What connects leadership to value?

Written by
Changeboard Team

22 Feb 2016

22 Feb 2016 • by Changeboard Team

As 2016 is now well underway, organisations are looking to leadership development to prepare their leaders for the challenges of the year ahead; preparing leaders to be agile, to innovate and to lead change and drive growth within a context characterised by disruption. Leadership challenges are increasingly difficult because so many interrelated disruptions, such as the need to drive digital transformation, change in regulation and new workforce models, are occurring at the same time. Is leadership development ready to equip leaders for the reality of what it takes to lead today?

Mercer research, Connecting Leadership To Value, 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. Whilst interesting, this finding is not a surprise. The rhetoric around leadership development in recent years has focussed widely on why leadership development is not working. Furthermore, the search for leadership development that does work, too often looks at ‘how’ leaders are developed; following the latest trends of social learning, learning technology or trying to make 70:20:10 work. Mercer’s research instead highlighted a need to step back from ‘how’ leaders are developed to bring leadership development back to reality, uncovering four questions to connect leadership to value. 

1. Why are we developing leaders?

Effective leadership development begins with clarity of the business imperatives that leaders are responsible for delivering. Mercer asked organisations what their leaders need to be able to deliver. Their response? An organisation that can grow (83%), innovate (71%), and respond to globalisation (55%). With the current levels of disruption surrounding organisations, delivering success is only becoming harder. These challenges represent a wider issue of leadership inertia. 

2. What are we actually developing?

A clear view of the business imperatives needs to be translated into talent needs; defining what is expected of leaders at each level. Whilst 62% of organisations have a leadership strategy, only 27% include a business case. The chain of leadership development therefore is disconnected between leadership needs and how they deliver value. Furthermore, organisations often create the perfect competency framework to define what great leadership looks like. But leadership extends beyond competency into the impact that leaders make in their context. 

3. How are we developing leaders?

Organisations recognise effective learning mechanisms, but either aren’t using them or aren’t supporting them to thrive. The top-rated interventions in terms of effectiveness are not being exploited by the majority of organisations: challenging assignments (65%), overseas assignments (40%), and rotational experiences (36%). By contrast, 63% use face to face and 41% use online learning, which are recognised as the least effective interventions. The wealth of academic research into how we learn and how leaders develop is providing fresh insights into leadership development. The new rules for leadership development are collective, on-the-job and leader-led, turning leadership development into an ongoing experience rather than a programme.

4. So what?

Eighty one percent of organisations indicate that they do not measure the return on investment of leadership development. With the high levels of spend associated with leadership development it is unusual for an investment to exist without further scrutiny. Whilst the ‘so-what’ can appear at the end of the chain, it is embedded in the business imperatives that were defined upfront. 

As you plan leadership development activity in 2016, check that the chain is set up to connect leadership to value. 

WHY: Select the measures to track leadership impact on business performance and human capital.

WHAT: Redefine the leadership contribution to today’s and tomorrow’s challenges using behaviour, impact, and context.

HOW: Ensure leaders are accountable for developing future leaders — incorporate collective learning, continuous self-reflection, and on-the job experiences.

SO WHAT: Use the measurement data to evidence change to the business and continuously improve your approach. 

Read more here: http://www.uk.mercer.com/insights/focus/connecting-leadership-to-value.html

By Lisa Lyons, senior associate and Anna Tweed, associate, Mercer’s talent business.