A comprehensive global study by Korn Ferry, the global people and organizational advisory firm, shows that while the need for innovation and driving strategic change is critical to today’s executives, few believe they have the right leaders in place to effectively deliver on strategy.
Korn Ferry’s Real World Leadership study of more than 7,500 executives from 107 countries found that the executives’ top leadership development priority was developing leaders who can drive strategic change.
However, only 17 percent of respondents were fully confident their organizations had the right leadership capabilities in place to execute on strategic business priorities. While just over half of the respondents (56 percent) said they were “somewhat confident,” more than a quarter (27 percent) were either unsure or did not believe their teams had the necessary leadership capabilities.
“If I were a CEO, being only ‘somewhat confident’ that I had the right leaders in place to drive my company’s strategy wouldn’t be good enough,” said Stu Crandell, senior vice president, Korn Ferry Institute. “That’s why effective leadership development is extremely critical to the success of any organization. It’s required to address the skill, pipeline and culture gaps required for organizational growth, yet it’s one of the CEO’s most underutilized levers to drive strategy.”
When asked to rank the most pressing strategic business priorities in their organizations, accelerating the pace of innovation was one of the top three answers, nearly tying with improving profitability and increasing organic market share.
“Innovation, change and agility are key catalysts for organizational growth,” said Noah Rabinowitz, senior partner and global head of Korn Ferry’s Leadership Development practice. “Today’s best leadership development programs focus on helping leaders to innovate and navigate uncertainty to come out ahead.”
The Real World Leadership study found a significant lack of executive satisfaction with leadership development programs. Study respondents said that if they could, they would discard nearly half (48 percent) of their leadership development approach. In a similar vein, 55 percent of survey respondents judged their leadership development spending return on investment to be only fair, poor or very poor.
“Many leadership development initiatives fail because they are simply a series of programs instead of a comprehensive approach that ties directly back into the business strategy,” said Crandell. “[We need to] not only focus on the whole person – competencies, experiences, traits and drivers – but also leverage real strategic goals and applicable, on-the-job challenges to augment the relevance and impact of the development journey for individuals, their teams and organizations.
The study also found that executives may be their own biggest barrier to achieving leadership development success. Respondents, more than half of whom had VP, EVP, COO, CFO or CEO titles, cited a lack of executive sponsorship as the largest barrier to successful implementation of leadership development programs.
Furthermore, below the senior executive level, there is a significant lack of engagement in driving strategic change. Nearly half (46 percent) of mid-level leaders and 41 percent of high-potential leaders are not active in driving change.
“Connection to the organization’s mission is getting lost at various levels of the workforce. Without organization-wide engagement, strategic change initiatives will not fully succeed, nor will any critical business initiatives,” said Rabinowitz. “That’s where leadership development comes in. It has to be real, relevant and consistent through time and across the organization.”