Why Leadership Development Feels Broken: And How We’re Fixing It

The market for leadership development solutions is enormous: more than $14 billion is spent by corporations and there are more than 70,000 books and videos on the topic. When we ask companies about their top talent issues, “improving our pipeline of leadership” always comes out near the top. (As of the last year only 14% of companies have a strong bench of leaders, two-thirds believe a new leadership model is needed, 64% also believe their top challenge is developing “next generation” leaders.)

Why is leadership such a burning issue?  Quite simply, companies now need a new breed of leaders everywhere. As companies become flatter and more dynamic, every professional or line worker is often thrust into a leadership position – whether it is as a supervisor, manager, or simply project leader. So leaders are younger and more common than ever.

When I look at the leadership models companies build today, they are now focused on leading in a network, driving results through influence, building an inclusive team, and staying close to customers in an environment with constant change and interruption. These are very different from leadership models of the past, which were largely focused on what I call “positional leadership.” (You lead through the power of your intelligence, title and job level.) Today great leaders drive change through their reputation, ability to empower people, willingness to experiment, and focus on developing people and their teams.

While all this feels different, in some ways it’s not. Great leaders have always been good at these things, they just took a back seat to the traditional model.

The Traditional “Old” Leadership Development Model

Many leadership strategies come from the iconic book “The Leadership Pipeline,” written by Ram Charan. In that book he describes five types of leaders, and details the slow, steady, upward sloping model that develops leaders over time.

Individual
Managing Others
Managing Managers
Managing a Function
Managing a Business (P&L)
Managing an Enterprise

At each level of this hierarchy, the story goes, you learn new things. When you move from individual to supervisor, for example, you learn how to manage and coach people. When you become a manager of managers, you learn how to budget and select leaders. As a functional or business manager, you need to learn how to budget, drive value, and increase profit. And as an enterprise manager, you have to learn how to operate a multi-functional enterprise.

In this traditional model we assume it takes decades to traverse this ladder,, so we used 9-box grids to identify who was ready for what. While I personally never was a fan of these approaches, the 9-box is still widely used because it helps us separate “performance” from “leadership potential,” which were always considered different things.

The funny thing about the 9-box grid is that it was often based on some weak assumptions. The first was that “potential” is defined as “ability to be promoted,” which typically referred to a managerial role. It never fully reflected the many types of “potential” we have (potential to sell more, engineer more, develop more) – but it did help us separate “performance today” from “potential to grow.”

I always believed that everyone has limitless potential, as long as we identified the various ways people could contribute. The 9-box limits potential to “ability to grow two levels in the company,” which of course is a self-describing limited idea.

Where did this come from?  It all stems from the original idea that we have “professional careers” and “managerial careers” which are different. In this model “managers” sat behind the desk and “managed” while professionals and staff “did the work.”

So we built career models that showed two different paths, with managerial roles going higher with better earnings potential.

career ladder, professional, managerial

Given this traditional model, leadership development was developed as a stepwise, architected process. As the following picture below shows, many of us went through “leadership development programs” which lasted years, and over time evolved from teaching us supervisory skills to teaching us about business, strategy, operations, and finance.

Today, of course, this is a silly idea – many engineers, production specialists, operations people, and sales executives make lots of money and add lots of value. These people may never want to go into “management” and we may be better off if they don’t. But leadership development assumed this path, so the training and development was based on this progression.

And what do we do about the 28-year-old CEO who runs a billion dollar company?  There are more than a few of these people, and they are often capable of doing just fine – if we give them the support to learn on the job.

I’m not saying the traditional leadership model is dead, but when companies redefine their business models every few years, creating new agile organizational models, and designing solutions around data and customer experience, this type of “long-form” leadership development doesn’t keep up.

Today The World Is Different: Very Different

Today I would suggest the world is vastly different. While many companies still have hierarchies (they are being simplified rapidly, HPE just reduced its managerial levels from 62 to about 15), the hierarchy no longer defines how work gets done. People work in cross-functional teams, they work on projects, and their influence can be vast regardless of their level – especially if they are technical or customer specialists.

And the idea that “leaders are more valuable than individuals” is over. Many companies now pay software engineers hundreds of thousands (to millions) of dollars if they’re superstars, and their managers may make much less. In fact in today’s world “everyone is a leader” at some point in their career, it’s just some of us that have “professional management” responsibilities as part of our job.

We also have to understand that the model of “getting people ready for leadership” is also an old idea. Leadership, like HR, is a “craft” not a “profession.” In other words, you learn it by doing it, through coaching and apprenticeship, and by learning and reflecting on your mistakes. All of us who have led teams remember the time we hired the wrong person, treated someone in an effective way, or set goals or directions that didn’t go as planned. And we learned over time how to be better and better – always reflecting that “the right leadership approach” varies depending on the situation, culture, and organization.

The idea that we could build a leadership pipeline through “development programs” and “a well-defined schedule of experiences” is no longer sufficient: we need to provide help through mentoring, coaching, and lots of external and internal exposure. In fact, in one of our most important studies of employee development we found that “exposure” was one of the most important factors in development. If you’ve never seen or experienced a person or situation, it’s hard to be ready for it!

As far as coaching goes, the DDI E-Y research shows that mentorship (or coaching) is one of the most valuable tools we have. This study found that organizations with formal mentoring have 20% lower turnover, 46% higher leadership quality, and fill roles 23% more quickly. So while we do need development paths for people, it’s even more important to give them development coaches!

All this means that leadership development today is much more like what happens in the military: we have to “throw people into the water” and “teach them to swim.” I believe the most effective companies now promote people into leadership before they’re ready, and then give them the tools and support to learn on the job, innovate with new ideas, and grow into their jobs in place. The idea of “waiting until someone is ready” just doesn’t let the organization keep up.  (And people become impatient.)

In my own Josh Bersin Academy, for example, we are designing development for HR professionals that covers all the new domains of HR so you can “learn them as you need them.” Yes of course you need to learn about HR operations, leadership, and consulting skills – but rather than take 15 years to develop those skills, we want you to learn them now – as early as you can. And then hone your “craft” through experiences, new assignments, and various different roles in different companies.

What Comes Next?  A New Approach: Four E’s of Leadership Development.

So how do we deal with this change?  A whole new approach is needed. Yes, companies still need to track business leaders and make sure there is a pipeline of leaders for every major role. But rather than channel people through this industrial “leadership development machine” like the model above, we need to do it in a more agile way.

Consider the fact that “learning to lead” is a long journey for everyone and we want to facilitate this journey in a strategic, mission-aligned way. I believe that ultimately it comes down to four key things, which I would say fall into four E’s. 

four e's, leadership development

The first is education, and this is where most vendors, academic institutions, and books are focused. Everyone in business needs education on business itself, the process of setting goals and developing people, and the product, service, and operational rhythms of the company. All this comes over time, but remember that being a leader means not just leading people, but getting work done. So the first thing is to make sure all leaders know “how to get things done” and “how to lead people.”

The second part of the journey is experience. You only learn to lead by doing it. As Colin Powell used to say, you can tell when someone’s a good leader because they have followers. Some of us are “born leaders,” but most of us learn it over time. Every time you lead a project, program, team, or operational solution you should be learning how to do it better next time.

The third part of the journey is exposure. The best lessons in leadership come from observing, talking with, and getting feedback from others. I spent almost two years early in my career as the executive assistant to the senior executive at IBM managing the western area. During that time I saw him in dozens of difficult situations and he often asked me to lead meetings or do projects to help him. It was one of the most important confidence-building experiences I ever had.

And the fourth part of the journey is evaluation. We used to use 360 feedback surveys (many still do) to give leaders very specific help. We all need a coach, a feedback tool, and often a psychological or other forms of assessment to see where our blinds spots are. As academics often say, there is a “curse of expertise” that we all experience – once we think we’re good at something we stop trying to learn. In leadership this is a terrible problem to face, so we all need ongoing coaching, feedback, evaluation, and sober advice to improve.

How do we do this in today’s agile, continuously changing companies? We need a whole new set of tools and practices to succeed. The traditional vendors (Korn Ferry, DDI, BTS, Vitalsmarts, LinkedIn) and academics (all the major universities) are filled with solutions for the first category. But once you move beyond “education,” you’re more or less on your own. And this is why leadership development is so difficult but also so exciting.

What’s Next? New Solutions Are Arriving

So how can companies build leaders faster? A new set of solutions have arrived, and let me mention a few here.

  1. BetterUp: Applying AI and Positive Psychology to Coaching (The Uber of Coaching)

The first company I want to mention is BetterUp, a company that has revolutionized the market for coaching. BetterUp started with the idea that positive coaching can be one of the most valuable tools for development, and built an AI-driven solution that lets any individual self-assess their coaching needs, and then reaches out into a network of trained coaches to find a set of appropriate coaches, lets you select a coach, and moderates and assists in an online or telephone-based coaching session.

Before BetterUp the coaching industry was a highly fragmented cottage industry (similar to the market for psychologists and counselors, which is being addressed by SpringHealth in the same way). Now with BetterUp, any company can buy into the network and all leaders (at any level) can set up coaching relationships with expert coaches aligned with their individual and the company’s needs.

The amazing thing about BetterUp is that it isn’t just a cool idea – the company has developed in-depth research and an amazing business that’s growing like wildfire. BetterUp recently received $103M in venture funding and is now valued at over $700 Million (far bigger than almost all the other leadership development companies).

Why the high valuation?  The BetterUp solution is one of the most innovative new answers to the “experience” and “evaluation” problems of development, and it’s easy to use, highly effective, and proven by research. The company boasts clients like AirBnb, Mars, Workday, Logitech, Warner Brothers, Capital One, and many more.

Not only does BetterUp connect emerging leaders to expert coaches, the app now also offers micro-learning, nudges, and other assessment tools to help you learn and improve. I have been an advisor to BetterUp for almost two years and the company’s science and focus on quality is impressive – today BetterUp has more than 300 employees and more than 1,000 coaches in its network.

You can read more about the company in an in-depth article here.

(There are related network-based leadership coaching solutions I’m pretty excited about too, like Bravely, Lumen, Leaderjam, Coach.me, and Everwise, but none has been able to keep up with BetterUp.)

  1. Immersive Learning: STRIVR, Mursion, VantagePoint, and others

The second category of groundbreaking new solutions for leadership is the fast-growing category of VR-based solutions (aka immersive learning) for softskills. (If you’re not familiar with immersive learning read this article.)

Considering the model above, in the world of leadership we need to give people face to face coaching, feedback, time for reflection, and opportunities to make mistakes. But rather than make mistakes in the heat of battle, why don’t we give them time to simulate the difficult situations? (This is what airline pilots do!)

Well, an amazing set of VR tools is now available to do this. STRIVR labs, the leader in the market, has now been delivering softskills (interviewing, difficult situations, hostile encounters) training for several years and has perfected the experience. I’ve sat down and experienced STRIVR simulations and it gave me tremendous insights into my own tendency to avoid confrontation in difficult situations (a challenge I’ve been working on for many years).

Mursion, another pioneer, uses virtual avatars to present real-life situations, which are actually monitored and hosted by coaches. It is a virtual coaching system that uses real coaches but avatars to provide scale and relevance (ie. You may see an African American employee confront you with an issue if you want to learn how to manage a diverse team). I’ve experienced Mursion also and it did make me sweat (and learn).

A third company pioneering these kinds of “in-the-flow of work” learning solutions is Vantage Point, a company that has built VR programs for a variety of topics including diversity, management, teamwork, harassment, and other difficult skills that are hard to teach in a classroom.

  1. New Action Platforms from Glint, CultureAmp, BetterWorks, Reflektiv, Humu, Kazoo, ADP, and Others

The third category of new leadership development solutions is the new breed of performance management tools coming from vendors like Glint, BetterWorks, CultureAmp (Zugata) and others. These companies are building agile goal-setting and performance management tools that not only build real-time 9-box grids and other potential models, but they are moving beyond performance management to real solutions focused on performance development. 

I like to call them “action platforms,” because they are designed to help you “take action.”

As I discuss in the article Continuous Performance Management:  Innovation Reigns, this new breed of performance management tools goes way beyond forms for performance appraisal. Not only do they help employees and managers set goals, share progress and results, and assess performance and potential, they now include built-in survey and AI-based assessment tools that let employees evaluate managers and give managers direct feedback.

continuous performance management

Zugata, the technology company recently acquired by CultureAmp, collects data from peers on your strengths and weaknesses (Compass from ADP also does this) and gives you developmental tips (like a 360) on a real-time, positive coaching basis. As I described in a recent webinar, these tools are shifting from “performance and feedback” systems to “action platforms” that give you as a leader direct feedback on ways to improve. Glint even collects real-time data from employee surveys and gives managers their own coaching dashboard with links to micro-learning. BetterWorks and others are working on the same.

These platforms are not leadership development programs per-se, but in many ways, they’re better. They focus on the “experience” part of learning, by giving managers (and teammates) direct feedback in the flow of work – driven by data collected from employees, peers, and others you work with every day.

  1. The wide world of self-directed learning and coaching tools.

Finally, we are now flooded with tools, platforms, and content providers that deliver many types of self-directed learning. These include platforms like LinkedIn Learning, Udemy, Skillsoft, Novoed, Harvard Publishing and emerging vendors like Hone. Hone is a particularly interesting company because it was founded by a tech entrepreneur and he has brought together a network of highly skilled leadership development experts in an online, live learning experience. You can assess your skills and sign up for real-time Hone classes at your desktop and gain access to world-class instructors and coaches in the flow of work.

Bottom Line:  You Own Your Leadership Program

A new set of options are here. Data-driven tools can now assess your strengths and weaknesses, connect you to coaches, and give you nudges and tips. You can practice and simulate difficult situations with life-like reality. And we as managers and team leaders can get feedback in the flow of work.

While the traditional approach to leadership development has not gone away, now is the time to recraft your approach. Talk with your executives to talk about the leadership values you want to reinforce, then embed them into your performance, development, and succession conversations.

The topic “leadership development is broken” may be a conversation for years to come. But the most important thing now is to “let go of the past” and move beyond episodic solutions to develop skills on the job, in the flow, and in the real world wherever possible.

And let me conclude with one final point. None of these ideas, tools, or platforms will work unless your top executives agree that developing and coaching leaders is a critical part of their job. Make sure your CEO and other leaders take this problem seriously, put time into coaching and modeling leadership, and let people “fail and learn on the job,” move from role to role, and learn to lead in the 21st century as fast as they can.

Given the frustrations companies have building a robust leadership pipeline for the digital age, now is a good time to rethink the approach and focus on leadership development “in the flow” for everyone throughout your company.

PS. If you really want to dive into these topics, join thousands of your peers in the Josh Bersin Academy, where we are discussing the future of leadership and performance management right now!