Leadership development must be part of ‘skills for growth’ strategy, says report

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The Government should make leadership development a key part of its “skills for growth” strategy in order to improve the UK’s competitiveness and boost economic growth, a report has recommended.

According to the “Business benefits of management and leadership development” report, produced by the Chartered Management Institute (CMI) and HR consultancy Penna, 34% of individuals across all levels of management consider their line managers to be ineffective.

Top five most effective leadership training activities

1. Business school postgraduate qualifications.

2. Professional body qualifications.

3. Obtaining a “Chartered Manager” status.

4. External management/leadership programmes.

5. Coaching by external practitioners.

The report, which surveyed 4,500 managers, found that companies that invested in the development of leaders saw increases of up to 32% in people performance and 23% in organisational performance.

In addition, organisations that performed well spent, on average, 36% more on leadership development per manager per year than those with low performance levels.

The report’s findings suggest that simply spending more on managers’ development is not necessarily the answer – employers are, in general, investing in a range of leadership development activities, but the types of training being used are not always the most effective.

For example, 82% of managers rated business school postgraduate qualifications, such as MBAs, as one of the top three most effective leadership development activities, but only 18% of organisations used these to develop their leaders.

In contrast, short courses on management and leadership were used by 43% of organisations but were rated as one of the most effective tools to train leaders by only 34% of respondents.

The report calls on the Government to take a key role in improving management capacity and organisational performance, especially in the medium-sized companies that made up just 16% of the high-performing group in the research.

It recommends that the Government:

  • makes leadership and management a key part of the “skills for growth” strategy;
  • enables young people to have earlier access to management development activities through reviewing the current provisions at schools and colleges;
  • takes an active role in promoting high-quality management education and accredited learning by supporting employer engagement with university business schools and professional bodies; and
  • invests strategically in the leadership and management skills of the civil service and public sector.

Five least effective leadership training activities

1. Management competency framework or job profiles for self-assessment.

2. Learning resources such as DVDs and podcasts.

3. E-learning tools.

4. Psychometric tests.

5. Appraisals and skills audits.

The report also advises that financial investment alone should not be the deciding factor in the provision of management training and development. It suggests that, in order to maximise performance, training should provide skills and learning that are based directly on business needs.

Christopher Kinsella, acting chief executive of the CMI, commented: “The report contains good and bad news for UK managers. The bad news is that a culture of bad management continues to damage UK plc but the good news is that those organisations that have got things right stand a much greater chance of being a high-performing organisation.

“What’s more, it’s within an organisation’s own power to make that change – by investing in management and leadership development wisely, you can make a real, measurable difference. The key is not to take a one-size-fits-all approach, but making sure that any development activity is clearly linked to your overall business strategy.”

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