I was somewhat shocked by the following facts: According to a recent report by Deloitte, companies around the world invest approximately $46 billion annually on leadership development programs. What do they get for their $46 Billion? Not much, it appears. The Corporate Leadership Council found that, despite this huge investment in leadership training, productivity improved by only 2%. 2%! Our forward-thinking investments in improving leadership and management in our companies has not produced the expected results: better leaders and managers resulting in significantly better businesses.
I am a big believer in EQ, Mindfulness, Servant Leadership, Communication, Engagement and other soft skills training for leaders and managers. These types of soft skills training are part of my own New Agreements For Leaders model. But, by themselves, it appears quite difficult to move the needle on returns for a company’s investment in leadership and management training.
We know that unhappy, stressed or disengaged employees are costly and less productive in many ways. In theory, a happy employee doing meaningful work for a supportive boss ought to be a more productive employee. This should mean good leadership and management training produces higher productivity and robust ROIs on those investments in training our leaders and managers. But 2%! While I agree we are blessed to have many well-intentioned leadership experts, trainers, and coaches, with a range of valuable methodologies for growing better leaders and managers, with a 2% ROI, something is clearly missing. And here is, I believe, the missing piece.
The 94% Rule – The Power of Systems
Approximately 94% of the outcomes we experience in the workplace, both good or poor, are a function of the systems/processes in which people work, not the efforts of people. How many leaders and managers are taught this? Not many. Going further, how many leadership and management trainers are seriously taking this principle into account in training leaders and managers in systems thinking and systems optimization tools? Again, not many.
In our experience, when we mix in soft skills training with the optimization of systems and processes, ROIs for leadership and management training jump to 300% for most companies and as much as 10x for some smaller companies. Think about that for a moment; we’re moving the needle from two percent to hundreds of percent simply by adding a systems optimization piece to the soft skills training currently making up most leadership or management training models. For those of you heavily invested in soft skills training, keep in mind that, if we don’t improve the systems, we can’t improve the outcomes, which is where ROI comes from.
The New Agreements for leaders and 7 Tools are designed to bring soft skills training to leaders and managers along with systems thinking/tools, while actually improving systems/outcomes. A systems literate leader or manager engages and grows people, solves problems quickly and sustainably, and improves outcomes—all while setting up workers for success in their jobs. This is certainly a significant part of being a good or even great leader or manager. If you don’t already have a systems optimization piece in your leadership or management training models, consider adding one and let’s move the needle together for the benefit of our clients and each other.
For more complete information on how to mix systems optimization with soft skills training for leaders and managers, I’m happy to send you a copy of my new little book, The New Agreements For Leaders. You can also pick up a copy (free e-book) at www.thenewagreements.com or a printed copy ($9.97 on Amazon or B&N). If you are interested in collaborating in a mutually beneficial way, email me directly at firstname.lastname@example.org.