According to a 2019 Harvard Business Review article, 25% of leadership development programs yield positive results. This equates to a spend of $120 billion every year on ineffective leadership training, resulting in leaders lacking the necessary skills to execute their job duties. The impact can cascade through teams, potentially creating toxic work environments and dissatisfied employees. Arriving at a clear picture of what distinguishes the best platforms and offerings calls for a look back at professional development’s origins in the broader scheme of human learning.
Leadership Training Models
In the 19th Century, German psychologist Hermann Ebbinghaus discovered the forgetting curve. According to his study, human beings can retain and recall 25% of the information they’re exposed to in a 24-hour period. That retention diminishes over time, with only 10% of learning retained within the first year. So, what does this mean for learning strategies and the efficacy of leadership development programs? The usage of learning models needs to be revisited.
Leadership styles. Leadership studies have evolved from trait-based analysis to value-centric leadership profiles. The purpose of current leadership research is to uncover the behaviors and values of those leaders who positively impact organizations. As seen through our extensive research, companies often select leaders with a particular style to fit their industry and corporate requirements. Some companies then invest time and effort to strengthen and further develop leadership capabilities.
However, as leadership development is still in the early stages of research application, learning and development practitioners most often follow an experience-based method to educate future leaders. In other words, the common solution is a stand-and-deliver, lecture-based event without any follow-up, learning model, or strategy for ongoing support. This approach rarely produces the intended results of organizational performance improvement. To ensure learning efficacy and to allow the programs’ educators to teach adequate domains to develop new leaders, a learning model-based approach is needed.
Approach to leadership training. The nuanced requirements of an impactful leadership development program ladder up to a compelling experience. Education requires learning new behaviors, which is very challenging for most human beings. The automatic cost-benefit analysis system in the human mind evaluates every learning and change opportunity based on current and imminent problems. Is the lesson addressing or solving an existing challenge? Or is it more like an investment in potential opportunities in the near future? In both cases, the intrinsic motivation to learn is informed by the presence of real-life, concrete problems and seeking a novel approach to solve them.
Malcolm Knowles and Richard Feynman are two key researchers who discovered that adult learners are more likely to acquire new knowledge, continue their quest to learn, and even practice the learned behaviors if the teaching follows a certain structure. In 2016, Michael Beer, Magnus Finnström, and Derek Schrader said leaders and managers who go through leadership training programs acquire new behaviors but often can’t sustain them. They theorized that leadership training programs’ design, delivery, context, and consistency all play a significant role in solving this critical and longtime problem.
We have direct experience with high-efficacy results through their shared work with the leadership development platform Dream See Do (DSD). Currently, thought-leading training and coaching providers are utilizing the features of DSD as the backbone of their virtual and blended work for corporate training. In one such example, DSD client Goleman EI (a leader in providing expert training for employees and teams in emotional intelligence, or EQ) leverages platform and design support to activate its fully reimagined virtual and blended training experience. This approach is helping the company to transform leaders’ self-awareness and EQ in practice, thereby having a profound impact on its businesses. This type of training model results in 450% better engagement than industry averages.
The Connection, Practice, and Reflection (CPR) model, as shown in Figure 1, requires leaders to connect with associates in an organization very well and lead by example to ensure high levels of participation, engagement, and motivation. The DSD learning model starts with a “connection” paradigm to set the tone of leadership development. DSD’s learning platform is built to allow various forms of practice as well.
As the digital system is flexible to set and reset, learners can adapt the “practice” to their learning styles or the benchmark best-in-class practices. This feature is valuable because learners prefer to choose how they learn.
“Reflection” is the last element of DSD’s learning flywheel, which supports both learning efficacy and the establishment of deep connections among associates. Recent neuroscientific research supports the value of “reflection” for learning purposes. “Synaptic plasticity” is the term describing the creation of new synapses in the brain through social interactions and discussion of specific topics. This phenomenon is unique and valuable in an online and hybrid learning platform because a simple process of thinking and listening to others significantly increases new learnings.
As highlighted earlier, technology can be leveraged to vastly improve the efficacy and return on investment (ROI) of blended leadership training and coaching. There are other platforms on the market that have different modalities for learning, such as LinkedIn Learning’s passive but massive volume of content and innovative business simulation companies like BTS, that simulate real-life experiences as part of the training process. With depth and breadth of options, the challenging part is threefold: (1) determining how to select the right learning platform, (2) identifying the best methodology and approach for deploying this system, and (3) tying learning goals to company strategy and leadership growth objectives.
Currently, vendors supplying learning management systems and learning experience platforms are abundant, and each company is specialized in specific ways to serve their clients. In an ideal state, these systems should be designed and built to adapt to clients’ training needs to create an engaging learning environment that keeps employees excited to acquire the necessary skills to operate efficiently and creatively (for more on this, see Relational Leading by Lone Hersted and Kenneth J. Gergen). The best-in-class corporate learning platforms on the market prioritize innovation, motivation, and product excellence over sales, user volume, and profits.
Some systems are clunky and awkward to use or have very limited capabilities. They lack the features necessary to create an engaging learning experience that will motivate participants during their learning journeys. They may also lack the essential elements for learning that sticks: connection, practice, and reflection. The book Make It Stick emphasizes the importance of adequate practice by inquiring about what’s been learned. To improve learning outcomes and ROI, current platforms would benefit from modern tools for group and peer interaction, coaching sessions, mutual support, and facilitated learning.
Many well-known learning platforms offer automation and intelligent reporting capabilities to save time and prove ROI. As departments such as human resources (HR) transform to become more strategic and more Millennials become managers and leaders, the demand for impactful personal growth and professional development opportunities is increasing. Learning and development and HR departments need easy access to a range of high-quality leadership training and coaching to ensure better performance, employee retention, and engagement. The next generation of learning platforms has started to emerge with both learning-engagement features and rich automation and reporting.
Enter: Large Learning Models
With the recent proliferation of generative AI and large learning models (LLMs), technology will continue to play an important role in leadership development. As with the other functionalities mentioned previously, it will be critical that learning platforms employ the use of these newer AI-powered tools in a human-centered, ethical, and thoughtful manner. There are proven methods and approaches to deploy technology in powerful ways to enhance, concretize, and track dynamic leadership development experiences. Finance professionals can partner with HR team members to determine if the leadership development program that’s been budgeted for will actually yield new behaviors.
Curriculum of leadership domains. For much of the 20th Century, the level of industry competition was a significant variable in the strategic analysis of a company and its performance projections. The incumbents competed to obtain more of the existing customers’ business, while new entrants targeted that same customer base to get a foothold. This dynamism fueled various forms of innovation and drove many countries’ economy to new heights. Most industries previously isolated to national territories before the 1990s became exposed to global companies after the end of the Cold War and the dissolution of the Union of Soviet Socialist Republics (USSR). Dyson, IKEA, and ING are some examples of European companies that penetrated U.S. consumer markets, and major American companies set up operations in China, India, and Southeast Asia.
Today, the share of S&P 500 companies’ international operations accounts for 40% of their total revenue (see S&P 500 2016: Global Sales). This complex and challenging global landscape required many companies to train their senior leaders in rapidly changing global business practices and cultural differences crucial to conduct effective operations and to stay competitive in response to volatile, uncertain, complex, and ambiguous (VUCA) circumstances.
As international and local competition intensified drastically since that time, organizations developed different ways of innovating products, processes, and management techniques to sustain their market presence. In that context, leadership competencies became an even more vital piece of this formula, and companies had to begin to invest in managerial training and leadership development to energize the workforce and improve their innovative performance.
As innovation requires significant interactions among an organization’s personnel, collaborative skills have become valuable for achieving a high level of employee ownership and engagement, which indirectly fuels innovation. However, innovation management is risky and complex because of unknown factors and uncertainties. It requires a significant amount of leadership skills to activate the potential human capital of an organization.
Additionally, innovation is no longer restricted to inside of the company but rather has shifted to more of an open-process form. Consequently, managers must acquire and develop capabilities to lead and influence other professionals from different companies and organizations. In one of our experiences, an organization invested several million dollars in upgrading its enterprise computer system. Senior management was under pressure to increase profitability to the next level because of an increased asset base. The solution required advanced leadership skills to discover what service was valuable to customers, capturing data and metrics to monitor service performance and engaging customer-facing employees to deliver on the strategic plan’s promise.
Learning Models for Value Creation
The ability to seize the opportunity and energize the workforce to accomplish a novel business outcome can be accomplished in the presence of impactful leadership practices. A comprehensive leadership curriculum that thoroughly understands strategy, social capital, and employee interactions is essential for value creation for all stakeholders.
During a leadership development consulting engagement with a British company, one of the authors of this article, Jeremy Berman, planned a hackathon with the company’s renowned outdoor apparel client, REI. A hackathon is a short and engaging sprint during which teams conceive and prototype new product and service ideas. The goal of this particular experience was to help coach the leadership team on agile EQ practices while simultaneously getting them to connect more deeply with its core teams in a fun and motivating environment. During this hackathon, leadership and the core teams worked hand in hand to create mobile app prototypes for future product ideas.
All roles were a vital part of this process, especially the role of the finance team, which helped to determine the viability of these product ideas while directly seeing the ROI for the leadership development consulting that Berman and his team deployed. By creating a modern way for senior leaders and managers to more intimately connect with their teams, share ideas, and set expectations, leaders gained insights into their core employee needs while learning and practicing new skills on the fly. Reflection exercises were held for weeks after the event, and all of the outcomes were codified on the company’s project management system.
In this context, a leadership team can learn and practice new soft skills in the flow of work while building tighter camaraderie with its core team members. For REI, all of this resulted in improved company morale and two product ideas being brought all the way through to production. Further, technology was effectively used as a central hub to store new strategies and blueprints for exercises in group practice and reflection.
Training and coaching platforms such as DSD are designed to deliver various leadership competencies in a range of experiential manners. The unique tools include industry, organizational, and individual assessments to build the right combinations of leadership development programs. Program delivery can be reviewed and assessed to ensure high-level efficacy and applicability. As you think about ways that your teams can engage in powerful and contextual leadership and management exercises, consider how your colleagues will choose the right type of program and the right technology to properly support that program. The latter will help you measure the ROI (both financial and behavioral) of a program when it’s chosen thoughtfully.
Learning modalities: blended training. Previously, most leadership development programs and staff training courses have been delivered in-person, face-to-face in a group setting. Limiting development opportunities to this approach only will increasingly present significant challenges in the current work environment because of time constraints and logistical considerations.
Further, program developers no longer realistically expect employees to travel from various locations to convene for training, particularly when it’s impractical, expensive, and unnecessary. Learning platforms have developed and grown to a level where blended learning can be delivered successfully. DSD and other platforms such as Thought Industries, for example, have experimented with blended training for several years and have observed significant improvements in learning.
Modern learning models afford the opportunity to allow self-learning and discovery that’s truly engaging to introduce new material and content. Most adult learners have been exposed to learning content through education or on-the-job experience. When the material being introduced is fairly new, it’s productive to allow individuals to absorb it on their own during the initial steps of the learning process. This is also good practice, as leaders need to acquire the habit of self-development.
The material must be delivered in a compelling manner and tied to the accounting and finance leader’s work stream and strategic objectives. We have seen that automatic supportive reminders or notifications through your learning platform of choice, in addition to having ways to connect, practice, and reflect, are key elements of a successful program.
The second crucial point is that the content should be delivered in a thoughtful cadence. According to researchers on learning efficacy, recall strength (the ability to remember new information) increases significantly when new learnings are spaced out. Allowing hours and days in between learning sessions increases retention and, therefore, the formation of new cognition. Of course, all new learnings must be further explored and practiced in various ways for cognition to occur fully in the mind.
The most recent empirical experiment conducted on the effect of spacing out learning revealed very practical and useful information. In 2008, University of California San Diego researchers devised an experiment with more than 1,000 test subjects. Researchers inquired about two unknowns: time to test and first study interval.
As shown in Table 1, if learners need to explore what they’ve learned, the optimum learning interval is one to two days. If it’s one month, then weekly studies are more useful. Using this type of knowledge, we recommend against cramming more complex leadership competencies exclusively into onetime, in-person seminars or forcing too much material too quickly on anyone. Leveraging a range of modalities across a well-planned, longitudinal experience over time will be better received and net stronger outcomes for deeper dives into learning.
Benchmark before Launching an Initiative
As a finance professional, you’re likely accustomed to benchmarking your company’s performance before you approve any expenditures. The same discretion can apply to leadership development program investment. A simple way to begin to evaluate the ROI of these essential expenditures is to look at a few key metrics that can be correlated with effective leadership and managerial development.
For example, the number of new initiatives that were implemented after the completion of the program would be an excellent place to start. Then you can determine how these new initiatives are expected to increase revenue or save operating costs. It’s critical to isolate the new initiatives that were formulated after acquiring the most recent leadership competencies.
The need for comprehensive leadership skills in the workplace is more prevalent than ever, as are the challenges of developing these skills via virtual training. We recommend that senior executives and future leaders study the DSD and CPR learning models and the corresponding digital learning platforms. They’re rooted in feedback and insights from a range of industries and disciplines, including accounting and finance professionals.
Holistic leadership competencies are crucial to deploy well-orchestrated strategy-execution initiatives. As a finance professional, you have the responsibility to steer your organization in the right direction, which certainly includes this significant opportunity to influence the leadership and management development investment.
Table 2 provides a starting point with factors to apply in evaluating a leadership development program. What is your favorite approach to leading an initiative of change at your company? Who are the critical partners whose support you need to obtain? What do you need to do to bring this topic to the forefront of the management team’s priorities? The best next step is to keep asking these critical questions.
November 2023
