20 Years and Counting: Leadership Development Once Again the Most Critical Issue Facing Organizations in 2010

At a time when leadership and talent management are more critical than ever, few organizations excel in these areas, according to a new study from i4cp.

Findings from the study, now available on the i4cp website (corporate membership required), provide insight into the most critical issues organizations are facing in 2010 within the five domains of high performance. Specifically, the study examines the issues high-performance organizations believe are important, but don't feel they're particularly effective at. The gap between importance and effectiveness provides a ready-made roadmap of issues organizations need to immediately prioritize as targets for improvement.

For the 20 years i4cp has been conducting the study, leadership development has always been a top issue. In the 2010 iteration, however, leadership development has increased in prominence, with a surprising 75% of organizations citing it as an important issue. However, even more startling is that only 23% said they were effective at developing leaders internally - a gap of over 50%. Coupled with findings from another i4cp study, which found that only 14.3% of high-performance organizations have a process for identifying gaps in leadership development, it's clear that companies are struggling to grow their future leaders. Further, recent research has shown that many are now questioning whether the leadership competencies being stressed today are those that will be necessary in the future.

"Finding and developing the right leaders has been considered a top challenge for companies for decades. Our research shows that not only are companies continuing to struggle with finding solutions, but that the problem is actually getting worse," said Jay Jamrog, SVP of Research at i4cp. "Given the volatility of the last year and the accelerated pace of change in the economy, companies should be treating leadership development as both an urgent survival tactic and a business opportunity. The companies that get it right - and several high-performing companies are doing it right already - have potential for great success."

Among the many issues and gaps uncovered in the study, talent management, performance management and innovation stood out as areas where the gap between importance and effectiveness was particularly wide. For example:

• Only a quarter (25%) of our study's respondents said leadership was effective at managing change, yet 74% said change management was important.
• Fully 76% of respondents said performance management is very important this year, but a meager 30% said their companies are very effective at actually doing it.
• Strategy execution and alignment was another area of concern. Though 79% of respondents said aligning the workforce to business strategy was important, only 33% said they were effective at doing so.

The Major Issues surveywas conducted by i4cp in December 2009. The full results of the survey are available exclusively for i4cp corporate members.