A study from Harvard Business School estimates that as much as 14 percent of the performance of a company is attributable to the CEO. In a study of nonprofits in India, 97 percent of the 203 nonprofit respondents said that leadership development is vital to their organisations’ success.

Yet, investment in leaders remains low. Data available for nonprofits in the US indicates a range of 0.7-1.24 percent of total grant dollars. This is 75 percent less than what the private sector invests, on a per employee basis. No clear benchmarks are available in the private sector, on how much should be invested. That’s not surprising. If we were measuring returns, we’d know if the investment is too much or too little. Thus, we’re left with a situation where leadership matters, but faith in leadership development is low.

A fundamental change in approach can alter this scenario; that of bringing a focus on results and accountability towards outcomes into the business model of the leadership development industry. I like to call it, “Leadership By Results”.

So what is the “Leadership By Results” approach and how can investors and boards implement it? It is based on one fundamental shift that is then operationalized through five key principles.

  1. Link leadership development programmes to key goals
  2. Enable mindset shifts
  3. Ensure a collective, longer-term journey and not a one-time event
  4. Ensure holistic support
  5. Use hurdle rate of return and measure

Read the full article about leadership development by Rajen Makhijani at India Development Review.