Wanted: Better Leaders

The year 2006 promises to be another year of growth for the training industry. Overall training budgets are on the rise—increasing an average of 5 percent over last year. This year, U.S. organizations will spend a total of $46.6 billion on training (including staff salaries), with $14.8 billion budgeted for external products and services.

So, what are organizations spending their money on? One major area is leadership training. In a recent survey, Bersin & Associates asked training managers to identify their highest priority programs, in terms of spending and resources, for 2006. More than one-third of training organizations cited management and supervisory training as their first or second priority in terms of spending and resources. On average, organizations are spending more than $4 out of every $10 (about 43 percent) on top-priority programs.

Several drivers are behind the focus on leadership development. Census data shows that over the next 10 years, retirement rates will increase significantly, causing a vacuum in the ranks of middle management. Forward-thinking companies are acting now to groom current and prospective managers to fill the void. At the same time, there is a growing push for better talent management, as more strategic HR organizations try to integrate leadership development with corporate-wide performance management, succession planning and pay-for-performance programs.

More sophisticated organizations recognize that leadership development is more than training and are implementing long-term programs incorporating other forms of development such as mentoring, coaching, job rotation and stretch assignments. These organizations align leadership development with the business strategy and other human capital management processes.

Despite the widespread adoption of e-learning, leadership training is still primarily instructor-led and delivered in classrooms, conferences or coaching sessions. The emphasis on "live" interaction is natural since leadership training typically has cultural and team-building requirements, as well as simulations and case studies that benefit greatly from interactive discussion and debate. However, many companies are beginning to use online delivery methods in combination with more traditional training to develop leadership skills. Online reference materials, required readings, pre requisite online courses, searchable content for performance support and online discussion forums are now being used to supplement traditional class experiences.


Kim Lamoureux is a senior analyst directing research in leadership and executive development for Bersin & Associates ( www.bersin.com). E-mail comments to edit@trainingmag.com.