Organizations that build a context for leader growth have better business and talent outcomes than those that rely more on traditional leadership development programs, according to new research from Bersin by Deloitte, Deloitte Consulting LLP.

Context refers to systems, processes, cultures, and practices that support leaders in their daily development. Summarized in a WhatWorks® brief, the research findings appear in “High-Impact Leadership: The New Leadership Maturity Model.”

Based on a sample of 2,014 responses from global business and HR leaders from a wide variety of industries, the research indicates that traditional leadership development programs fail to deliver the types of business leaders needed today.

The research instead presents a new “leadership maturity model” which shows that the most mature organizations — or 25 percent of the survey’s global sample — generate better business and talent outcomes than those that rely on traditional leadership programs alone.

“Changing market dynamics, new technologies, shifting government regulations or new customer expectations all require leaders that can understand and respond effectively to seismic shifts that affect their businesses,” said Andrea Derler, Ph.D., leadership and succession research leader, Bersin by Deloitte, Deloitte Consulting LLP.

“Our research shows that organizations that adopt the new systemic leadership maturity model have 37 percent more revenue by employee and were twice as profitable as compared with organizations that focus only on formal leadership programs. They also are three times more likely to innovate, and six times more likely to produce leaders who are collaborative and provide vision and direction than peer organizations that rely solely on traditional leadership development programs.”

Unfortunately, 75 percent of organizations surveyed find themselves at the lower maturity levels and focus primarily on formal training programs as the only means of building leadership talent.

To create the right context for leadership growth beyond formal programs, the new research-based leadership maturity model identifies 17 important practices. In addition to communicating widely what it means to be a leader, some of the most critical practices for building a context for leadership growth call for organizations to:

• Foster closer collaboration between business and HR leaders to define future needs of leaders
• Expose leaders to situations where they can learn from colleagues, clients , thought leaders and external sources
• Encourage knowledge sharing between leaders across the organization and
• Embolden leaders to take risks by supporting, sharing, and discussing new concepts and ideas.

Xerox’s pilot reverse mentoring program provides an example of an organization that encourages the practice of knowledge sharing and exposes leaders to situations where they can learn from colleagues. Xerox views diverse teams as strength. To build on that strength, Xerox is piloting a program where millennial mentors and senior executives meet once per month one-on-one to exchange opinions and viewpoints on topics related to both work and life, leading to greater understanding of the other generation and the changes that affect them both.

See: Senior Executives in Asia More Likely to Favour a Team-focused Leadership Style than Executives in Other Regions

The goal is to leverage information and insights about the business to foster a more effective work environment. So far, Xerox’s team describes the impact of this program as very positive. Future plans include increasing participation across different generations and job functions.

Erie Insurance’s Foundations of ERIE Leadership exemplifies two of the five critical practices identified by the research: it both fosters closer collaboration between business and HR leaders, and communicates widely what it means to be a leader.

Erie Insurance’s vice president of learning worked with business leaders across all levels in the organization to develop a leadership model. Learning leaders then work with business leaders at the mid-level to teach the behaviours of the Erie leader, and share their experiences.

This enables employees to learn about the different lines of business, and to understand how each of them contributes to the overall success of the company, as well as how the Erie leadership behaviors play out in different situations.

When back at work, program participants are held accountable to follow individual leadership action plans. The company also facilitates networking events to help alumni connect and maintain peer relationships formed during the program.

“Our experience advising global clients on building high performance businesses has pointed to leadership development as a critical component of driving business growth,”  said Anthony Abbatiello, principal, Deloitte Consulting LLP, Global Leadership Leader.

“While formal leadership programs remain important, this latest research underscores the need to utilize the organization as a system to develop leaders in their daily context and expose them to sources outside the company that can accelerate their development. The resulting improvements in innovation, collaboration and financial performance demonstrate the value of this contextual approach.”

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