer to work for a purpose and develop competencies rather than just collecting their monthly paychecks (Gallup, 2019).
- Leadership training should contextualize business success as a means of alleviating a particular social concern or an act with greater moral value (Deloitte, 2019).
- Millennials prefer working with coaches rather than traditional bosses (Gallup, 2019).
- In the 2018 See What Happens When Leaders Listen report by Chief Learning Officer, it was found that 63% of companies use this method to improve leaders’ coaching skills, influence employee engagement, communication, ánd strategic planning.
- Research suggests that innovating on traditional techniques has contributed to a 9% improvement in organizational growth, profit, productivity, and transformation (Towards Maturity, 2019).
- Moreover, 72% of organizations worldwide believe that elearning has helped them gain a competitive advantage while 40% of Fortune 500 companies are reported to leverage the technology (Pappas, 2015).
Several studies have proven leadership training’s effectiveness in producing not just strong leaders, but also stewards of positive outcomes (Lacerenza, et. al., 2017; Mandachian, et al., 2016; Baron & Agustina, 2017). The program’s benefits include significant increases in learning, leadership behaviors, and organizational outcomes. It also contributes to a slight increase in subordinate outcomes (Lacerenza, et. al., 2017).
What separates those studies’ findings from the lukewarm results experienced by companies is the strategy behind leadership development. In developing an effective training program, its goals have to be clearly defined, its effectiveness measurable, the skills picked up applicable at work, and its results aligned with company strategies (Deloitte, 2019). Specific results of the programs should be set rather than focusing on the development of textbook leaders.
Factoring in data analytics, leadership development also has the potential to have a greater effect than what was suggested by the studies. After all, with the strengths and weaknesses of programs identified and measured, improvements can be applied in later versions, suiting the exact needs of organizations as they evolve.
It is important to note that technology and its advanced solutions have penetrated the global business sphere, so creating a leadership training program that resolves the aforesaid concerns, alone, won’t be enough to produce the desired results. The style of leadership required in the modern setting has its own set of necessities. These include tech-savviness, the ability to discern ideal solutions through analytics, and creating a collaborative environment among leaders and teams (Gallup, 2019; Deloitte, 2019).
Furthermore, modern leadership training should cater to the Millennial segment (Lettink, 2019), since they are the ones poised to take leadership roles. In lieu of this, leadership development should not be remiss of the idea of leaders as mentors or coaches rather than being strict figures of authority. The tight bonds forged result in trust between parties and an increase in employee engagement (Harter, 2020).
That said, in making the necessary adjustments to leadership training programs, companies stand to benefit from a pipeline of strong future leaders. This saves an organization time and resources in looking for talent. After all, the next big solution to gaining a bigger market share could already be seated in one of the workstations, awaiting a development program that will bring out their untapped leadership potential.
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