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High-Impact Leadership: The New Leadership Maturity Model

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Developing Leaders

Despite substantial efforts by learning professionals, a multibillion leadership development industry,4 and more than 70 years of leadership research, the overall success by organizations to grow leaders remains dismal. The capability gap for building great leaders is widening,5 and leadership pipelines are reportedly weak across all sectors and industries. Indeed, our newest research shows that capable leadership talent is rare. Only 60 percent of leaders in organizations surveyed show commercial acumen and business judgment; 48 percent are seen as driving change and innovation; and only 44 percent build talent for competitive advantage (see Figure 1).

The issue that many HR and business leaders are trying to solve is: where have they gone wrong in their attempts to develop capable leaders and how can they change course?

NEXT-GENERATION LEADERSHIP DEVELOPMENT: UTILIZE ORGANIZATIONAL CONTEXT1, NOT JUST PROGRAMS

Change is currently the top business challenge for organizations2—fluctuating market dynamics, new technologies, shifting government regulations, and new customer expectations. Today’s leaders require a thorough understanding of the issues and situations their organizations encounter, and ways to respond effectively. But few organizations have enough talented leaders in place. Our newest leadership research effort, with more than 2,000 global HR and business leaders, spotlights the need for organizations to completely rethink how they develop their leaders. Currently, only 25 percent of these 2,000 companies are utilizing their organizational context to drive leadership development, but this can change. Our report, High-Impact Leadership: The New Leadership Maturity Model 3 explains how.

1 In general terms, “organizational context” refers to the various attributes in the work environment that may influence a group or individual (such as a company, division, department, work group, work role, etc.), and which have the potential to affect performance, attitudes, and behavior. These attributes include management processes, and organizational culture and systems, among others.2 Based on more than 40 interviews with senior HR and business leaders in 2015.3 High-Impact Leadership: The New Leadership Development Model, Bersin by Deloitte / Andrea Derler, PhD, 2016.4 Leadership Development Factbook: Benchmarks and Trends in U.S. Leadership Development, Bersin by Deloitte / Karen O’Leonard and Jennifer Krider, 2014. 5 Global Human Capital Trends 2016: The new organization—Different by design, Deloitte Development LLC and Deloitte University Press, 2016, http://www2.deloitte.com/content/dam/Deloitte/global/Documents/HumanCapital/gx-dup-global-human-capital-trends-2016.pdf.6 Based on our High-Impact Leadership Research, 2016.

Percent of LeadersBuild talent for competitive advantage

Inspire people to follow them

Drive change and innovation

Provide vision and direction

Create synergies through working in partnership

Persuade and influence stakeholders

Execute and achieve results through their people

Show commercial acumen and business judgment

44%

47%

48%

50%

51%

56%

60%

60%

Source: Bersin by Deloitte, 2016.

Figure 1: Leadership Capability in Organizations6

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About Bersin by Deloitte

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Our research reveals that the exclusive reliance on programs as the only means of leadership development is one of the primary reasons for the lack of leadership talent. Instead, the most effective organizations tend to build leadership growth into their very DNA—they put systems, processes, cultures, and practices in place that support leaders in their daily development. Our new Leadership Maturity Model (see Figure 2) outlines leadership growth on lower versus higher levels of leadership maturity.

Higher Leadership Maturity Pays Off

As compared with companies that focus only on formal leadership programs, we found that most organizations which utilize their organizational context for leadership growth7:

• Have 37 percent more revenue by employee

• Are 5 times more likely to anticipate and respond effectively to change

• Are 10 times more likely to be effective at identifying and developing leaders

• Are 11 times more likely to have a high number of leaders who build talent

In sum, the details of our research expose elements of an organization’s structure and culture that drive leadership capability and business outcomes to a stronger degree. More importantly, the most effective organizations also have structural and cultural components in place that have been shown to positively impact their organizational leadership maturity. Moving up from one maturity level to the next is likely to be a journey for all organizations as they adjust existing practices and expand their repertoires by adding new ones.

7 High-Impact Leadership: The New Leadership Development Model, Bersin by Deloitte / Andrea Derler, PhD, 2016.

Foundational Leadership

Integrated Leadership

Scalable Leadership

Systemic Leadership

Level 1

Level 2

Level 3

Level 4

7%

18%

58%

17%

MASTER 8/16/16: DO NOT EDIT

Source: Bersin by Deloitte, 2016.

Figure 2: The Leadership Maturity Model