Companies have always needed leaders who are good at recognizing emerging challenges and inspiring organizational responses. That need is intensifying today as leaders confront, among other things, digitization, the power of data analytics, and the ability of artificial intelligence to automate the workplace and enhance business performance. The need for developing leaders has never been more urgent.

An important piece of the puzzle

Majority of the companies realize that to survive in today's volatile, uncertain, complex, and ambiguous environment, they need leadership skills and organizational capabilities different from those that helped them succeed in the past. There is also a growing recognition that leadership development should not be restricted to the few who are CEOs, departmental heads or board members as employees across the board are increasingly expected to make consequential decisions that align with corporate strategy and culture. It's important, therefore, that they be equipped with the relevant technical, relational, and communication skills. They need to be developed into leaders.

An important piece of the puzzle

For years, companies have spent time and money on improving the capabilities of managers and on nurturing new leaders through various conferences and management/leadership programs. Unfortunately, there is overwhelming evidence that the plethora of services, books, articles, seminars, conferences, etc. -- a global industry that has been estimated to be now worth more than $50 billion -- are delivering disappointing results. According to a recent Fortune survey, only 7 percent of CEOs believed their companies are building effective global leaders, and just 10 percent said that their leadership development initiatives have a clear business impact.

Then there are also key personal traits.

So what is it that companies fail to recognize when focusing on initiatives for developing leaders? It is context, which is a critical component of successful leadership. A brilliant leader in one situation does not necessarily perform well in another. Most training initiatives and leadership development programs rest on the assumption that one size fits all and that the same group of skills or style of leadership is appropriate regardless of strategy, organizational culture, or the industry in which the company or the leader operates.

The fact is that each company has certain unique needs and depending upon the stage of its organizational and business development, specific leadership traits are required. In case of companies requiring its managers to support an acquisition led growth strategy, the company will probably need leaders brimming with ideas and capable of devising winning strategies for new or newly expanded business units. If the need is to grow by capturing organic opportunities, the company will probably want people at the top who are good at nurturing internal talent.

Focusing on context inevitably means equipping leaders with a small number of competencies (at best two to three) that will make a significant difference to performance. Instead, what we often find is a corporate wishlist with a long list of leadership standards, a complex web of dozens of competencies, and corporate values statements. Each is usually summarized in a seemingly easy to remember way outlining key traits and each on its own terms makes sense. In practice, however, what managers and employees often see is just a long list of corporate jargon and recommendations.

When a company cuts through the noise to identify a small number of leadership capabilities it considers essential for success in its business such as high quality decision making or stronger operational skills -- it achieves far better outcomes