Five Steps to Addressing the Leadership Talent Shortage

26 Dec. 2011 | Comments (0)

(Editor's note: This post is part of a six-week blog series on how leadership might look in the future. The conversations generated by these posts will help shape the agenda of a symposium on the topic in June 2010, hosted by HBS's Nitin Nohria, Rakesh Khurana, and Scott Snook. This week's focus: leadership development.)


Nearly 60% of companies are facing leadership talent shortages that are impeding their performance. Another 31% expect a lack of leadership talent to impede their performance in the next several years. Yet, in 2009, U.S. companies spent an estimated $12 billion (24% of their overall training budgets) on leadership development programs and services. By any reasonable standard, what we are currently doing to grow and develop future leaders is not working. Here are five critical attributes that we believe are necessary for developing the leaders of today and tomorrow:

  1. The best learners make the best leaders. We must teach people how to learn leadership from life experiences. In our paper, "Power to the People," we argue that learning leadership is a function of how people approach, go through, and reflect on developmental experiences — a process we call "mindful engagement," We need to stop teaching leadership theory in a vacuum, and start teaching people how to learn leadership from real-world experiences.
  2. Leadership as a set of principles. Business education is largely oriented toward teaching an important but narrow set of technical knowledge and skills. We need to expand our teaching to encompass a set of leadership principles that can be globally applied across situations. Doing so will build an adaptive capacity that enables people to more effectively lead in today's complex and dynamic business environment.
  3. Reward leadership development (FINALLY!). All companies pay lip service to the importance of developing people, but how many companies actually reward (with any significance) the development of people? Answer: very few. Also, how many companies penalize managers for hoarding key talent? Answer: almost none. Yet, managers often do everything they can to avoid losing key talent to other opportunities because, as one executive put it to us the other day: "I can't afford to lose my best people."
  4. Leadership development at all levels. In an earlier blog entry, we argued that leadership is not about position. If that is true, then why do most leadership development programs focus on senior executives? We need to expand our focus to figure out ways to efficiently and economically develop leaders throughout the organization.
  5. Keep it simple. Leadership is complex, but leadership development cannot be. We must provide key talent with clear metrics and development priorities that provide a straightforward roadmap for realizing their leadership potential. Unfortunately, that is not the case in most companies. One Fortune 500 company that we are working with developed a leadership competency model that specifies 54 distinct competencies across 15 different leadership skills. The result? Employees are confused, and assessment data are poor. Instead, identify the three or four competencies that really differentiate top performers across different levels of the organization, and then reward and promote based on those competencies.

These are our five ideas for improving the return on investment in leadership development and addressing the looming leadership talent shortage. Do you agree? Disagree? Have other suggestions?

This blog first appeared on Harvard Business Review on 6/02/2010.

  • About the Author: Sue Ashford

    Sue Ashford Sue Ashford is Associate Dean for Leadership Programming and Executive MBA Program and the Michael & Susan Jandernoa Professor of Management and Organizations at the at the University of Michigan …

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  • About the Author: Scott DeRue

    Scott DeRue Scott DeRue is an Assistant Professor of Management and Organizations at the University of Michigan Stephen M. Ross School of Business.

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