3 Ways Most Modern Businesses Are Lacking In Leadership Development

Posted by Roger Ryall

Leadership is a key ingredient in achieving business success. Strategy, resource-availability, company culture, and commitment are all important components of a business’ success but without the right leadership, those aspects cannot be effectively directed towards the right goals.

This is why poor leadership is so costly, and how strong leadership can elevate the smallest business into an industry juggernaut.

Despite strong leadership being accepted as a key part of any successful project, there are three ways in which modern businesses fail in leadership development.

1) Lack of leadership investment

Strong leadership is a critical element of business success. Therefore, it’s extremely short-sighted that only around one-quarter (25%) of organizations invest heavily in leadership development according to the 2015 Brandon Hall Group State of Leadership Development Study.

Most of the organizations the study surveyed have some form of leadership development program in place, but it is not treated as a priority. More troubling, however, is that the study found that more than one-third of the 242 companies surveyed (which spanned 32 countries and 27 industries) were below average or poor in the area of leadership development.

In fact, a little over half (51%) of organizations said their leadership is not at all ready to lead their organizations today. The future doesn’t look much better as almost three-fourths (71%) said their leaders are not ready to lead their organizations into the future.

The study identified coaching as the biggest gap for most leaders with communication, resiliency, critical thinking, collaboration, and data analysis as other essential skills for most leaders and with a significant gap in mastery.

2) Lack of diversity in leadership roles

When asked if diversity in senior roles is important and a contributing factor to business success, most businesses will say yes. This is because, as research has shown, companies with a higher participation of women in decision-making roles generate higher market returns and better profits.

Despite the advantages workforce diversity brings to managing performance however, almost one-third (33%) of businesses globally have no women in senior management.

The worst performing region are the G7 countries of Canada, France, Germany, Great Britain, Italy, Japan, and the U.S who have almost four out of ten businesses with no women in senior management positions. In fact, only 22% of senior roles are occupied by women, and incredibly, 39% of companies in this region have no women in senior roles. Japan and Germany are the worst performing individual countries as they only have 7% and 15% respectfully of senior roles held by women.

This is another area of opportunity for many businesses as a diverse workforce time and again, as CEO Sacha Romanovitch says “outperforms their more homogeneous peers and are better positioned to adapt to a rapidly changing global business environment”.

3) Lack of millennial leadership development

Millennials are set to represent 75% of the global workforce by 2025. That’s three-fourths of every business, and industry. Yet, a meager 20% of organizations see the millennial leader segment as critical for development over the next 24 months.

On average, just 7% of organizations are invested in offering millennial coaching, mentoring and dedicated time with their C-level staff and senior leaders.

The reason for this has to do with the aforementioned overall lack in leadership development, and in the case of millennials, there are also the negative stereotypes associated with this generational group.

It’s true that millennials are less inclined toward employer loyalty, but it ties again into the general lack of investment a majority of companies place into individual development.

With 36.8% of the Canadian workforce already composed of millennials, this lack of investment is a major missed opportunity for businesses to future-proof their leadership.

A strong leader can set direction and help their projects and other to move forward. They create an inspiring vision, and then motivate and inspire others to reach that vision. This is something worth investing in, not just with words, but with the necessary strategy and resources that such a key aspect of success merits.