The purpose of leadership development is not to develop leaders

It is business optimisation and risk mitigation. Leadership development is simply the mechanism.

That might sound counter intuitive coming from people who spend their working lives developing leaders.

Hear us out. Because this reframe (if you can sit with it for a moment) might be one of the most useful things you think about this year.

First, some numbers worth knowing

Organisations globally invest an estimated $60 billion annually on leadership development programs, and upwards of $336 billion when broader management development is included.[1,2]

A very serious commitment. And yet research consistently suggests that an enormous chunk of that (as much as 90%) does not actually deliver measurable results.[1,2]

So. We’re spending a lot, but we’re not sure how much of it is working. You could argue that only 10% is working, more likely we’re not measuring the things that actually matter.

Why is that?

The problem with leadership development as an end in itself

When an organisation sets out to ‘develop its leaders’, the implied goal is typically ‘better leaders’. Which sounds right. Obvious, even.

But ‘better leaders’ is not a business outcome. It’s a developmental one. When ‘development’ becomes the goal, the thing that gets measured, a subtle but important shift happens. The program starts optimising for the development experiencerather than the business result. Participants are assessed on their growth. Facilitators are rated on their delivery. HR reports on completion numbers.

And the business activity, the decisions that need to get made faster, the friction between functions that’s costing time and money, the key-person risk sitting quietly in the leadership layer, carries on unchanged.

This is not a design problem, well not only a design problem. It’s a framing problem. It starts with the question being asked.

What are organisations actually trying to solve?

Think about the genuine business challenges that land on the desks of CEOs, founders, and senior HR leaders. Things like:

•      We’re growing fast but our decision-making hasn’t kept pace. Either decisions are taking too long or they are still being made by the most senior people 

•      Our functions are working hard but not together. There’s duplication, friction, and re-work at the interfaces.

•      We have three people who could leave and take critical organisational knowledge with them. That’s not a people issue. That’s a risk issue.

•      Our middle layer is full of talented people who are doing work they shouldn’t be doing. And the people below them aren’t growing. (We’ve written about this: ‘the 40% problem’.)

•      Our senior team is smart and capable, individually. But they don’t function as a system. The whole is somehow less than the sum of its parts.

These are not leadership development problems. They are business optimisation and risk mitigation problems. Leadership development, done right, is how you solve them.

This difference in starting point changes everything; the design, the participants selected, the content, the metrics, and crucially, the sponsor. When the business problem is the frame, the CEO cares. When leadership development is the frame, it tends to live on the L&D budget.

What modern organisational complexity actually requires

Here’s why this matters more now than it did twenty years ago.

The organisations that most of us work in or lead, have become genuinely complex systems. Business complexity has increased roughly 6-fold since 19553.  They are fluid, complicated, interdependent and often unpredictable. The leadership thinkers who’ve grappled seriously with this have reached a similar conclusion: the traditional model of leadership - clear hierarchy, tidy authority, predictable chains of cause and effect - is no longer sufficient.

Elliott Jaques (Requisite Organisation, 1988) gave us the insight that cognitive complexity needs to match structural complexity. Barry Oshry (Seeing Systems, 1995) showed that dysfunctional organisational dynamics are positional, not personal - leaders who can see the system stop being captured by it. Alistair Mant (Intelligent Leadership, 1997), an underappreciated Australian, sharpened that lens further with his frog and bicycle metaphor: a bicycle can be dismantled and reassembled improved. But, remove one part of a frog and the whole system shifts, unpredictably and immediately. Arguably, this is the moment that evolution moves from seeing complexity to understanding why treating it like a machine is dangerous and can be fatal. Kim Cameron (Positive Leadership, 2009) demonstrated that flourishing performance requires more than competence; it requires the deliberate cultivation of positive energy in and around the leader. Morieux and Tollman (Six Simple Rules, 2014) argued that as organisations layer structure on top of structure to manage interdependence, they actively undermine cooperation. And Robert Seigel (The Systems Leader, 2025) brought it together: the leader for today’s organisation must operate fluidly across boundaries, timeframes, and tensions simultaneously.

Read together, these thinkers describe not just a set of skills, but an escalating demand. The demand that modern leaders can navigate systems they cannot fully see, inside organisations that are, through no bad intent, often working against their own intelligence.

That capability cannot be built in a two-day workshop evaluated by a feedback form.

It is built when the organisation is genuinely clear about what business problem it is trying to solve, and designs the development journey backwards from there.

What it looks like when the framing shifts

When leadership development is anchored to specific business outcomes, rather than to development as a virtue in itself, a few things change noticeably.

•      The design begins with business objectives: how do we optimise business performance and minimise risk?

•      The content is connected to real work: the actual tensions, interdependencies, and decisions that people are navigating right now

•      The metrics are business metrics: speed of decision-making, removal of non-value-adding work, cross-functional collaboration, retention of key people, peer leader feedback, risk indicators

•      The sponsorship sits with the CEO and senior leaders

•      People professionals within the organisation are critical for success – without them, none of this gets done. But their ambition is the business and its performance, rather than ‘development’ metrics

The results, when it’s done this way, can be compelling. 

Research puts the average return at around $7 for every $1 invested [4] in well-designed programs. One major technology company’s coaching initiative reportedly contributes approximately USD $1 billion to annual operating margin. Hitachi Energy implemented a targeted leadership strategy and saw salaried turnover fall by 80% within a single year.

These are business stories. Leadership was the mechanism.

A useful diagnostic

If you want a simple test of whether your current approach is framed around business outcomes or development-for-its-own-sake, try asking these questions of whoever sponsors your leadership development investment:

•      What specific business problem is this designed to solve?

•      How will we know, twelve months from now, whether it worked?

•      What’s the cost, in dollars, in attrition, in strategic delay, something else, if it doesn’t?

If those questions produce clear, confident answers: you’re in good shape.

If they produce a pivot to NPS scores, a discussion about ‘culture’, or a long silence … the framing conversation is probably worth having before the next program kicks off.

The uncomfortable truth

We love leadership development. We have devoted careers to it, and we have seen what it can do when it works.

But it works because of what it delivers to the organisation, not simply because it happened.

The most thoughtfully designed, warmly received, expertly facilitated leadership program in the world will deliver precisely nothing if it isn’t solving a real business problem.

The question is never “did we develop our leaders?”

It’s always “did the business get better?”

Sources

1  Geerts, J.M. (2024). Maximising the Impact and ROI of Leadership Development. Behavioural Sciences, 14(10), 955. University of Cambridge / University of Ottawa. https://www.mdpi.com/2076-328X/14/10/955

2  Quarterdeck Leadership Research (2025). Why Leadership Development Programs Fail. https://quarterdeck.co.uk/articles/why-leadership-development-programs-fail

3  Morieux, Y. & Tollman, P. (2014). Six Simple Rules: How to Manage Complexity without Getting Complicated. Harvard Business Review Press.

4  BetterManager / The Fossicker Group (2023). ROI of Leadership Development Study. Summary at: https://www.newlevelwork.com/post/7-for-1-a-breakthrough-in-corporate-leadership-roi-2023-research

Intel coaching ROI and Hitachi Energy turnover data: Quarterdeck Leadership Training Statistics (2025). https://quarterdeck.co.uk/articles/leadership-training-statistics/