Leadership training seems to touch virtually every business professional. It’s the second largest spend for training organizations (behind IT) and represents more than $2 billion of global annual spend. It’s obviously a large market as it touches an estimated 30 percent to 40 percent of a company’s workforce. And with more than 70 percent to 80 percent of a company’s workforce now knowledge-based workers, leadership skills are more in demand for team leaders and project managers.
My experience has found that the most important aspect of leadership training today is relevancy. Courseware should be relevant to the people they lead, and the tasks the leaders perform on a daily basis. Effective leadership training requires an element of customization. Off-the-shelf courseware is good for knowledge, but lacks the application to the company’s specific needs. We have found that the suppliers who are best at customization are viewed as best in their market.
The leadership training market has evolved into three distinct segments; each organized around the audience they are intended for, as well as the relevant tasks the leader needs to perform.
The first and largest market segment is front line leadership training. It targets those who lead non-management employees, and represents the first tier of the management pyramid. Because it touches so many professionals, it is the first leadership development programs that new, up and coming management professionals participate in, and it’s where the basic and most fundamental skills are developed; where habits are formed and long-term values developed.
The second market segment, middle manager training, is the one that I believe is the least appreciated and most under represented in the market. By its name we see that it targets professionals in mid-management roles - essentially leaders who manage leaders. Content for this audience is often similar in context to first line training, but different in that it’s modified to address both the business skills necessary to manage a functional organization, as well as the skills necessary for managing multiple teams. There are lots of reasons why this segment gets less attention than the others. Some think they have already been trained, others believe it’s an area where the company can avoid spending, yet others think the skills are similar to the other leadership programs they’ve already completed.
The third and very visible segment is executive education. Targeting the senior executives in the organization, this segment is predominantly serviced by business schools, large training suppliers and niche consultants. Content generally focuses more on market and functional business knowledge than personal communication skills. And not to be overlooked in this segment is executive coaching services. We find this segment to be the smallest of the three markets in terms of spend, but the cost per training day the highest.
From where I sit, internal training organizations should be putting more emphasis on supporting this level of the organization, with a plan that the knowledge, skills and best practices will more effectively trickle down.
Note: Originally published in the 2012 Summer Edition of Training Industry Quarterly.