Why Companies are Wasting Billions

Why Companies are Wasting Billions on Leadership Training

Companies are wasting billions of dollars on leadership training programs that are focused on the past and not the future! These are unsuccessful in developing quality and high-performing leaders! Leadership development is the future of corporate training.

A report released in 2016 in the US found that companies spend more than $170 billion per year on educating leaders. The lion’s share of these funds are directed towards one-off leadership training. Overwhelmingly the feedback from this report highlighted the fact that leadership training is largely ineffective and has been for a long time.

Development and training are two distinctly different concepts. In the context of leadership, leaders are not trained in a day, they are developed over a period of years. This important, yet subtle distinction, is lost on most people and within organisational development departments, where quick results are expected. The general perception is that training improves leadership and solves issues. However, this is rarely the case, with many managers reporting they are more informed, and no wiser for the experience and the training lacks context to their specific leadership challenges. If you think about it, how many accomplished entrepreneurs, the true disrupters in the commercial world, sit through years of old fashioned lectures and presentations to get to where they are today? Very few. They develop their leadership over time, through trial and error, seeking information specific to their needs.


The Problem with Leadership Training

The existing corporate belief system supports the status quo. For many organisations this is a reliance on traditional training methods and this is at the heart of the problem. Whilst history has its place in today’s business world, companies should regularly review recent performance for what is working, and what isn’t, rather than looking too far back in the past to the lessons learned in fundamentally different market conditions. Because isn’t leadership all about making decisions, doing things and getting those things done?



A key point to note: training is focused on the best existing practices but development is focused on the best next practices. Leadership training is often outdated, authoritarian and grounded in lineal business process. People don’t like to be lectured, we learn through experiences. Traditional training techniques such as presentations and lectures are not experiential enough to develop the attitude, practical skills and ability required to be an effective leader in business today.


The solution – Leadership Development

If the future of corporate training is leadership development, we should be coaching and mentoring them. Development presents achievable, actionable goals, focuses on getting things done and requires leaders to think innovatively.


The 10 differences between the philosophy of leadership training vs. leadership development

  1. Training sticks to the status quo. Development strives for something more.
  2. Development is people focused
  3. Development is orientated towards developing potential
  4. Training focuses on the past, development on the future
  5. Training focuses on transacting, development on transforming
  6. Development is growth orientated
  7. Development educates, training indoctrinates
  8. Development is continual, training is finite
  9. Training focuses on problems, development solutions
  10. Development investigates the unknown, training the known


If you want innovative leaders, you need to develop them!

You cannot evolve as an organisation if leadership is underdeveloped and stagnant. An organisation without effective leadership will nurture slow decision making, analysis paralysis and widespread apathy. When is the last time you looked inside your organisation and thought “Wow, that person is a fantastic leader”?  Probably not often enough for that $170 billion investment.


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