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It is an understatement to say that the events of the last year have affected almost every aspect of life in both expected and unexpected ways—and this includes leadership development actions and trends.
In this year’s 2021 Annual Leadership Development Survey Report for Training magazine, we highlight the changes that have occurred over the last five years, with a particular focus on the profound effects the events of this past year have had on leadership development. The results shine light on how leadership development responds to current events, as well as what remains consistent and stable through times of change.
INVESTMENT IN LEARNING AND LEADERSHIP DEVELOPMENT
For the fifth consecutive year, Training magazine and Wilson Learning Worldwide Inc. partnered to conduct a survey focused on what organizations are doing to create effective leaders. This year, more than 750 Learning and Development (L&D) professionals responded to the survey—the largest response rate in the survey’s five-year history, suggesting that industry professionals had an even greater interest in sharing their leadership development views this year. This provides us with a total database of more than 3,000 responses for all Eve years.
Overall, the training and development expenditure per employee showed a significant jump compared to the previous year. In 2020, companies spent $176 per employee, on average; in 2019, this figure was $147. This is still lower than the peak in 2018 of $194 but continues a steady trend in the upward direction. (Note: Organizations were asked to indicate spending over the last 12 months; thus, this 2021 survey presented results for 2020 investments.)
However, this increase in overall training investment did not translate to greater investment in leadership development, which is probably due to the impact of the COVID-19 pandemic. Almost half (48 percent) of respondents indicated that their spending decreased significantly, while only 13 percent indicated that they spent more than planned.
Overall, approximately 25 percent of total training investment went to leadership development, below the peak investment of 30 percent in 2017. There was an increase in the percentage of organizations spending 11-20 percent and 21-30 percent on leadership development.
Respondent comments suggest the decrease in leadership development investment was at least partly due to the diversion of funds toward efforts to redesign learning for more remote/ virtual learning during the pandemic, when face-to- face learning was not possible.
Organizations also are not anticipating as much of an increase in leadership development budgets. While the percentage of organizations indicating budgets will remain the same in the next 12 months has stayed steady over the years at approximately 38 percent, the percentage anticipating an increase shrunk from a high of 58 percent to a low of 38 percent this year. The number anticipating a decrease grew from approximately 5 percent in 2017 to a high of 15 percent this year.
PANDEMIC IMPACT ON LEARNING METHODS
Over the years, the learning methods used for leadership development have been relatively stable; this year is an exception.
There were some expected —and not so expected—changes in learning methods used. As expected, there was a 10 percent decrease in the percentage of organizations using live instructor-led training (ILT) and a 19 percent increase in virtual instructor-led training (VILT). There was also a 7 percent increase in blended learning methods. Somewhat less expected, there was a significant increase in the use of mobile learning and microlearning for leadership development. Unsurprisingly, significant decreases were noted in the use of job rotations and structured on-the-job learning programs.
The shift toward more virtual instructor-led training was clearly driven by the pandemic. Moving to virtual learning was the choice of the vast majority of respondents, with 78 percent choosing that method over self-directed e-learning (18 percent) or trying to continue with classroom learning (4 percent).
Interestingly, the shift toward more virtual instructor-led training also resulted in an increase in its perceived effectiveness. Prior to the pandemic, only 45 to 47 percent of those using virtual learning saw it as effective. This year, 70 percent of organizations saw virtual learning as an effective training method.
SOCIAL JUSTICE INFLUENCES LEADERSHIP SKILL PRIORITY
Organizations were asked to identify their top five priority leadership skills. While there was little change in past years, there was meaningful change in this year’s survey.
While coaching and communication remained the two highest-ranked priority skills, as in past years, Diversity and Inclusion (D&I) vaulted from 12th to third in priority this year (Diversity and Inclusion was added in the 2020 survey). The connection to this past year’s increased visibility of social justice concerns is a likely factor. Other skills increasing in priority include interpersonal relationship skills, motivating others, and taking accountability, further reinforcing this Ending.
Which skills dropped in priority? Most notable are performance management, dropping from third to eighth, and self-development (11th to 16th).
CHARACTER CONTINUES TO BE A FOCUS
This year also showed an increase in the number of organizations that offer a program to specifically develop leadership character. Twenty-four percent of organizations offer a leadership character development program, compared to 18 percent last year. Overall, 66 percent of organizations provide some form of leadership character development, either separately or as part of a leadership skills program.
Also a possible reflection of the focused attention on social justice, all top six priority character elements had some relationship with this issue (integrity/ethics, empowerment, empathy, nurturing, resilience, and promoting diversity). This year saw an increased interest in connectedness and belonging; curiosity and creativity; promoting diversity; resilience; and integrity, ethics, and trust. All of these issues directly address how leaders treat other people. Falling in priority were risk-taking, courage, and drive and initiative.
The uncertainty created by the pandemic, as well as the greater social justice visibility, seemed to drive character considerations toward more people-focused elements.
LEADERSHIP IMPACT SHOWS LITTLE IMPROVEMENT
Beginning in 2017, we asked a series of questions about the impact of leadership development on important business outcomes. These outcomes were taken from the research on the expectations of executives on how leadership development should impact the organization.
For the most part, little has changed for most of the impact elements. While there has been some improvement in the percentage of organizations that believe they have best-in-class leaders (as indicated by other organizations trying to recruit them away), there has been little change in the other elements and actually a slight decline in the view that leadership is a source of competitive advantage.
The results indicate a need for organizations to focus more energy on the business outcomes they are expecting to achieve from their leadership development efforts.
EXECUTIVE INVOLVEMENT IN DEVELOPMENT ACCELERATING
It is well known that executive involvement in leadership development has a profound impact on results. Last year’s Leadership Survey highlighted that high-performing organizations are more than twice as likely to have executives actively engaged by leading sessions, setting goals, and making public statements on the importance of leadership development. The more involved executives are in learning and development, the greater the impact.
Over the last five years, we have seen a steady increase in three areas of executive involvement. Executives are recording more messages about the importance of leadership development, are more involved in leading leadership development sessions, and are more likely to mention their investment in leadership in annual reports.
While increases in executive involvement are promising, still less than 60 percent of executives tend to engage in these activities. Significant, improvement opportunities still exist in many organizations.
CROSS-GENERATIONAL SUPPORT FOR LEADERSHIP TRANSITION
A clear indication of the strength of a leadership development effort is the degree to which there is support and alignment between the current generation of leaders and the next generation of leaders. Last year’s Leadership Survey showed that current leaders in high-performing organizations were 48 percent more likely to give new leaders increased responsibility and provide coaching than were leaders in low-performing organizations. We also found that new leaders in high-performing organizations had more reasonable expectations for advancement, were more passionate about their new responsibilities, and recognized the need to develop leadership skills.
So are we seeing an increase in these activities over time? The answer is, unfortunately, mixed.
Managers were making slow, but steady, progress. Over the last four years, managers were increasingly likely to coach the next generation of leaders and were more willing to pass on responsibilities to them. But in 2021, this all reversed back to the levels seen in 2017.
Despite this reversal, the next generation of leaders appears to be motivated, not discouraged, by recent events. While their expectations for fast career development are still largely unreasonable, the last two years have shown significant progress. The next generation’s commitment and recognition of the need for new skills continues to remain high.
The results are especially illuminating in the context of what Learning and Development leaders consider the most effective approaches to supporting the transition to the next generation of leaders. When asked to name effective approaches, L&D leaders identified: “on-the-job coaching between current and next generation leaders” (identified by 83 percent of L&D leaders), followed by “giving next-generation leaders stretch assignments” (selected by 80 percent of L&D leaders). Ironically, the most effective things managers can do to support the development and growth of the next generation of leaders are things managers tend not to do.
TAKEAWAYS: STRENGTHENING LEADERSHIP DEVELOPMENT
The results of this survey, and the struggles of this past year, point out the fragility of leadership development in many organizations, as well as the incredible importance and strength of leadership development in others. We believe there are a number of takeaways from this longitudinal look at leadership development. Specifically, the results indicate that organizations can achieve a greater impact if they:
- Leverage senior executive engagement. In addition to the increases in involvement we saw this year, we also need to see executive teams setting specihc expectations and goals for leadership development, modeling desired leadership behavior, and creating leadership succession plans.
- Improve manager support of the next generation of leaders. Times of great change should be an opportunity to move forward, but the stress of the last year led many leaders to take back control and responsibilities. We need to regain the progress toward manager support of new leaders and take additional steps to create more mentoring relationships between current and future leaders. Encouraging the Baby Boomer generation of leaders to embrace the role of coach will help develop both the skills and character of new leaders.
- Leverage investment in remote learning. While the pandemic forced us to make greater use of virtual learning for leadership, it also illuminated remote learning’s potential effectiveness. Leadership, perhaps more than other capabilities, needs to be learned within the work context and “dripped” to new leaders over time, rather than taught to them in a five-day boot camp “event.” We can leverage the investment in virtual instructor-led and self-directed e-learning to create a Leadership Learning Journey that will result in greater behavior change.
- Sustain the priority of Diversity and Inclusion. If next year’s survey shows that the priority of Diversity and Inclusion skills remains high, it will indicate a sustained commitment for Diversity and Inclusion. Only time will tell.
- Focus on organizational outcomes. The last five years of the Leadership Survey clearly show that we are not moving the needle on important business outcomes. When only about 50 percent of organizations indicate they are achieving such outcomes, this is a clear indication that companies require greater focus. L&D leaders need to clarify what outcomes they are trying to achieve with their leadership development efforts and draw a straight line to what programs they are implementing.
While the past year has been stressful, it also has opened a window of opportunity to make significant and meaningful change in how we develop leaders, transition to the next generation of leaders, and measure our success in leadership development. We need to act now—before that window closes.
Some 753 Learning and Development (L&D) professionals and decision-makers responded to the 2021 Leadership Development survey between January 8 and February 8, 2021. Overall, in the last five years, we have collected data from more than 3,000 professionals. All were employees of companies that create and use leadership development services with their own employees; external providers of learning and development services were excluded from the results. The majority of respondents (56 percent) had management responsibility, with the largest groups having the title of Manager (29 percent) or Director and above (27 percent).
More than half of the respondents (62 percent) operated only in the United States; the remaining were composed of global (22 percent) and multinational (16 percent) companies. Organizations were fairly evenly distributed in company size, ranging from less than 100 employees to more than 50,000, with the largest group (61 percent) having 1,000 to 5,000 employees. As a whole, organizations spent $1.97 million on training annually, approximately 27 percent higher than the $1.55 million spent in the previous year.