The Changing Face of Leadership Development

The financial crisis of the late 2000s held up a mirror to the state of leadership development and revealed the need for a serious reassessment. The derailed financial services companies had some of the most sophisticated leadership development programs in the world. Considering how much money, time and effort was invested in leadership development, where were all the leaders?

“The financial crisis raised some tough questions for leadership development,” said David Dotlich, co-author of Leading in Times of Crisis: Navigating Through Complexity, Diversity and Uncertainty to Save Your Business. “Should we teach just what the CEO wants the leaders to learn or does it need to be broader? Leadership development’s aim must be to mold leaders to think and act independently as opposed to just training to a company’s competency model.”

Dotlich thinks traditional leadership training in a classroom using case studies and best practices isn’t enough. Rather, effective program development needs to be reworked from the ground up, with the clear intention of developing strong individuals and learning programs that are in line with a company’s strategy.

In order to do this, Leading in Times of Crisis co-author Stephen Rhinesmith said a company should first identify its strategic needs for a three- to five-year period, and then specifically build and relate training to that strategy. The yield will be people equipped with the required skills at various levels, making it easier for the company to attain its goals. Additionally, he said, there should be support from the HR department for all training programs. “There needs to be congruence between what people are taught and what people are rewarded for,” Rhinesmith said.

Triangulated Leadership Traits

In their book Head, Heart and Guts: How the World's Best Companies Develop Complete Leaders, Dotlich and Rhinesmith contend that while analytical abilities are important for executives, successful leaders also need emotional intelligence and the ability to evaluate and take risks.

For example, the pharmaceutical industry has undergone enormous changes to its business model. Today, it takes about $1 billion to bring a drug through basic discovery to market. “Because of this change, the question for the industry is: What’s going to create value in the mind of the patient, the doctor and the payer in the future?” Dotlich said. “That’s not just a question for the CEO, but for all levels of the organization.”