27th February 2020
Hi, this is Dr. Mike Allan, executive director at MLQ plus. Today I’m going to be talking a little bit about the value of leadership training, and whether it really is effective and does it improve efficiency in the organisation? For the point of view, first of all, what do we mean by leadership training? One of the biggest issues that we find or I find, in particular, when dealing with MLQ Plus and talking about leadership is that people don’t understand that there is a difference between the word “management” and “leadership”. And often it’s used interchangeably within the business world. However, that’s not correct because leadership and management have two very distinct skills. Management is essentially a process or tasks-focused and it centres on the current and immediate future of the organisation. A cue word for it is management is about the “status quo”.
So it’s about putting in place processes, procedures, measurement, and then maintaining that or implementing it and replicating it. In contrast to that, leadership is much more people and future focus and includes things like setting the culture and direction of the organisation, and is much more future focused and much more development, transformational change focused. So management quite often is about a set of technical skills and leadership is very much a set of interpersonal skills. They’re skills sets and like most things they can be developed. But they are very different and you quite often find people who are really good managers, who are really good leaders as well. But quite often people are stronger in one space or the other, so they’re really good leaders, not quite so good in the management space or really good managers, not quite so good in the leadership space.
Peter Drucker, the sort of management guru argued that leadership can’t be taught or learned, but rather it was down to an innate talent and charisma. However, research tends to indicate the contrary. A review of studies of heritability and human development by [Bruce] Avolio & [Sean T.] Hannah in 2008 concluded that 70% of leadership capacity was built through experience, not through some sort of genetic expression. In other words, what they were saying is leadership is learned. Now where it gets confusing is some people believe that you can’t learn leadership from a book, that you need practical, definitive experience or you need to have been exposed to certain things as you grow up, particularly in your formative years; your teenage years. And therefore you become a natural born leader. And there is an element of truth in this in the sense that people who are exposed to the opportunity to lead or the opportunity to show leadership and step forward because of some natural characteristic, might be termed born leaders but in reality they learnt by trial and error.
Now they might be paying more attention and going, “that worked, that didn’t work. I’ll do what worked again and I’ll stop doing what didn’t work and see whether that actually gets me the result I’m looking for”. But in essence, even though it’s in their formative years, they’ve been learning a set of behaviour that works in order to achieve an outcome, which is to get people to follow them, people to do what they as the leader want them to do in order to achieve a particular outcome, which is what leadership is all about. And that is developing this set of interpersonal skills. So quite often when you are being asked as a consultant or as a facilitator by an HR director or a CEO, “Oh, I think we need some leadership training”. One of the first things is to be really clear. What do they mean by leadership? Because it’s not unusual for them to be using the word leadership, but what they actually mean is management skills. A set of technical skills. “We just need our people to be better managers”. That’s something very different and obviously if that’s what they want, you have to decide whether you as a consultant or as a facilitator provider can provide that or whether like we are at MLQ Plus, that’s not the area that we really work in because we’re leadership specialists and specialise in delivering and measuring leadership development.
In most cases, one of the questions that comes up as well is around what do people mean by leadership? What exactly are they talking about? And this causes an awful lot of confusion. I’ve spoken about it before, and I’ll just reiterate it again; in my experience, a lot of leadership training fails because people don’t understand how leadership fits with their business. They just want leadership training because we need leaders in the organisation and they recognise that they’ve got good managers, but they need to have good leaders. And so they just call it “leadership training” and then they start talking about what we need to do something around emotional intelligence, or we need to do something around fierce conversations or we need to do, give them some training and feedback. And it’s all a bit ad hoc.
Quite often, in order for leadership training to be effective or leadership development to be effective, you really need to be clear about which model you’re subscribing to and what it is that you’re trying to do. So quite often I talk about, well, we’re specialists in transformational leadership, and this full range leadership model of which transformation is a key part. And this is what the model looks like.
Does it work? Yes, all the evidence and research shows us that over 500 peer reviewed studies over 5,000 articles worldwide that the MLQ Plus measures what it says it’s measuring, but that the full range leadership model has been incredibly successful when being implemented around the world. And there are numerous studies from a study with the American Navy, where they took 500 new recruits and put them into one group at random and another 500 recruits into another group at random. The first group they taught the traditional leadership style that the Navy was teaching in the United States at the time. This was I think 2006/2008. And the other group, they trained in the full range leadership model, transformational style leadership. They then followed those people for five years once they left to see how they were rated by their subordinates and by their peers, and how successful they were there in their role. There was a significant difference and such a significant difference that Annapolis, which was the head center for recruitment in the United States transferred to training all their officers in the leadership style, which was the transformational style, full range leadership model. Significantly, their peers rated them more highly, their subordinates rated them more highly, and they were more successful in achieving organisational outcomes, which enabled them to get promoted much faster than the candidates who were trained in the old style, which was a little bit more autocratic, bureaucratic and transactional. So the American Navy transferred to that and subsequently, the army and marines have also moved to that style as well.
There’s also evidence in the commercial field, in banking with the Canadian bank that trained people on the West coast. So we’re talking about Vancouver over that side of Canada on the West coast in transformational style and in the East coast on the old style of autocratic bureaucratic leadership; transactional and then tracked how well those leaders were able to deliver on the organisational outcomes. There was such a dramatic difference that obviously they trained all their leaders in this style, subsequently. But the biggest one was staff transferring from the East coast to the West coast. So they saw a rise in people leaving on the East coast and actually moving to the West coast to be more successful because they wanted to work for leaders who were going to develop them and promote them, and obviously were going to get the very best out of them using the transformational style. And so dramatically affected sales and also turnover of staff.
There’s been anecdotally numerous studies done to show “is this style more effective than any other?”. The US postal service recognises the need to improve leadership effectiveness. They engaged the leadership development program of several gears, which was in the transformational style. They estimated that there was an eight point $8 billion saving through, productivity, customer satisfaction, and the elimination of debt. So improving the financial performance, yet it is effective.
According to the Harvard business review, one of the key ingredients in building a performance culture is having leaders who’ve developed insights into their strategy, their people, their organisation. These leaders have also developed the capability to lead authentically and vulnerably with discipline and tough empathy, intuitive thinking and decision making, all being part of the transformational style. And effectively this drives their performance culture because it plays to people’s strengths and also their respective differences. So when we look at modern workplaces and modern organisations, which are trying to drive a more diverse workforce, a more diverse range of thought in order to create new ideas and new innovations and everything else, this transformational style drives the performance culture that allows that to happen.
Bersin and Associates, research and advisory service, found that companies with a measured and strategic approach to leadership development we’re 84% more effective, increasing the quality of their leadership pipeline, and 73% more effective in improving employee retention than organisations that had a non ad hoc approach to leadership development. And this is where I was talking about being really clear about what your model is, how it fits with your organisation and why you would put in a transformational leadership program as opposed to anything else because it fits with your organisation and what you’re trying to do. They also found that there were 60 organisations that had this approach and were very clear about a strategic approach to leadership development were 67% more effective at increasing the engagement of their leaders at work. So the leaders actually wanted to work for the organisation. And I can relate anecdotally to this because I worked for a major airline; British airways, and they invested a huge amount of money into developing their leaders in the early nineties as part of a culture change program.
And anecdotally I was on the receiving end of that but later on was at the driving end of implementing a lot of the culture change program that went along with it and saw how it really affected the way that teams of individuals related to their leader. And my experience with this was I was given most probably the most dysfunctional team out of 23 teams. The team was made up of about 480 people. And they were bottom of the league table, so they were number 23 on the league table. When I took over this team, I’d been trained in the transformational style by British airways and implemented the ideas; experimented a bit admittedly, but I did it myself. And at the end of an 18-month period we had spent four months; the last four months of that 18 months at number one or number two out of those 23 teams. People were quite taken aback because my team had been made up of the people that other teams wanted to give away. So they weren’t going to give away their stars, they were going to give away their problem people. So my team was effectively made up of a lot of problem people. But the transformational style was something very new, very different and was very effective, and is now adopted across that organisation. Although I have to say that this was in the 1990s.
The other interesting bit is research has shown us and particularly in the healthcare sector, that high quality leadership influenced the organisation’s readiness for change and its effectiveness in implementing change. Departments with high quality leaders were able to respond more effectively to change and even patients report to be more satisfied with the outcomes of change in these departments. And this is about, well, “is it effective?” Well, if you think, what effective is we want to increase the organisation agility in order for our ability to be ready to adapt to and accept change. Then if you’re going to have a massive change program of some kind and most organisations are now having really good transformational leaders, actually the evidence shows us, backed up by research, that really good leaders and transformational leaders are more successful and help the organisation to implement and adapt a change by being organisationally agile.
We talk about effectiveness; quite often people are confused about, well, what is effectiveness? How do we define it? It really is–effectiveness is “are people doing what they should be doing and they know what they should be doing”. They can tell you as their boss or as the person asking, maybe you’re the CEO, “this is what I should be doing or my understanding this is what I should be doing in order to deliver this, which is the outcome that I understand the organisation is looking for.” And quite often they’re able to say, “and this is what I should not be doing. Well actually that’s not my job. If I’m doing that, I’m not able to do this. And my understanding is that you want me to do this in order to get this organisational outcome.” So effectiveness is a clarity that the employee has from their leader around what they should and should not be doing.
Equally, efficiency is, are people being efficient? Well, efficiency is a relative term and organisations define it differently and can quantify it differently. But quite often, efficiency is linked to effectiveness. So if you don’t know what the measure of efficiency is, producing efficiency is producing 500 widgets a day; this is what you need to do in order to produce 500 widgets a day. If you do this, you won’t be able to do it. If you do it like this, you will be able to do it and that will get you your 500 widgets a day. And therefore we’re being as efficient as possible. That is linked to effectiveness.
Efficiency can also be around how you innovate. So quite often organisations are trying to become more efficient, but they get stuck in “we don’t quite know how to do it”, “we’re not getting anything from our people, on our employees and we’re not getting it”, and that’s quite often when they look at managing a process and putting a process in place to manage it. When you are looking in the leadership space, efficiency becomes about, well, having conversations with the people and particularly in the full range leadership model, looking at the space which is in innovation and asking the questions, “is that a way that we can do this faster, more differently, more effectively, more efficiently than we’re doing at the moment?” And it’s amazing how the person who’s the expert right there on the shop floor will quite often come up with some real early good ideas. Equally they’ll come up with some bizarre ones, but they will come up with some really good ones that may help in that situation.
So when we talk about “is leadership development, really the key to efficiency and effectiveness?” It most probably is the key to being an effective organisation. So you can put out every newsletter under the sun. You can put out every policy under the sun, but unless the leader is clear about what they are following up with, with their employee and the employee trusts that leader. So when the leader says, “I just need to have a conversation around what I just saw, why would you be doing that? My understanding was that we’ve started to–we’d said that we weren’t going to do that any longer because it wasn’t effective and it was a waste of time. Can you just explain to me what happened” and everything else and then went, okay. So I understand that. However, it’s giving feedback on the spot, managing the process, but it’s clear about what they’re trying to do, and trying to get the employee to be as effective and efficient as possible.
So when I’m asked in summary, when I’m asked about leadership training and its value, and is it effective and how do you do that, the first thing I always do is go, well, what do you mean by leadership training? What do you mean by leadership? And I get some clarity: are we talking about management or are we talking about leadership? And when we’re talking about leadership, what model of leadership are we talking about? What is the organisation trying to do and trying to achieve? In most cases, they’re looking for it to be effective and efficient, and also for their people to be happy. So they’ve got issues of retention, morale, culture, all that sort of stuff. But that always fits with the outcomes of the full range leadership model, which goes, if you do these things in the transformational and transactional areas, obviously avoiding or minimising the passive avoidant behaviours, you get these outcomes, which is extra effort productivity from your people. You get highly effective employees who are really clear about what they should and shouldn’t be doing, and they enjoy working with their leaders. And so therefore, it does improve the financial performance, drives a performance culture, attracts and retains talent and increases the organisational agility.
There is some evidence as well, some new research that’s been coming through in the last few years to also indicate that transformational leaders actually have a better safety record. So in the health and safety area, and particularly in safety critical industries, transformational leaders have a better safety record, and have a better outcome than leaders who don’t follow the transformational style. That research is still ongoing, but not only from good research evidence, but anecdotally having worked with a number of energy companies and implemented in water companies, electricity companies, the full range leadership model, and the transformational style, we’ve seen evidence of their safety incidences going down and obviously a willingness for employees to engage with leaders over safety issues. So highlighting things, believing that the leader will behave appropriately when they point out that something is a problem and that they’re not going to suffer for bringing things to light. And so the safety culture improves. And as a result, the number of instances go down and the organisation achieves what it’s looking for.
Obviously, we’re always looking to develop individuals and retention. Although not a major issue at the moment, we go through these peaks and troughs. We know that the evidence shows us that retention is a major issue for organisations, particularly when they’ve invested in leadership training. And so one of the things to quite often think about and can be beneficial for the organisation and also for the provider is although the leadership training might be targeted at a particular level of the organisation, that the other levels, whether above or below are also involved in some sort of understanding around what the full range leadership model is and what transformational leadership is all about. Because if suddenly you have one layer of your organisation trained in transformational leadership and then others are not, the thing can get very difficult because transformational leaders, I say one thing and transactional leaders are behaving in a very different way. And we’ve seen this in an organisation, particularly I can think of in over 10 years ago now where a number of departments from top to bottom of an organisation with five sort of very separate structures. So two of them were trained in the full range leadership model and the transformational style. And the other three weren’t. And what they found is a lot of people moving from the three that weren’t to the two that were because they wanted to work with those leaders. And anecdotally they heard that the leaders were great and it was very different and a very different culture, a very different way of leadership.
And the organisation was very structured, a little bit rigid and very autocratic in its management style. And then suddenly out on the right hand side, so to speak, were these two divisions that were behaving in a very, very different way and developing very different cultures. In hindsight, I most probably should have advised that organisation earlier what might happen but I didn’t. And when it came to light, it took a bit of convincing to really convince the executive team and the management team that if they wanted to stop the drift and stop the problems, they really needed to invest more money in developing the leaders in the other three divisions. Unfortunately it took about a year before really, one, the budget was available, you know, two, the decision was made and three, it got implemented. And in that time the drift had got most probably to a very critical stage. So there was a little bit more clearing up to do and a fair amount of bringing in new people into the organisation and training them up as well in order to bring everything up to speed. Eventually, all five divisions were trained and the retention issues, the drift and everything else were solved. But in hindsight, as a consultant, I should have been more aware of what potentially might happen given that the organisation really started off going, “we just want to look after this one division because that’s where we’ve got a problem.” In hindsight, I should’ve raised the fact that like the Canadian bank, if you train one division in this and not all the others, you will get drift and you might have some cultural problems because the culture in the division that’s had the transformational training will start to be very different. And people will want to be part of that.
So are there some downsides to transformational training? Yeah. transformational leaders are way more successful. They attract people to them. They quite often take people with them, so when they’re promoted, they’ll take people with them because people want to work for them. They’ll quite often go to another organisation and take people with them as well. So, yes, there is a downside, but I would argue that when you start talking about the difference in efficiency, when you’ve got a proper leadership pipeline, 84% more effective in the quality of their leadership pipeline, 73% more effective and improving employee retention and 67% more effective, increasing the engagement of, you know, leaders at work, organisations that are implementing the transformational style and have gotten effective and strategic approach to their leadership development by having a really good program in place are going to win hands down even if a number of employees leave and take some people with them. It happens all the time. People move organisations for all sorts of reasons. But people are leaving not because they don’t like the organisation or they don’t like the leaders that they work for, they’re leaving because they’ve got a better opportunity or you know, they just need to move across the country or whatever it is.
So when I get asked are leadership programs effective? I generally say yes, and this is why, particularly in the transformational area, and when they don’t work, why don’t they work? Well I would argue that quite often, upfront, the organisation and the provider of the program haven’t really been clear about what the organisation is trying to achieve and hasn’t clarified for the organisation. Well, this is management. This is leadership. This is the style of leadership. This is the model that we use and this is why our program is structured the way it’s structured is because this is where we’re at. And that’s what we do. Some organisations will not want that and that’s just the way it is. But if you’re going into an organisation and they’re expecting one thing and you deliver something else, I would argue that you’re going to have a problem. So for me it’s always been very clear up front at the initial conversation or the subsequent conversations around what it is that the transformational style of leadership and the full range leadership model is all about.
Thank you very much for your time. Once again, if you’ve got any questions, please don’t hesitate to email us or get in contact with us and with some of the webinars and the online blogs, we’ll try and answer those questions for you. Thanks very much for your time. Goodbye.