Developing high performing leaders at all levels requires a strong alignment between leadership development and meeting business goals.  But even though companies spend nearly $20 billion a year on leadership development, leadership development in U.S. companies regularly falls short.  There must be a better way.

Research Results on LD

A 2015 State of Leadership Development study by Brandon Hall reports that 36% of companies do not even have a formal Leadership Development strategy.  In spite of the fact that managers are responsible for translating strategy into action and achieving maximum productivity from their teams, 51 percent of organizations said their leadership is not at all ready, or only somewhat ready, to lead heir organizations today, and 71 percent said their leaders are not ready to lead their organizations into the future.

According to Bersin’s 2015 Corporate Learning Factbook, US Companies spent over $70 billion in training. Roughly 35% of those dollars went to leadership development, yet again, the overall results fall short.

The Harvard Business Review reports that three-quarters of the 1,500 senior managers at 50 organizations interviewed were dissatisfied with their companies’ learning and development function. Only one in four reported that it was critical to achieving business outcomes.

And leadership development is not only lacking at senior management levels. Brandon Hall also noted the need and opportunity to develop leaders at all levels. 83 percent of organizations surveyed said that targeted development for all leader levels is important or very important. And yet only 5 percent had implemented solutions for all levels.

“[C]ontinued neglect of midlevel management development carries significant risks—managerial burnout, increased turnover,
and ultimately damage to the bottom line—as undertrained managers fail to translate strategy to execution.”

“Danger In The Middle:  Why Midlevel Managers Aren’t Ready To Lead”, Harvard Business Publishing, 2013

Without a focus on lower level managers, who will be ready to take on critical senior leader roles?

Research also shows that that leadership gaps are one of the most pressing issues on the minds of business and HR leaders. According to the BH Year of the People 2016 study there has been a recent shift in how companies view critical strategies for business success.  In 2016, 30% of organizations moved from naming “business strategy” to naming “people strategy” as the key driver of business success. Business strategy came in second, ranking a full 10 points lower.

Coaching improves Leadership Development

One solution that is clearly moving the needle on developing more effective leaders is coaching. Coaching enhances the abilities of leaders at all levels, and therefore can be a significant factor in driving productivity today as well as developing bench strength. Because coaching is customized, individuals focus on specific areas of need. Through coaching, managers learn to lead differently, practice new behaviors and hold themselves more accountable.

A great example is Facebook. They provide every manager with a coaching opportunity, and it’s working. In an interview with Learning Quarterly Magazine, Facebook said that eighty-six percent of participants reported that they learned something new and have applied this learning to achieve valuable and concrete results. 97% of participants found value in the coaching experience.

Whether a company chooses to utilize internal coaches and/or external coaches is a subject of much discussion. Developing the coaching skills of internal managers is beginning to be an area of focus for leadership development, and many studies cite the increased effectiveness of internal managers with good coaching skills. Utilizing good coaching skill may be possible for strong managers, but the expectation that managers can or will carve out required hours per month to effectively coach their teams is not realistic.  And even the best managers won’t have the training and experience of an actual certified coach.

The use of external coaches offers unique advantages such as special skill sets that can be matched to individual needs, no political leanings, or direct involvement in day to day company issues, highest levels of confidentiality making it safe for the individual to have open conversation, and certified external coaches bring a deep and broad base of experience.  An added benefit is that as coaches coach, they are modeling coaching skills in their clients.  However, traditionally external coaches have been considered costly and reserved for mostly for senior level management.

Most organizations would love to provide coaching to their rank-and-file managers and often recognize its potential to transform leadership teams. The challenges are cost and time. Try as they might, “brick and mortar” coaching providers simply have not been able to provide a workable and affordable solution.

Still, an effective coaching program can add to the bottom line.  Forbes notes that “according to an ICF and HCI study, 60% of respondents from organizations with strong coaching cultures report their revenue to be above average compared to their peer group”

Combining coaching and Technology – A Better Approach

Providing coaching deep into organizations requires a new approach– one that is both scalable and affordable. As technology and big data continue to disrupt the HR space, the opportunity is rising to transform coaching in a way that finally allows organizations to provide effective leadership development throughout their managerial ranks

To learn more about how digital coaching works, see our article Technology and the Future of Leadership Development and Coaching.

By Caren Laiosa

Caren Laiosa is a certified leadership coach and former Senior Vice President of Learning. Caren also has held several change management and organizational effectiveness roles.

To learn more about Careerwave’s digital coaching services, contact us at or visit us at

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Photo courtesy of Michael Jastremski