The future of business is here. As senior leaders are making a mass exit toward retirement, millennials are rising through the ranks to claim leadership positions. Organizations may have the best of intentions to properly develop new leaders, but leadership programs are falling flat across the board.

Despite the billions of dollars that companies spend each year on leadership development, 28 percent of companies reported weak or very weak leadership pipelines, according to a 2016 Global Human Capital Trends Report. In fact, only 7 percent of companies believe they are “excellent” at building millennial leaders.

With only 14 percent of companies describing themselves as “strong” in succession planning throughout the business, it is clear that organizations are struggling to identify potential leaders and develop them. Even more alarming, 59 percent of survey respondents report little to no investment in diverse leaders, with similar findings for millennials (59 percent) and women (49 percent).

Identifying the Problem

Leadership development may be one of the most important investments that a company makes in terms of its future. Without properly preparing leaders across the business, organizations are unknowingly preparing to fail. Organizations need to provide leaders with the tools and skills they need to navigate today’s complex and diverse business environment. And that includes training employees at all stages of their careers.

As organizations shift from a structured hierarchy to a more collaborative and team-centric dynamic, there is a growing demand for leaders at all levels. To remain competitive, companies must identify potential leaders much earlier in their careers and create a robust pipeline of new, more innovative leaders.

Companies must harness the strengths and skills of both younger and older leaders, creating a stronger culture that promotes differences and encourages collaboration. Today’s leaders need to be able to collaborate across geographies, generations and business units. Leveraging the strengths of leaders at all levels is not just a nice-to-have; it’s becoming a necessity to thrive in today’s business environment.

The challenge facing many organizations is how to build a leadership pipeline in the face of high employee turnover. With the millennial generation notorious for jumping ship every few years, how can organizations build a pipeline for leaders to grow with the company?

Finding a Solution

Developing a leadership succession plan is critical to the longevity of an organization. With so much at stake, companies must effectively identify and develop untapped leaders. But many organizations are lacking an environment that allows those leaders to emerge.

By creating a more inclusive culture that acknowledges and develops leaders at all levels, organizations can help combat employee turnover. Learning and development needs to join the talent assessment discussion, and look for ways to support the shift in strategy. That will take collaboration with HR and talent management functions, but, more importantly, with the existing management structure within the company.

Leadership should no longer be viewed as top-down management. Building teams with multigenerational leadership can promote more diverse perspectives while leveraging the insight of both younger and older employees. This multigenerational think tank dynamic can maximize knowledge and give leadership experience to less seasoned employees.

The times are indeed changing, and organizations need to adapt or risk being left behind. Companies need better strategies to develop leaders who are prepared to drive the business into a prosperous future. Identifying and building leaders earlier in their careers lies at the heart of this challenge. By creating a leadership strategy that targets millennials, organizations are taking the first step toward fixing the leaky leadership pipeline.