The need for leadership development has never been more urgent. Companies of all sorts realize that to survive in today’s volatile, uncertain, complex, and ambiguous environment, they need different leadership skills and organizational capabilities from those that helped them succeed in the past at all levels of the firm. But the leadership development industry is in a state of upheaval. The number of players offering courses to impart the hard and soft skills required of corporate managers has expanded well beyond the traditional business schools, corporate universities, and dedicated consultancies. And yet organizations that spend billions of dollars annually to train current and future executives are growing frustrated with the results. There are three main reasons for the disjointed state of leadership development. The first is a gap in motivations. In executive development, the “customer” is not the “client.” The organization pays for the individual to enhance his or her skills—and résumé—and thereby benefit from participating. The second is the gap between the skills that executive development programs build and the skills that organizations require—particularly the interpersonal skills essential to thriving in today’s flat, networked, increasingly collaborative organizations. The third reason is the skills transfer gap. Simply put, most executives do not seem to take what they learn in the classroom and apply it to their jobs. For organizations to develop essential leadership and managerial talent, they will need to bridge these three gaps. The good news is that the growing assortment of online courses, social and interactive platforms, and learning tools from both traditional institutions and upstarts—which we call the personal learning cloud (PLC)—offers a solution. Organizations can select components from the PLC and tailor them to the needs and behaviors of individuals and teams. The PLC is flexible and immediately accessible, and it enables employees to pick up skills in the context in which they must be used. In effect, it’s a 21st-century form of on-the-job learning.

This paper introduces algorithmic micro-foundations for formulating and solving strategic problems. It shows how the languages and disciplines of theoretical computer science, “artificial intelligence,” and computational complexity theory can be used to devise a set of heuristics, blueprints, and procedures that can help strategic managers formulate problems, evaluate their difficulty, define “good enough solutions,” and optimize the ways in which they will solve them in advance of attempting to solve them. The paper introduces both a framework for the analysis of strategic problems in computational terms and a set of prescriptions for strategic problem formulation and problem solving relative to which deviations and counterproductive moves can be specified and measured.

Even as the demand for managerial skills continues to grow, executive education worldwide has entered a period of disruption caused by the digitalization of content, connectivity, and communication. The current offerings of many executive education program providers fall short of creating new skills in executives and developing fresh capabilities for organizations. Based on a study of all the programs offered by the business schools, consultancies, corporate universities, and online education providers, we analyze the advantages, and the constraints, of the existing programs. We also map the vehicles for skill development—such as case discussions, lectures, simulations, coaching sessions, live projects, etc.—in terms of their potential to develop executives for the future. We then examine the impact of the forces of digital disruption—the disaggregation and disintermediation of activity chains and the decoupling of the sources of value in education programs—on the future of executive education.

Executive development programs have entered a period of rapid transformation, driven on one side by the proliferation of a new technological, cultural, and economic landscape commonly referred to as “digital disruption” and on the other by a widening gap between the skills and capabilities participants and their organizations demand and those provided by the executive program itself. We document—on the basis of transcripts of some 100 interviews with Fortune 500 executives—a current and growing awareness of a mismatch between executive development offerings and the skill sets executives need in a volatile, uncertain, ambiguous, and complex (VUCA), Web 2.5-enabled economy. We show that a trio of forces of digital disruption—specifically the disintermediation of the services of instructors and facilitators, the disaggregation of the previously bundled experiences that constitute an executive program, and the decoupling of the sources of value participants derive from any one experience—together open up the executive education industry to a radical restructuration. We argue that any consequential strategic action on the part of providers must address two major current gaps: the gap between the skills required by participants and those provided by suppliers (“the skills gap”) and the gap that separates skill acquisition from skill application (“the skills transfer gap”). We canvass the literature on skill measurement, acquisition, and transfer to establish the enduring power of these distinctions in explaining the success of various training and education programs. We use these distinctions to structure the landscape of strategic decisions that both organizations committed to organizational development and providers of executive development programs must in very short order make.

Executive development programs have entered a period of disruption catalyzed by the digitalization of content, connectivity, and communication and are driven by renewed demand for high-level executive and managerial skills. Unlike other segments of higher education, the executive education market is heavily subsidized by the organizations employing the executives that participate in them. To understand the ongoing transformation of the industry, we use a large database of interviews with participants in executive development programs at HBS—and executives in their sponsoring organizations—to map out the (multidimensional) objective functions of executive participants and their organizations and show how the trio of disruptive forces (disintermediation, disaggregation, and decoupling) that have figured prominently in other industries disrupted by digitalization (media, travel, publishing) are likely to reshape the structure of demand for executive development.

I introduce algorithmic and meta-algorithmic models for the study of strategic problem solving, aimed at illuminating the processes and procedures by which strategic managers and firms deal with complex problems. These models allow us to explore the relationship between the complexity of an environment, the sophistication of the problem-solving processes and procedures used to optimally map problem statements into strategic actions, and the organizational structures that are best suited to implementing solutions. This approach allows us to distinguish among levels of sophistication in the strategic management of complex predicaments, specifically among rational, irrational, quasi-rational and super-rational problem-solving processes and responses of strategic managers and organizations. It highlights a set of dynamic search and adaptation capabilities that can be studied via the algorithmic and computational properties of the problems they are meant to solve and the efficiency and reliability by which they search a solution space. It points to several new components of competitive advantage that are linked to the complexity adaptation of a firm: “offline problem solving” and “simulation advantage” emerge as key strategic differentiators for firms facing complex problems.