The most dangerous leadership myth is that leaders are born-that there is a genetic factor to leadership. This myth asserts that people simply either have certain charismatic qualities or not. That’s nonsense; in fact, the opposite is true. Leaders are made rather than born. Failing organizations are usually over-managed and under-led.”
Â Â Warren Bennis
For years, researchers and thought leaders like Warren Bennis have explored the debate over whether leaders are born or made. While the debate will surely continue, some conclusions are generally accepted, with one of the most important being that effective leadership can not be predicted by level of intelligence or education, family wealth or stability, birth order, ethnicity, race or gender. There is a much stronger body of evidence, originating from the Center for Creative Leadership, that leaders are developed through significant challenges and hardships either on, or away from the job.
The case for devoting significant resources and energy to leadership development is hardly new. There are a host of arguments for a well designed and implemented leadership development process that enables individuals to grow through job assignments and work experiences, including these:
Leadership Does Make a Difference
Leadership is one of the most important elements in successfully executing business strategy. After all, itâ€™s people, through effective leadership, who implement business strategies and new product introductions â€“ not spreadsheets, equipment or creative financial strategies. No fact better illustrates that than the finding that fifty-seven percent of the U.S. gross domestic product (GDP) is spent of workforce related expenditures. The most successful organizations appreciate that simple fact, and have a well honed ability to engage and obtain very high levels of contribution from their workforce through effective leadership.
The long term business success enjoyed by such firms as Pepsico and General Electric is directly traceable to both firmâ€™s obsession with leadership development. The Wall Street Journal recently reported that GE spends over $1B annually on management and employee development at Crotonville and elsewhere. GE and Pepisco, and certainly many others, recognize that the more change that lies ahead, the more important it will be to have an effective leadership team. They strongly believe that the quality of leadership can be improved through management development processes.
Buying Talent is Expensive
Organizations canâ€™t always find available talent outside or buy the leadership that they need. If they do, it comes with a commensurately-sized price tag, and no money-back guarantee. Sometimes bringing in talent from the outside may be the only feasible choice, but it’s expensive.
Career Derailments are Expensive
The cost of hiring an replacement at a senior level can range from 25% to almost 200% of annual compensation. The higher the level, the greater the expense. As John Kotter once remarked, there are many false positives. Organizations can not afford to not develop people in a manner that heightens the likelihood that they will be successful when they assume a key leadership position.
Darwinistic Development does not Work
A laissez-faire leadership development process predicated on a â€œslug-it-outâ€ survival of the fittest is not the same thing as survival of the best. Unlike natural selection, the most capable do not always win in pugilistic contests that are designed to determine whoâ€™s the most competent survivor. Relying on such an approach is simply reckless.
Cost of Development is Already being Incurred
The Center for Creative Leadership, through the pioneering work of Michael Lombardo and Morgan McCall, established that most leadership development occurs on the job through challenging and stretch work assignments. If thatâ€™s the case, which most enlightened practitioners donâ€™t deny, then the cost of development is already being incurred. Not to reap a return on this investment is bad business judgement.
Leadership Development is Simply a Good Business Practice.
Findings from the Towers-Perrin study, â€œHow Leading Organizations Manage Talent,â€ underscore that talented people prefer to work for organizations that invest in their development. Workers respect organizations that realize people are not depreciating assets. Equally important, creating a learning environment where development is a key feature is consistent with business strategies that involve having employees take on more responsibility, assume more risk, and solve problems.
Employee and leadership development are viewed not only as a cost of doing business in high flying organizations, but also as an investment that produces nice returns to the bottom line even though its very difficult to measure. They recognize, borrowing a well known advertising tagline used by Fram, that with leadership development, it’s â€œpay me now or pay me later.â€