Here is a brief excerpt from an article co-authored by Pierre Gurdjian, Thomas Halbeisen, and Kevin Lane for the McKinsey Quarterly, published by McKinsey & Company. In it, they explain how and why sidestepping four common mistakes can help companies develop stronger and more capable leaders, save time and money, and boost morale. To read the complete article, check out other resources, learn more about the firm, and register to receive email alerts, please click here.

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For years, organizations have lavished time and money on improving the capabilities of managers and on nurturing new leaders. US companies alone spend almost $14 billion annually on leadership development. Colleges and universities offer hundreds of degree courses on leadership, and the cost of customized leadership-development offerings from a top business school can reach $150,000 a person.

Moreover, when upward of 500 executives were asked to rank their top three human-capital priorities, leadership development was included as both a current and a future priority. Almost two-thirds of the respondents identified leadership development as their number-one concern. Only 7 percent of senior managers polled by a UK business school think that their companies develop global leaders effectively, and around 30 percent of US companies admit that they have failed to exploit their international business opportunities fully because they lack enough leaders with the right capabilities.

We’ve talked with hundreds of chief executives about the struggle, observing both successful initiatives and ones that run into the sand. In the process, we’ve identified four of the most common mistakes. Here we explain some tips to overcome them. Together, they suggest ways for companies to get more from their leadership-development efforts—and ultimately their leaders—as these organizations face challenges ranging from the next demanding phase of globalization to disruptive technological change and continued macroeconomic uncertainty.

[Here is the first of the four “mistakes” to avoid.]

1. Overlooking context

Context is a critical component of successful leadership. A brilliant leader in one situation does not necessarily perform well in another. Academic studies have shown this, and our experience bears it out. The CEO of a large European services business we know had an outstanding record when markets were growing quickly, but he failed to provide clear direction or to impose financial discipline on the group’s business units during the most recent economic downturn. Instead, he continued to encourage innovation and new thinking—hallmarks of the culture that had previously brought success—until he was finally replaced for underperformance.

Too many training initiatives we come across 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 CEO mandate.

In the earliest stages of planning a leadership initiative, companies should ask themselves a simple question: what, precisely, is this program for? If the answer is to support an acquisition-led growth strategy, for example, the company will probably need leaders brimming with ideas and capable of devising winning strategies for new or newly expanded business units. If the answer 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 (two to three) that will make a significant difference to performance. Instead, what we often find is 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 (such as the three Rs), and each on its own terms makes sense. In practice, however, what managers and employees often see is an “alphabet soup” of recommendations. We have found that when a company cuts through the noise to identify a small number of leadership capabilities essential for success in its business—such as high-quality decision making or stronger coaching skills—it achieves far better outcomes.

In the case of a European retail bank that was anxious to improve its sales performance, the skill that mattered most (but was in shortest supply) was the ability to persuade and motivate peers without the formal authority of direct line management. This art of influencing others outside formal reporting lines runs counter to the rigid structures of many organizations. In this company, it was critical for the sales managers to persuade the IT department to change systems and working approaches that were burdening the sales organization’s managers, whose time was desperately needed to introduce important sales-acceleration measures. When managers were able to focus on changing the systems and working approaches, the bank’s productivity rose by 15 percent.

Context is as important for groups and individuals as it is for organizations as a whole: the best programs explicitly tailor a “from–to” path for each participant. An Asian engineering and construction company, for example, was anticipating the need for a new cadre of skilled managers to run complex multiyear projects of $1 billion or more. To meet this challenge, it established a leadership factory to train 1,000 new leaders within three years.

The company identified three important leadership transitions. The first took experts at tendering (then reactive and focused on meeting budget targets) and sought to turn them into business builders who proactively hunted out customers and thought more strategically about markets. The second took project executors who spent the bulk of their time on site dealing with day-to-day problems and turned them into project directors who could manage relationships with governments, joint-venture partners, and important customers. The third targeted support-function managers who narrowly focused on operational details and costs, and set out to transform them into leaders with a broader range of skills to identify—and deliver—more significant contributions to the business.

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Here is a direct link to the complete article.

Pierre Gurdjian is a director in McKinsey’s Brussels office; Thomas Halbeisen is an associate principal in the Zurich office, where Kevin Lane is a principal. The authors wish to thank Nate Boaz, Claudio Feser, and Florian Pollner for their contributions to this article.