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A good strategy of leadership development goes beyond e-learning. How to make it measurable?

leadership development strategy

The methods of skills and qualifications development have undergone a major transformation in the past year. It is estimated that the online education industry will achieve a value of $325 billion by 2025. L&D specialists are facing a huge challenge – how to design an effective leadership development strategy in digital reality? E-learning is not enough to equip managers with the necessary competencies. To do this, their needs must be analyzed, along with the company’s resources. A little bit of creativity would be of use as well.

Great responsibility, scarce resources

Managers are in a position of great responsibility. They are the pillars of the organization: its core which supports smooth communication, decision-making, and employee management – also when it comes to their engagement and talents. In times of rapid changes and transformations, leaders are responsible for introducing modifications, estimating risks, and taking care of employees’ wellbeing. Their leadership models, flexibility, and stress resistance are being seriously tested.

However, Gallup studied over 50,000 managers and published some alarming findings based on the interviews. Managers are less likely than regular employees to consider their job description as clear and relevant to their duties. What’s more, they don’t often perform tasks that correspond with what they can do best. This is an enormous challenge for L&D departments to help develop managers’ skills, as they have a direct impact on the state of their organization.

Leadership development has an impact on the company’s efficiency

A leadership development strategy in a company should be complex and data-driven. The most obvious and general reason for this is that managers’ competencies have a huge impact on the operation of the company as a whole. Inefficient managers may cause losses to the company; they might even lead to its bankruptcy. This statement may seem ominous but it’s completely true. According to Gallup, 70% of a team’s engagement is influenced by managers. 

A high level of employee engagement is not just a dry number which is only useful for HR teams and employer branding activities. It has tangible effects, as employee engagement levels determine their effectivity, burnout risk, absence, and the number of mistakes made. Additionally, another study by Gallup shows that employee engagement is a strong predictor of company performance during recessions. Leaders must be empowered to be able to build effective teams.

There is no such thing as a perfect leader model

People often argue about the ambiguous definitions of ‘leader’ and ‘manager’. No matter how you understand these terms, in both cases, they refer to a person who sets objectives and directions as well as supports employees when they need this. To be a leader or a manager, a person needs to develop their competencies continuously. How to find out which of them should be boosted in the first place?

There are numerous competency models of perfect leaders. According to Chief Learning Officer, this is all about the ability to adapt the leadership style to any situation; setting goals and developing the employees toward these goals; running experiments; and developing relationships built on trust and candor. You can find similar lists in SHRM, Harvard Business Review, and in the files of any HR or L&D specialist.

Leadership development – what competencies should be developed

It is impossible to create a universal model of an effective manager. Every company, team, or employee requires a different approach, different tools, different styles of communication. This is why some skills or methods that work perfectly for one manager might prove rather useless for another. The process of planning a leadership development strategy in a company should begin with establishing what kind of skills are needed in this company.

Some companies have adequate data which can help in deciding what skills to develop among their management in the first place. Performance reviews, engagement surveys, turnover and absence rates, and offboarding interviews are the sources of this kind of information. The key thing here is to know how to draw the right conclusions from this data – also, to find out whether the development activities have been effective.

New methods of leadership development

There are many methods of leadership skills development. Training, post-graduate courses, coaching, and mentoring have been the most popular ones so far. However, nowadays, most of the classic methods of skills development shifted to an online environment. This means that a large bulk of the learning process is actually e-learning.
E-learning is a gratifying method with a lot of benefits, which can combine versatile types of activities, such as videos, infographics, role-playing, or gamification.

E-learning itself is not enough, though, for leaders to realize their full potential. Theory is important, but it’s also important to put theory into practice at work. Learning through practical experience increases the quality of retention by 70% to 90%, as compared to theory-based learning. One of the available solutions is on-the-job learning, which helps to learn by means of everyday duties and improving one’s working style. This is the approach Tiger Brands adopted.

Tiger Brands case – leadership development through gaining experience

On their one-hundredth anniversary, Tiger Brands decided to analyze the way the company operated, including the development processes. Tiger Brands wanted to update the organizational mechanisms and adjust them to the digitalized work environment. One of the first steps was to define leadership competencies and roles that would constitute the model of the ‘Tiger leader of the future’. Following an analysis of the organization’s needs and resources, a skills development system was introduced, based on hands-on experience gains.

To achieve this, the company implemented a strategy where managers switch teams and locations every three or four years. The goal of this approach was to make managers more flexible and to equip them with data to help them make the right decisions. The better managers know their company, its possibilities and employees, the better they know what solutions have already worked and the better measures they can take in their work.

Another objective of the program was to support employees in improving their qualifications, searching for new solutions and opportunities. They were meant to test various ways of thinking while doing their job. In this context, the company’s structure was its great learning advantage, as the Tiger Brands group consists of a number of brands in a variety of sectors, which can create challenges to help employees discover and use their strengths.

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Leadership development – how to measure its profitability

In the beginning, particular leadership development activities were measured on the basis of the participants’ personal subjective opinions. This is a good approach, as leaders know whether and to what extent a new tool or piece of knowledge might be of use in their daily work. And yet, this data is not sufficient if you want to make sure that the steps you take are beneficial to the organization and help in meeting its business goals. The New Kirkpatrick Model made it possible to change the attitude toward assessing the effectiveness of L&D interventions. The model accounts for the impact courses have on the leaders’ behavior and the consequences of the changes for the organization.

It is perfectly possible to calculate the leadership development ROI and this can be done in a series of ways. One of them is creating a control group which can help in finding out whether the managers who have taken part in training deal with their duties better in comparison with the leaders who have not. Another method is actually the easiest one: it is a comparison of the statistics concerning, for instance, employee engagement before and after a course. In fact, the way a company measures the ROI depends on the goals set. In the case of Tiger Brands, the goal was to increase the level of internal recruitment.

Tiger Brands – leadership development strategy outcomes

The effectiveness of the leadership development strategy at Tiger Brands was clearly visible in numbers. The original goal was to fill 40% of leadership positions internally. However, the results exceeded the initial expectations. The company reached the level of 79% of internal promotions in 2020. In general, the company reduced the number of external appointments from 80% to 20%. 

Tiger Brands CHRO S’ne Magagula’s strategy was publicly acclaimed when she received the Learning and Development Award. Tiger Brands made use of the unique structure of the company with the objective of leadership development. This way, they managed to build a solid stem for the organization and to manage the L&D processes in a better way. The company is a great example of going beyond the typical patterns of employee development and creating complex strategies – their approach was flexible and adapted to the market needs.

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