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Eliminating the Four Flaws in


Each year, corporations invest billions of dollars in leadership development and tout mantras supporting their efforts: “We must invest in our best people so that they can grow and develop.” “We have to build the talent pipeline within our organization, rather than rely too heavily on outside hires.” “If we don’t provide good development opportunities for our best and brightest, we will not be able to retain them.” One factor driving this investment is the skills gap—the notion that many key positions remain unfilled for lengthy periods of time because of a mismatch between the skills required for the job and the skills available in the market. Many executives have expressed views quite similar to those above in recent years, and many corporate leaders have put their money where their mouth is. Companies have tried to make up for the job-market deficiency by investing heavily in learning and development. And several thousand companies around the world have established their own corporate universities. Given the allegiance to investing in leadership development, why aren’t these investments in talent development working?


THE POOR RETURN ON LEADERSHIP DEVELOPMENT According to research from Bersin by Deloitte, companies spent roughly $17 billion on leadership development in 2014. The consulting firm reports that companies have increased their investments substantially in recent years, in part because they are finding it difficult to recruit talented people with the requisite skills and capabilities for their organizations. Unfortunately, the investments aren’t paying off, and many firms are not pleased with their returns. Korn Ferry, a leading executive search firm, conducted a survey in 2015 of more than 7,000 business leaders around the world. The survey found that 55% of the executives were displeased with the results of their firms’ leadership development efforts, rating them “fair” to “very poor.” Furthermore, Gallup reports that a majority of American workers are either not

AMA Quarterly Spring 2016  

Journal of The American Management Association

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