You don’t need a multi-million-dollar budget to develop leaders—you can get creative and still achieve impactful outcomes.
Leadership development is a hot topic, yet many companies find that their investments aren’t yielding the results they hoped for. Despite global organizations spending more than $60 billion annually on leadership development programs, a Forbes article highlights some staggering statistics:
- Only 25% of companies believe their leadership development programs are delivering high value to the company.
- Only 24% say their leadership model is “up to date” or “highly relevant.”
- Only 11% of companies embrace mentoring, and only 18% provide coaching to managers and leaders.
- Only 15% actively monitor and mitigate leader burnout.
- Only 17% of companies are increasing their leadership development budgets.
- Just 17% have a succession management and leadership assessment process in place.
- Only 26% of companies feel prepared for an unplanned or emergency CEO replacement.
In this article, we explore insights from Malvika Jethmalani, a seasoned CHRO, who shares her experiences with leadership development initiatives across organizations of varying sizes.
From applying the 70-20-10 model to using practical metrics like internal promotion rates, Malvika’s perspective sheds light on the fundamentals of impactful leadership development and what companies should consider before investing further in these programs.
Q: To start, could you share your perspective on what makes a leadership development program truly effective? What key elements would you include?
Malvika: We’re all painfully aware of the state of leadership development in the HR world. In terms of how I think about leadership development, it’s a good place to ground ourselves in a common definition and language.
When we say leadership development, a lot of leaders immediately think of training. But the reality is, training is only 10% of how we learn.
If you look at the 70-20-10 model, a commonly used framework in organizational learning,
- 70% of our learning comes from on-the-job, practical experiences. Think about stretch assignments, leading a cross-functional project, and learning by doing.
- Then, 20% of our learning comes from what I call social learning—working with and learning from others, typically coaches, experts, or mentors who are experts in the area you’re trying to master. This is learning from the experts.
- Only 10% of our learning comes from content—reading a book, attending a training, a workshop, or a webinar.
So while a lot of people automatically jump to training, it’s only a small part of how we learn. A good leadership development program incorporates all three aspects of the 70-20-10 model.
I’ve rolled out leadership development programs in all shapes and sizes for multi-billion-dollar companies with massive budgets, where we took leaders away from their day jobs for week-long programs in a classroom or workshop style, learning from each other in a cohort setting.
I’ve also rolled out programs in startups on a shoestring budget. In both big and small scenarios, you want to make sure you’re incorporating the 70-20-10 in designing leadership development programs.
Q: Can you share an example of what a leadership development program looks like at a startup versus a larger organization?
Malvika: Sure, I’ll give you examples from both ends of the spectrum.
The 70/20/10 model for leadership development at startups with a low or zero budget
When I was a CHRO at a startup, capital efficiency was critical, and I had almost no budget for leadership development. But I knew our leaders were eager to learn and become better leaders for their teams. I also had the full support of the CEO and C-suite, who were serious about leadership development, though we couldn’t allocate significant funds at the time.
So I got creative. I started a couple of book clubs, where every few months, we’d pick a leadership book, read it together, and then have facilitated discussions. This approach naturally incorporated the 70-20-10 model for leadership development: the 10% came from the books (structured learning content), the 20% was achieved through facilitated discussions where I’d invite other C-suite members, and the 70% happened as leaders applied insights from these discussions to tackle real, on-the-job challenges.
Through these dialogues, we not only explored what it meant to be a good leader at our company but also brainstormed solutions to real people-related challenges leaders were facing.
For frontline or mid-level leaders in a startup, the idea of stepping away from their teams to work on themselves can seem impossible. So, when you offer something like a book club, which is low-commitment—once a week or every couple of weeks—it’s easier to sell to the CEO.
This program solved two problems.
- Not only did managers learn from each other, but it also created camaraderie among leaders, especially middle managers.
- That group eventually became a focus group for employee experience programs, which was an unexpected but valuable outcome!
Another initiative I implemented was similar to the book club. At another startup where I was CHRO, there were trust issues—employees struggled to trust their leaders, and leaders struggled with accountability and performance management.
We started a leadership workshop where, every two weeks, one leader would bring a people-related challenge they were facing, and we’d workshop it together. This allowed leaders to see the real challenges their peers were facing, learn how others were thinking about solving them, and get advice from HR or the C-suite. It was a great way to learn from each other. We called it a leadership problem-solving workshop.
The 70/20/10 model for leadership development at large organizations with a large budget
On the other end of the spectrum, in larger organizations, I’ve had multi-million-dollar budgets.
- For the 10% (training), we’d hire top names like Blanchard or Forum to run world-class workshops. We’d take leaders off-site for several days for cohort-based workshops focused on case studies and interactive learning.
- We would also bring in executive coaches to work with leaders one-on-one or in team settings, covering the 20% (social learning).
- Afterward, we’d work with each leader’s manager to provide real on-the-job experiences (the 70%). For example, if a leader needed to improve change management skills, we’d assign them to lead a cross-functional change initiative. The program was highly personalized and involved a significant investment of resources.
So, whether it’s a book club in a startup or a high-budget program in a large organization, the 70-20-10 model remains the foundation. You don’t need a multi-million-dollar budget to develop leaders—you can get creative and still achieve impactful outcomes.
Q: Based on your experience working with various companies and leaders, do you find that leadership development is becoming a higher priority?
Malvika: Yeah, I wish I could say it’s changing, but in my work, I talk with founders and CEOs almost every day, and I still spend a lot of time educating them on this exact issue. Many of them know they need to upskill their leaders or address leadership effectiveness in their business, but they often think a single training session will solve the problem. What’s more concerning is that many believe they can do a one-time training, make a big splash, and then set it and forget it—that this will somehow fix everything.
A good leadership development program needs to incorporate not just the 70-20-10 model but also be an ongoing effort.
For example, in marketing, there’s something called the rule of seven, which means a customer needs to see your message at least seven times before making a purchase decision. Whether it’s exactly seven or not, the point is people need to hear a message repeatedly for it to stick. That’s how we consume information and learn as humans.
So, for leadership development to truly work and for leadership behaviors to change over time, leaders need to hear the message consistently, in different ways, and from different sources. It can’t just be a one-time HR-led training. That message has to be reinforced by the CEO, by functional leaders, at all-hands meetings, in newsletters, and so on. That’s when leaders start to realize, “This isn’t just a flavor-of-the-day initiative, our company is serious about this.” Only then will leaders not only change their behavior but demonstrate sustained improvement.
Q: Let’s talk numbers. What metrics would you use to assess the effectiveness of a leadership development program, and what targets were set to measure success?
Malvika: I’ve worked on many, but I’ll give you two of my favorite examples. When I think about the outcomes of a leadership development program, one of the key goals should be to produce high-quality leaders.
- Internal Promotion Rate
The first metric I like to track is the internal promotion rate. You look at all the leadership roles you’re filling within your organization and figure out how many of those are being filled by internal candidates. Many companies I talk to don’t even measure this at first.
Start tracking your baseline. You don’t need to set a huge goal to improve it by a certain percentage right away. Just track it over time to see if you’re making improvements. If you’re not developing and promoting more leaders internally, it’s a sign that you need to tweak your leadership development program.
- Succession Planning
The second metric I track is succession planning whitespace. This looks at all the boxes in your succession plan that don’t have a successor—whether it’s a “ready now” successor or one who will be ready in 12 to 24 months. The more open boxes you have, the higher the succession planning whitespace, and the bigger the risk to your organization—both from a business continuity and employee engagement perspective.
If you start rolling out leadership development programs and track only these two metrics—your internal promotion rate and your succession planning white space—you’ll get a clear picture of whether the program is working. Even small improvements over time can be considered a win!
Q: In your experience, do most organizations have a succession plan in place, or is this generally lacking, given that the statistics suggest a gap in this area?
Succession planning is a topic I’m deeply passionate about, and I’ve written about it recently.
To answer your question, most of the organizations I talk to don’t have it in place, but the majority of the companies I work with are small to mid-sized businesses.
Succession planning conversations are much more common in larger organizations, but in smaller companies, I often find myself not only educating leaders on what succession planning is and how they should approach it but also explaining why it’s important.
A lot of the conversations I have focus on helping leaders understand that succession planning is not about replacing them—it’s about building a strong leadership bench and ensuring the long-term success and viability of the business.
If you want to learn more about Why C-Suite Succession Planning Fails – read this article by Malvika Jethmalani
Q: What would be your top advice for companies that want to build a strong pipeline of future leaders and really make their leadership development count for the long term?
Malvika:
- Don’t treat leadership development as a one-time event. It’s an ongoing effort. For it to be successful, the tone must be set from the top—the CEO needs to support these programs alongside the CHRO for them to be taken seriously.
- A lot of people right now are trying to figure out what the future of work will look like. What skills will we need? With AI disrupting everything, how will leadership need to evolve? No one has all the answers. If someone claims they do, they likely don’t. So, instead of trying to predict the future, I think we should focus on two essential skills leaders will need.
- The first is change management. Workplaces are being disrupted at an unprecedented pace—remote work, hybrid work, AI, pay transparency—the list goes on. Tomorrow, it might be something new. We don’t know what that will be, but if our leaders have excellent change management skills, they’ll help employees navigate these shifts.
- The second is cultivating a learning mindset. We’re in the intelligence age, where things are changing so fast. Great leaders will be continuous learners and encourage their teams to be the same. Learning is a skill we can develop, and if you don’t build a learning mindset and culture, it’s a significant risk to your business. You could fall behind your competition.
In the age of AI, these soft skills will become power skills—change management and a learning mindset are two essential skills every leader should focus on.
If you are an HR or People leader, and want to collaborate for an article – let’s chat!
