Why Leadership-Development Programs fail: A Contrarian View

In a recent article, Pierre Gurdjian, Thomas Halbeisen, and Kevin Lane of Mckinsey outlined the reasons why leadership development programs fail. Some salient aspects: $14billion is spent in such programs. 67% of Companies rank leadership development as the first three human capital priorities. 30% of CEO’s believe they lost international business opportunities because of poor leadership. Only 7% of the companies say their programs are effective.

Top business schools charge about $150000 per person for such programs. Training of leaders is a big business, and the trainers are often profit led.

Wow, 93% of such leadership-development programs fail and yet companies still continue with such programs. With such appalling results, why do people try to look at seemingly obvious reasons for failure and are unable to reduce the failure rate?

If you couple this appalling training failure to the American Customer Satisfaction Index or  ACSI score which has not improved in the last 20 years, since 1995 (score 74) to 2014 (score 76). What does it tell you? What does your leadership training do? It is failing in getting our leaders to be customer focused? The customer is the real reason for a company being successful or not.

The companies’ consultant advisors keep pushing them into new leadership-development programs, with new ideas like lets have programs that focus on companies needs and teach potential leaders how to manage two or three needs

Other reasons for failure had to do with reflection vs. hands on training. The next was measuring the result of the programs, and perhaps the most important was underestimating the mind-set.

Unfortunately, it is not the mindset of the leader trainees but the trainers (Ask yourself, if there is only 7% success, either selection of potential leaders is a problem or the trainer is a problem: he is teaching the wrong thing or the wrong way?)

As a contrarian, I am against training. I am for education and self-learning through reflection, catalyzed by the teacher, to help leaders understand how to create value, and for whom.

Obviously value is to be created for the employees (not mentioned in the article other than to call leaders employees) and the customer. The customer is mentioned tangentially as ‘hunting for customers’ or for joint ventures in the article.

The mind-set is most important, but again they are looking for a ‘leadership’ mindset not for a ‘customer’ mindset. The current leadership-development mindset is an inside point of view and not an external focus.

I think our current trainers have to unlearn, before they can teach new things. The leadership candidates have to unlearn all the gibberish on day to day stuff they have learnt, such as the leaders role is to administer and to bring in efficiency, and profits (these are the minimum the leader has to do, but he has to go beyond to create value).

They need to concentrate on becoming Customeric and creators of value and not silent destroyers of value.

Potential leaders need to develop a customer mindset.

And as they reflect on this in their leadership self-development, they will soon come to a conclusion that they are in a people business, and they need to work with both internal people (partners and employees and unions) and external people (customers whom they need to internalize).

Such people businesses understand changing social needs and the social media, and the changing world.

They understand the value of creating employee value. And they then develop or find specialists to aid them for tasks such as acquisitions of companies (for customer related needs), or to develop or innovate new products that customers can relate to, or services that wow customers, and to find joint venture partners or new markets that are useful to customers.

This then is the mind-set we want to inculcate. Forget whether we should make the leader aggressive (and if his mindset is mild, to change that) or to make his mindset innovative (even if he is a person that focuses on efficiency or stability) or to make him an internationalist.

Get the potential leaders to focus on people, particularly customers and to find specialists who can help him with processes and systems, acquisitions, cost cutting, increasing prices etc., entering more lucrative markets, finding talent etc. Do not make him the one who does this but one who can lead and create value for the benefit of the customer, the employee and the company. This is true leadership-creation.

Your comments are welcome!

Gautam Mahajan, President-Customer Value Foundation
M: +91 9810060368
Tel: 11-26831226, Fax: 11-26929055
email: mahajan@Customervaluefoundation.com
website: http://www.Customervaluefoundation.com

Customer Value Foundation (CVF) helps companies to Create Value and profit by Creating Value for the Customers, employee and for each person working with the companies.

Total Customer Value Management (Total CVM) transforms the entire company to focus on Creating Value for the Customer by aligning each person’s role in Creating Customer Value and getting shareholder wealth and Value.

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