Stop Wasting Your Money on Leadership Development

Stop Wasting Your Money on Leadership Development

Wasting-money-on-leadership-developmentSpending on leadership development is on the way up! According to a 2014 study by Deloitte, companies spent over $130 billion worldwide on corporate training the previous year, a 15% increase. The research also showed that 35% of that money was spent on leadership development.

That’s the good news. The bad news is that it might not be helping. According to Aon Consulting, 60% of US companies are facing a leadership talent shortage.

Part of the problem is that companies are spending money to develop future leaders without really understanding how to identify who those high potentials are.

So, how do you identify who you should spend your leadership development dollars on? Well, before you can do that, you need to back up a step and figure out exactly what you want those dollars to achieve, what kind of leaders you want to develop.

Setting your benchmark

That means defining what your future leadership roles will look like. And there are some questions you need to answer to figure that out. Where is your organization going? Where’s your industry going? What about your competitors? Your customers? What kind of leaders are you going to need to face this future?

The process to define your leadership begins with business strategy, but then follows a similar path to the process you would go through when creating any role definition in recruiting. In fact, our customers use the same job profiling tool to create these profiles as they do for other roles. You can also use this free job profiling tool to help create the behavioral profile of a future leader.

You need to define the competencies for each future leadership role. You’ll find different definitions of competencies out there. Here’s a simple one: Competencies = skills + knowledge + values + behaviors. 

Here are some things we know about those elements: Skills can be trained so that’s good; knowledge can be acquired; values, to some degree, can be instilled; and behaviors can be modified but – and this is really important – a person will not consistently behave in a way that goes against their core temperament. They can adjust and modify and adapt, absolutely, but in the long run they will not consistently behave in a way that goes against their core temperament. 

Where to place your training dollars – High Potentials vs. High Performers

Once you’ve defined your competencies in a concrete way, then you’re ready to identify who you should be focusing your training dollars on and specifically how you need to develop them.

One thing you’ll want to keep in mind when assessing your people is how to separate high potentials from high performers. People often use the terms interchangeably, but they’re not really. Here’s a way to think about it: all high potentials are high performers, but not all high performers are high potentials.

The difference can be subtle so it can be hard to pick out.  Let’s use a sales role as an example.  Imagine a sales person who is a really high performing sales person, just blowing their quota out of the water year after year, but maybe they’re just not destined to be a sales manager or a director of sales or a VP of sales. They just don’t have the desire or natural inclination to take on the managerial/leadership responsibilities.

They should just be out there day in, day out selling and they love it and they’re great at it. They’re high performance, low potential – potential in terms of moving up in the organization.

High potentials have all the qualities of a high performer, but the difference is that they need to move up in the organization and take on more responsibility, and I emphasize the word need.

They want to, but they actually need to.  It’s just part of their DNA.  They’re made up that way and if they’re not getting that in your organization they’ll typically find somewhere else where they can get it.

Part of identifying them lies in identifying the behavioral markers that go along with that need to advance. In our research, we’ve uncovered trait groupings that typically accompany the high potential and high performer. 

If you’ve figured out what you need in a future leadership role, and identified those who are most likely to have the behavioral traits to succeed with the right training, you’re ready to spend those training dollars with confidence. 

 Image courtesy of scottchan at



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