There has never been a greater need for leadership development. Companies of all kinds understand that they require leadership skills and organizational capacities that are different from those that enabled them to succeed in the past if they are to survive in today's volatile, uncertain, complex and confusing environment. Additionally, there is a growing understanding that those who are in or near the executive ranks should not be the only ones receiving leadership development. Employees across the board are increasingly expected to make important decisions that are in line with business strategy and culture due to the spread of teamwork platforms and digital "adhocracies" that encourage individual initiative. Therefore, it's crucial that they have the necessary technical, interpersonal, and communication abilities.
However, there are major changes taking place in the leadership development sector. The number of players providing the courses needed to teach business managers the hard and soft skills they need has increased. But despite spending billions of dollars yearly on executive training, corporations are growing dissatisfied with the outcomes. More than 50% of senior leaders believe that their talent development efforts fall short of developing important skills and organizational capabilities, according to a number of substantial industry studies and our own deep discussions with clients.
Traditional Executive Education's Issues
The traditional programs no longer effectively train CEOs for the problems they face now and tomorrow, according to chief learning officers. Companies are looking for employees with the interpretative, affective, perceptual, and communicative abilities required to drive proactive collaboration. However, the majority of executive education programs—which are meant to be extensions of or replacements for MBA programs—concentrate on discipline-based skill sets, such financial analysis and creation of strategies, and severely undervalue critical relational, communication, and affective abilities.
It makes sense why commercial lenders claim they have difficulty defending their annual training expenses.
Programs for executive education also fall short of their intended goal. The phrase "lifelong learning" has been bandied about for years in academic and corporate circles, but it is still very far from being a reality. To accomplish that purpose, traditional executive education is simply too episodic, expensive, and elitist. Not surprisingly, elite business schools like Rotman and HBS have witnessed a considerable rise in demand for specialized, cohort-based programs that cater to the unique talent-development requirements of businesses. The personal learning cloud, which is a rising combination of online courses, social and interactive platforms, and learning technologies from both established institutions and upstarts, and corporate colleges are bridging the gap.
The decentralized state of leadership development is due to three key factors. The first is a mismatch of motives. Executive development is a long-term investment for organizations, but participants do so to advance their careers and their skill sets, not necessarily to stay with the companies that paid for their training. The second is the mismatch between the skills that firms need and those that executive development programs produce, particularly when it comes to the interpersonal skills necessary to succeed in today's flat, networked, and increasingly collaborative organizations. Traditional providers have a wealth of experience in teaching cognitive skills and tracking their development, but they have much less knowledge of teaching people how to effectively collaborate and communicate with one another. The skills transfer gap is the third justification. Simply said, few CEOs seem to adapt what they learn in the classroom to their work, and this gap increases the more away the learning location is from the application location. Organizations must close these three gaps to build the managerial and leadership skills that is necessary.
The uneven condition of leadership development can be explained by three key factors. A clash of motives is the first. Organizations invest in executive development for their own long-term benefit, but participants do so to progress their careers and their skill sets, not necessarily to stay with the companies that paid for their training. Second, there is a skill gap between what executive development programs teach and what businesses need, particularly when it comes to interpersonal abilities necessary to succeed in today's flat, networked, and increasingly collaborative workplaces. Traditional providers have a great deal of experience teaching mental capabilities and monitoring their progress, but they have much less knowledge in instructing others in successful interpersonal and teamwork abilities. The lack of transferable abilities is the third cause. Simply said, few CEOs seem to apply what they learn in the classroom to their work, and the distance between the two grows the further apart the learning and application foci are. Organizations must close these three gaps in order to gain crucial managerial and leadership skills.
The Skills Transfer Gap: Learning Is Rarely Put Into Practice
One of the main criticisms of executive education is that the acquired talents and abilities aren't used in the workplace. Although surprising, this raises questions about the basic core of executive education. A century of research in mental, educational, and applied psychology, as well as more recent work in the neuroscience of learning, show that the distance between the locus of acquisition and the locus of application of a skill has an important effect on the likelihood that a student will use that skill.
In fact, if the locus of learning and the locus of application are identical, learning a new skill is much simpler to use. Near transfer is what is meant here. For example, understanding how to map the aluminum industry as a value-linked activity chain is easier to transfer to a closer study of the steel industry than it is to a further analysis of the semiconductor industry or the strategy consulting sector.
It should be noted that when we use the term "distance," we don't just mean a person's physical range. A new skill is less likely to be used when the social (Who else is involved?) and functional (What are we using the skill for?) contexts are different, as well as when the locus of application and locus of acquisition are distant in time and space (such as when learning in an MBA classroom and applying the skills on the job years later).
According to personal data on skills transfer, just 10% of the $200 billion annually spent on corporate training and development in the United States actually produces meaningful effects. That much waste is amazing. More importantly, it makes rethinking learning experiences in the corporate training and executive development sectors more urgent.
The good news is that a solution is available thanks to the growing number of online classes, social and interactive platforms, and learning tools from both established organizations and upstarts that make up what we refer to as the "personal learning cloud" (PLC). Selected PLC components can be customized by organizations to fit the demands and behaviors of individuals and teams. Employees can learn skills in the PLC's flexible and immediately available environment, where they will be used. It functions as a modern-day version of on-the-job training.
We discuss the dynamics underlying the changes, the evolution of leadership development, and strategies for managing the growing PLC in this article.
How Leadership Development is Going
Many newcomers have joined the established participants in the leadership development market, including business schools, corporate universities, and specialized training firms and consultancies. In addition to established management consultancies like McKinsey and BCG, these also include digital start-ups like Coursera and Udacity. As instructors, counselors, and directors of the executive education programs at Rotman (in Mihnea's example) and Harvard Business School (in Das's case), we have been intimately familiar with this quickly changing ecosystem of service providers. We've also put together a table that compares the players to help make sense of it all (see below).
The Distribution of Providers
Other competitors appear as demand for personalized, identifiable, and directly successful executive education increases. Each competitor in the race to offer skills development programs—business schools, consultancies, corporate universities, and digital platforms—has advantages and limitations.
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