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The Long Era of Lackluster Leadership

The single greatest business failure of the last 20 years is the inability of organizations to excel at leadership development. Consider this: in 2010, three quarters of respondents to an i4cp study said developing leaders is a highly important issue, but less than a quarter of respondents said their company is highly effective in this area. This wildly disproportionate ratio makes leadership development the most critical human-capital issue of the year.

That finding wouldn't be so important if it weren't part of a long-term trend. i4cp has been tracking major issues for over two decades and has found that leadership is consistently at or near the top of any such rankings. It's always a priority. Nonetheless, most companies still, taken as a whole, are mediocre or worse in this area. If progress in this area were anything like progress in, say, transistor innovation, there'd be nothing like Moore's Law. We'd still be stuck with computers the size of washing machines.

There are many reasons for lack of progress, of course, from a constantly evolving business environment that requires a shifting set of leadership skills to the obvious truth that leaders just can't be engineered and mass produced like new computer chips.

Still, my take is that, given all the resources poured into leadership development, organizations should be considerably better at this by now. I don't have a silver-bullet solution but I do have two overarching insights based on the research.

Insight #1: Leaders are NOT numbers and accountability oriented, but they should be.
I know this insight runs contrary to conventional wisdom, which is that most of today's executives are overly focused on numbers, chronically concerned with the bottom line and swimming in a sea of spreadsheets.

Here's the thing: Executives' number orientation tends to be fixated on financials rather than on critical topics related to improving management and leadership itself. One example comes from our research on succession planning. We found that, even though today's organizations are most likely to vest responsibility for succession planning with their executive team, the rigor and metrics associated with succession planning tends to be frighteningly feeble.

First, fewer than half of organizations even have a formal succession plan. This is nearly unforgivable for a company of any significant size. If leadership is critical, succession must be managed in a professional manner. Second, although study participants confirmed that their organizations tend to use one or more metrics to gauge succession planning success, none of those metrics is embraced as a “must-have.” Overall, there's a worrisome underutilization of metrics in an area that helps determine the placement and development of leaders.

Yet, succession planning is not the only area where this is true—not by a long shot. We could provide various examples but, for the sake of brevity, I will offer just two more quick ones. In the area of employee engagement—which should always be on manager's minds—leaders are not held accountable for engagement, and they don't act like they are, either. A major i4cp/ASTD study shows that few companies say their leaders take (to a high extent) effective actions to improve employee engagement. Moreover, only a minority of leaders are held accountable for employee engagement to a high extent.

Then there's the issue of employee learning—which is pivotal to performance in today's talent-dominated economy. Many training professionals claim that their leadership is downright apathetic in the area of training evaluation data. It turns out that in lots of organizations such metrics just don't matter to leaders.

Insight #2: Leadership is getting—and will continue to get—more demanding.
There are various reasons for thinking that leading people will only get more challenging in the future, but let's focus on one of them here. In new i4cp research on organizational structure and spans of control, conducted for an i4cp-member company, we asked about the spans of control for vice presidents, directors and managers. We found that spans of control for each of those three groups have been widening. Bottom line: managers tend to have the same number of or more direct reports today than they did five years ago.

Given the severe recession and the tremendous numbers of downsizings that occurred as a result, this makes sense. But, we shouldn't overestimate the impact of that downturn. After all, when asked about the future, study participants were a lot more likely to predict that spans of control would continue to widen rather than shrink. In short, this widening phenomenon probably has more to do with a larger, long-term change in organizational structures than it does with a severe but defined economic recession.

So, if leaders feel stretched today, just wait till tomorrow when they'll be obligated to manage even more employees, many of whom will not feel they are getting the attention and guidance they need from their bosses. The essential productivity of leaders will need to rise considerably.

i4cp's 4-Part Recommendation:
1. Measure leadership.
Organizations need good talent management metrics, and leadership needs to pay attention to them because these metrics tell leaders how well they're performing. Our research shows, for example, that there are five key types of metrics that result in improved succession planning and, therefore, better leaders. One type, for example, is linked to business outcomes. Organizations should develop and track business outcome metrics in units managed by succession candidates. But keep in mind that a massive raft of metrics becomes impenetrable and useless. Choose a select group that are meaningful to the leader and company.

2. Hold leaders accountable based on those metrics. High-performance organizations are meritocracies. If there's no accountability attached to metrics, the metrics are inconsequential. Link metrics to the compensation and reward system when possible. Base promotion and other career opportunities on success in achieving specific, logical, meaningful goals.

3. Evaluate development programs. Don't rely on satisfaction surveys to gauge the success of leadership development initiatives. Leadership development is far too important and expensive to be taken lightly. Use empirical methods, looking for changes in skills, behaviors and business results.

4. Make sure leadership development includes a strong talent-management metrics component. Many corporate leaders are MBA graduates with strong financial backgrounds. But they often require further education in talent management in general and TM metrics in particular. They also need to be taught about how to increase and measure their productivity as leaders. Middle and line managers can learn about these principles by analyzing corporate data in a group-training setting and then formulating proposals as a result. High-level managers can work together to formulate leadership evaluation methods and metrics.

To learn more, visit www.i4cp.com

About the Author(s)

Mark Vickers, Institute for Corporate Productivity Mark Vickers is vice president of research at the Institute for Corporate Productivity (i4cp).