Leadership development requires a commitment from the top, starting with the CEO. It is the oxygen of a healthy culture and must permeate every level of the organization. Good leadership drives organizational health, which drives profitability. In a healthy culture, all leaders of the company focus on continually identifying, recruiting and developing future leaders throughout the organization.

Well-developed leadership programs integrated into the organizational culture are essential. Often, however, they are short-term, sporadically funded and viewed as non-critical expenditures, especially in bad years. Although U.S. companies spend plenty on these programs (about $14 billion annually), frequently they are one-off "solutions," not continuous, deliberate efforts to assure that the culture incorporates ongoing development.

Effective leadership often requires behavioral change based on introspection. In order to change, leaders must examine their own mindsets and adjust their underlying beliefs. Oftentimes leaders have both conscious and unconscious assumptions that can sabotage themselves and their organizations. For example, a manager might be reluctant to give someone an assignment based on an underlying belief that only the "boss" should be responsible for key decisions or critical projects, or they are simply unable to relinquish control. In a healthy culture, the leaders are teachers, delegating and supporting active learning, becoming coaches and mentors in order to increase the leadership capacity of the team.

Data shows that building the leadership pipeline, a key responsibility of management and boards, is in short supply in most organizations. Deloitte's survey reports that only 32% of organizations have succession planning for top-level employees, despite the fact that significant numbers of senior leaders will be retiring in the near term, while a mere 18% hold leaders accountable for recognizing and developing successors.

Many organizations limit leadership development to select employees at the top. The key to success of any organization is a focus on developing the leadership competencies of middle managers. Since this level is doing the bulk of the work and these are the people that engage most quickly and truly appreciate development opportunities, organizations should focus their efforts here and create a talent pool to improve current results and accelerate the succession planning process.

Data-driven tools can help assess efficacy by measuring leadership competencies and effectiveness before and after program participation. Organizations can then discern what works best and what changes are needed for continuous improvement.

In a healthy culture, leaders at all levels become stewards of human and financial capital. High-performing companies that invest in leadership reap the benefits. Organizations that cut education at the first sign of a downturn will continue the downward spiral.

Stuart Levine is chairman/CEO of Stuart Levine & Associates LLC. He can be reached at 516-465-0800 or [email protected].