Every year, businesses spend a combined total of more than $20 billion on leadership development, according to figures published by Forbes, as they continue to try and plug the leadership gap. In total, this represents 35 percent of all spending on corporate training, making it the single biggest area of investment.
While spending remains high, opinion is divided on whether or not businesses are receiving value for money. However, a recent focus on making this training more practical has yielded positive results. Here, we take a look at five reasons why leadership and management development should be made more practical.
1. People Learn More From Practical Lessons
The first and perhaps most obvious point is that practical lessons have been shown time and time again to improve the quality of learning. One of the most damning statistics comes from the SAVO Group, which found that after one week, the average employee will have forgotten 65 percent of the material covered in a traditional training seminar. Worse still, this figure rises to 90 percent after six months.
A study carried out at the Polytechnic University of Valencia, meanwhile, found that long-term knowledge retention – measured eight months after the original lesson – can be increased by more than 15 percent through ‘active learning’; combining teaching with related, concrete experiences.
2. It is Easier to Measure Practical Results
Despite the huge amount of money spent on leadership training programmes, many businesses report that they struggle to measure the return on investment. As a result, it is sometimes viewed as a luxury that can be done away with when times get tough and cuts need to be made to expenditures.
By involving practical elements, however, businesses can measure the effects of their development programmes more effectively. This then allows them to make changes, and to step up or reduce investment as is necessary. It will prevent them from seeing it as little more than a financial gamble.
3. People Need to Learn From Real-Life Situations
According to the famous 70/20/10 Model, which was advocated by Morgan McCall and colleagues in The Career Architect Development Planner, 70 percent of effective training occurs on the job. A further 20 percent of learning should come from talking to mentors or role models, with just 10 percent coming from formal training programmes.
“Strong leaders are key to any company’s success…[but] traditional training courses often focus on hypothetical case studies,” says Emma Luxton, writing for the World Economic Forum. “[This] can make it difficult for participants to apply their knowledge to real-life situations and learn through their mistakes.”
4. Increasing Practical Elements Can Lead to Savings
Although the development of new leaders is an absolutely critical concern for most modern businesses, making their investment in a quality training programme worthwhile, every business should still look for ways to be more efficient with their money. Making a development strategy more practical is one such way.
By cutting the amount of time spent in a classroom type environment, the cost of hiring teachers or coaches can be reduced significantly. Moreover, it can help to reduce the cost associated with taking leadership candidates away from the workplace for prolonged periods of time.
5. Practical Development Produces Tangible Business Results
Finally, one of the biggest reasons why it makes sense to adopt a more practical approach to the development of new leaders is that doing so can have a positive impact upon a business’ day-to-day operations. Put simply, when training is designed to be practical, it can be designed to solve a genuine business problem.
To provide an example, the Harvard Business Review collaborated with global agricultural processing company, Cargill, to create a new development programme. Of the 75 participants, 80 percent completed their projects and produced results and business insights. One of the programmes generated a 2.6 percent reduction in work orders.