Today’s business context—marked by globalization, more and varied stakeholders, and economic, political, and social instability—presents unprecedented complexity. The need for strong leadership and talent has never been greater than it is today, driving the need to focus on:

• Recruiting and retaining leaders and talent amid a growing global talent shortage
• Maintaining a robust pipeline of strong leaders and talent to drive strategic objectives
• Ensuring that workforces and leaders have the necessary skills and capabilities to drive business impact

Yet most organizations lack this focus, making the problem both ongoing and systemic. In an annual global survey conducted over the last eight years, “managing talent” and “improving leadership development” have consistently remained in the red zone of future importance and low current capability.

To address these challenges, companies are investing in suboptimal leadership development and talent programs. The programs often focus on certifications versus learning. They take place outside of day-to-day business, are disconnected from companies’ strategic business priorities, and often are not harmonized with one another or with companies’ talent systems. This approach is both resource-intensive and value-draining—and leaves companies no better able to achieve strategic business objectives.

The key to sustainable business performance is a tight linkage between capability-building and value creation. Either done in isolation of the other leads to inferior, unsustainable outcomes. Together and tightly integrated with value creation, leadership and talent development can be an engine by which companies consistently outperform against objectives—and competitors.

Companies that are able to effectively link value creation with capability building and talent development gain significant tangible value.