IREM Global Summit | Chicago | October 10-13

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Don’t Waste Money on Leadership Development

May 05, 2017 | IREM Staff

Would you let a doctor prescribe expensive medication without first diagnosing what was wrong with you? Would you tell a mechanic to replace the engine in your car because it was making a funny noise – without first identifying what was making the noise? In both cases you could end up spending a lot of money without actually fixing the problem. Few of us would ever think about doing something like that.

Yet, many companies do essentially the same thing when they throw thousands of dollars into leadership development programs without first trying to figure out exactly what they are trying to fix.

The need for “leaders at all levels” is one of the 12 critical issues identified in the Global Human Capital Trends survey published by Deloitte University Press. Leadership remains the number one talent issue facing all organizations, with 86 percent of respondents rating it “urgent” or “important.” Only 14 percent of companies feel their leadership pipeline is “ready.” And, the fact that only 13 percent say they do an excellent job of developing leaders at all levels means that this area has the largest “readiness gap” in the survey.

While it is clear that a majority of companies in business today face a leadership talent gap, it is not always clear as to what a company needs to do to close that gap. Even when a company knows it has a talent gap, with limited or no bench strength, it often has not done enough to define what it really needs to fill that gap. As a result, a company might send a hand-full of employees to leadership training – and hope they return ready to lead the company. Most of the time however, this provides a low return on investment because: a) the wrong people are sent; b) the program doesn’t cover the specific leadership skills required by that particular company or individual; and/or c) the company believes a one-time exposure to leadership training is all it needs.

Before establishing a leader development system companies must determine why they even need one. There are many different reasons why a company might need leadership development, including improving employee performance, succession planning, or implementing organizational change. While there are many tools a company can use to diagnose their talent needs there are two things that a company needs to start with:

  1. Strategic Plan – The first thing to look at is the company’s strategic plan. Your strategic plan outlines the overall direction of your company. This in turn, will alert you to the type of leaders you need today and what kind of leaders you may need in the future to implement strategic changes.
  2. Succession Plan – A well-conceived and written succession plan (which incorporates and follows your strategic plan) is the next step in your leader development needs assessment. It should identify critical positions required today, and positions that you will need in the future to achieve your goals.

If you don’t have both a strategic and a succession plan, you run the risk of wasting a whole lot of money on leadership development programs that won’t solve your real talent needs. As with many things, it is not so much what you don’t know that is likely to hurt you – it is what you don’t know that you don’t know that causes the most dysfunction and can curtail the best-laid plans before they’re even implemented.

For more information on diagnosing both organizational and individual leadership development needs, check out IREM’s Leadership Handbook for Real Estate Professionals.

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