Global Businesses and HR Leaders Are Failing to Deliver Future Leaders

Given constantly changing market dynamics, new technologies, shifting government regulations and evolving customer expectations, leaders must understand and respond effectively to seismic shifts that affect their businesses. Traditional leadership development programs are failing to deliver collaborative and visionary business leaders, according to new research from Bersin by Deloitte entitled “High-Impact Leadership: The New Leadership Maturity Model.”

Based on responses from global business and HR leaders across industries, Deloitte’s research finds organizations that build a context for leader growth — including systems, processes, cultures and practices to support leaders in their daily development — generate better business and talent outcomes than those which rely on traditional leadership programs alone. Furthermore, organizations that adopt the new systemic leadership maturity model have 37 percent more revenue by employee and are twice as profitable as compared with organizations that focus only on formal leadership programs. These organizations are also three times more likely to innovate and six times more likely to produce leaders who are collaborative and provide vision and direction than peer organizations that rely solely on traditional leadership development programs. However, 75 percent of organizations surveyed find themselves at lower maturity levels, focusing primarily on formal training programs as the only means of building leadership talent.

To create the right context for leadership growth beyond formal training, the new research-based leadership maturity model from Deloitte’s High-Impact Leadership report identifies multiple important practices organizations should implement. In addition to communicating what it means to be a leader, some of the most critical practices for building a context for leadership growth call for organizations to:

• Communicate the leadership model and expectations;
• Foster a climate of risk-taking for leaders;
• Extend knowledge-sharing for leader development, internally and externally;
• Expose leaders to other organizations, industries and challenges; and
• Create strong ties between HR and business to identify leader development needs.

The figure below breaks down the three factors and 17 dimensions of Leadership Maturity described in the research:

Integrated programs designed around these practices will help organizations create a context for leadership growth and the ability to set strategic priorities. Evidence-based, specialized leadership frameworks enable businesses to use leadership development to drive business growth. For instance, Xerox is piloting a program in which millennial mentors and senior executives meet once per month, one on one, to exchange opinions and viewpoints on topics related to both work and life, leading to greater understanding of the other generation and the changes that affect them both.

While formal leadership programs remain important, this latest research underscores the need to utilize the organization as a system to develop leaders in their daily context, and expose them to sources outside the company that can accelerate their development. The resulting improvements in innovation, collaboration and financial performance demonstrate the value of this contextual approach.

Anthony Abbatiello is a principal in Deloitte Consulting LLP’s Human Capital practice and is the global leader of Deloitte Leadership, which helps organizations address constantly evolving business challenges and diverse employee expectations to build leadership pipelines and programs for emerging, next generation, and senior leaders.

Abbatiello specializes in leadership development, culture transformation, and HR strategy. He has led industry and functional human capital practices, provided thought leadership, and developed practitioners to deliver business results to clients. He serves global clients as a senior advisor in leadership development, talent strategy and digital HR.