Leadership development needs to deliver more than just support for managers through transitions of responsibility, the enhancement of specific skills and competencies, or information about core values.

Entitlement, Elective, or Enterprise

Some companies build their leadership development strategies around an “entitlement” culture, which means they provide a program at each level of leadership. Meanwhile, some strategies have elements of an “elective” culture. This is when leaders sign up for programs to check boxes around a competency model that is focused on making them more effective in specific disciplines and behaviors. Instead, a more effective leadership development strategy should be designed around an “enterprise” culture, where interventions have a more integral and value-oriented purpose.

Examples from two contrasting accounting firms illustrate this idea:

• Firm A has signature programs that every leader attends, depending on their level within the organization. These programs are designed to make participants better leaders by exposing them to challenges that they will likely experience during their newly acquired responsibilities. Typically, these programs are generic and built around plenaries and simulations.

• Firm B has programs for different levels of leaders. Programs are focused not only on developing current capabilities, but also on assessing capabilities for the next level. In addition, programs offer action-based learning opportunities that focus on adding specific value to the organization through projects and working groups. Each program is tailored to a specific level or type of leader, and uses internal leaders as teachers to ensure applicability to the real work managers must accomplish.

Measure Value, Not Just Cost

It is essential for any investment in leadership development to have thoroughly thought out its intent and value proposition to make programs fit for purpose. The investment associated with leadership development needs to increase the value of the leader to the organization, not just add to its cost—a subtle but important difference. It also should add value to the organization itself!

In the example above, Firm A only evaluates programs based on Kirkpatrick Level 1 parameters, which is immediate participant feedback on their learning experience. Firm B, however, evaluates participants at Kirkpatrick Level 3, which focused on assessing changes in performance and behavior and monitors. Firm B also examines Kirkpatrick Level 4 (impact on results) throughout the lifecycle of development. This contrast illustrates a very different intent and focus.

Business Drivers vs. Competency Models

Often, the reason why leadership development fails to focus on the enterprise is because talent development professionals and other program stakeholders start at the wrong place when designing the strategy. What’s more, talent development execs may even be isolated from the business. That’s a problem because a leadership development strategy must always derive from the business strategy.

A leadership development strategy built around this rationale will look very different to one built around a theoretical or best practice approach. For example, it will be constructed explicitly around the enterprise drivers and metrics rather than a competency model. It will have measures that align to the enterprise scorecard. It will be designed in a way that reflects agility, application, and transformation. No doubt, such metrics and alignment will make the C-Suite more likely to sponsor it.

A leadership development strategy needs to address enterprise challenges that will fundamentally benefit its performance and profitability. Let’s look at two more examples:

• Firm Y requested a leadership program that focused on developing frontline leaders. This was the strata of leadership that the board believed needed the most attention. Behind this rationale was a catastrophic incident in which the actions of a frontline leader led to the multinational corporation incurring massive costs to rectify a major failure in its operations. When asked what attention was being given to the executive level of leadership that had allowed a culture of non-accountability to develop over time, the answer was, “None.” Putting a finger in the dyke is not a leadership development strategy, but fixing the dyke will deliver lasting change.

• Firm Z requested a leadership program focused on developing the top 60 leaders. The enterprise had an ambitious growth strategy and believed that these senior leaders were the most critical group of individuals that would enable delivery of this growth. Rather than implement an individual program, the consultant designed multiple assessments, coaching, development interventions, and embedded evaluation to address the development of these senior leaders.

Bottom Line

Designing an enterprise-focused leadership development strategy requires talent development professionals to think like business owners. This will ensure that their contribution is integral to the business and delivers bottom line growth.