4 minute read –
Digitalisation is changing the competitive landscape in the leadership development industry. It is also potentially making programmes less effective by moving content further away from the leaders’ job context. The closer content mirrors reality the easier it is to apply. This article points to one segment bucking the trend that could be used as an example.
Leadership development is a major industry. Organisations spend about $70 billion per year on it across the world.
Like most industries it is being digitalised. New players are entering, and new approaches being tried out. Digitalisation opens for solutions that can deliver on the various improvement opportunities HR is looking for.
Most of the activity is happening within the 2 traditional areas of education and development:
In education new players such as Coursera and Udacity, who entered the market in 2011/2012, have developed large libraries of attractive digital courses provided through portals. These portals can be tailored to organisations and individuals within organisations.
It has become much easier and cheaper to provide knowledge that meets actual needs, as and when needed. This reduction in cost has led to more and more organisations setting up their own ‘corporate university’, managing and curating the portfolio of educational activities needed. Content is partly lifted from external providers, partly developed internally.
Old players have strived to stay relevant. IESE in Spain has been consistently ranked as no.1 in traditional executive education but Wharton in the US is the business school with the best online presence. Given that many organisations wonder if their leaders will ever see a classroom again, Wharton is likely to strengthen its position at the cost of IESE.
Many new players have entered the development space. In the pre-digital age, off-site physical development was often delivered by local or regional players. This has now changed with strong internationalisation. In addition, corona has accelerated digitalisation. Coaches, trainers and psychologists have scrambled to stay relevant by adapting their material for videoconference-based delivery.
Big international service firms like Deloitte, Korn Ferry and McKinsey are developing their product offerings for both analogue and digital delivery. New, purely digital players like Strivr, BetterUp and are developing fast, using technology to deliver new services.
The figure shows the development trends, primarily driven by digitalisation. Importantly, the figure also has a y-axis showing an on vs. off-the job dimension. This dimension is important for two reasons:
- The biggest problem for all education and development is to transfer what is learned into the real world. It is difficult to learn how to do something and then apply it. What is learned is all too often forgotten or deemed irrelevant.
- Most learning happens on-the-job. The accepted division is 70 (learning from doing) vs. 20 (learning from colleagues) vs. 10 (external instruction or support). Off-the-job approaches are confined to the 10% and are often viewed with scepticism.
Development is more easily related to the job than education. Participants learn through working on cases from their everyday work life. Coaching is based on real individual challenges. Assessment is often performed by colleagues and bosses. However, digitalisation of development can increase the distance between what is learned and the real-world. Content is more standardised, more difficult to tailor to the audience.
The same effect occurs for education. Digitalisation reduces the interaction that is necessary to ground the learning in the participants’ reality. That is why the lower two arrows in the graph point downwards.
There are a multitude of digital tools being offered as a part of these trends. Have a look at Digital tools on offer for leadership development for an overview.
3. Improvement opportunities
Despite potentially increasing the distance between learning and real life, digitalisation does deliver on a number of improvement opportunities. A major 2019 report from the Center for Creative Leadership (CCL) summarised what HR leaders say needs fixing:
The CCL report identified 2 other opportunities that digitalised education and development don’t deliver on (Content isn’t connected to the business; Leadership development isn’t consistently prioritised), but that a new approach focused on getting a good start does.
4. First 100 days
The first 100 days in a new role are crucial. On the upside, a good start lays the platform for high performance throughout the 4.5 years a manager is, on average, in a role. On the downside, a lot changes when managers change roles and this leads to many failing. Up to 40% underperform.
The first-100-days segment is shown at the top of the figure above. Help today is provided through individual coaching. This makes support too expensive to be available to more than a few managers at the top. The new digital coach for a manager’s first 100 days, Ella, is cheap and can be applied to all levels, especially more junior managers who need it most. The arrival of a digital tool opens for a whole new approach to leadership development that ticks all boxes:
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