“Bad leaders pose the biggest risk to companies” – Warren Buffet, WSJ
Amidst bank failures, start-ups collapsing, and the market teetering on the edge of uncertainty, one would think the emphasis on leadership would be greater than ever before. Unfortunately, research shows this is seldom true:
- 60% of managers fail within their first 24 months on the job.
- Only 48% of employees view their company leadership as “high-quality.”
- While organizations understand the importance of leadership development (83% to be exact), only 5% have actually made the investment.
Human capital is the largest investment – and biggest expense – an organization has. The success of the organization is intrinsically tied to the skill and capability of its employees.
With so much resting upon the success of a company’s workforce, investing in leadership development is an imperative, not an option. Any reason not to invest in leadership – lack of resources, lack of funding, lack of time – can be refuted with these five compelling reasons.
1. Powerful ROI for the business. Leadership development programs strengthen an organization’s capacity to address talent gaps and reduces expensive challenges associated with high employee turnover. Investment in leadership development increases buy-in among employees, which increases retention rates. Additionally, this investment helps build high-performance across teams which results in increased efficiencies and successful profit goals.
2. Increase employee engagement, satisfaction, and productivity. Providing leadership development programs is one way for the organization to demonstrate that leadership is ‘bought-in’ to the potential of their workforce. Employees are more likely to produce quality content if they feel valued by the organization.
3. Attract higher-quality candidates. While competitive pay and benefits greatly influences attracting high-quality talent, another top factor is investment into personal growth. Top performing individuals want to work for companies that invest in their future potential. A leadership development program is a great way for companies to help employees achieve their personal and professional goals.
4. Improve company culture. Company culture plays a crucial role in aligning employees with the organization’s mission, vision, and goals, and fosters a strong sense of community. Without community and a shared purpose, an organization can succumb to various threats, including company politics, poor management, and employee burnout. Investing in leadership initiatives helps organizations foster a positive culture where people are aligned, and purpose driven.
5. Build capacity to navigate change and complexity. There is only one constant in life, and that is change. At some point, the inevitable is going to happen: your best-selling product becomes obsolete, the stock-market crashes, your CEO retires. While we can’t control what will change, we can control how we react to it. Organizations whose people are agile and adaptive thrive when others fail. Investing in leadership programs that teach people how to deal with change should be an essential part of any organization’s budget.
Organizations regularly invest in new equipment, new technology, and new supplies. Why would organizations not invest into their most valuable asset, their employees? The advantages of investing in leadership are undeniable. When the challenges we face are multifarious, the path forward ambiguous, and pace of change is becoming increasingly rapid, technical solutions are no longer sufficient. We must rely on the practice of leadership to stimulate learning in others, adapt new behaviors, innovate, and navigate complexity effectively. The best way to successfully traverse the shifting landscape is to equip our people with the appropriate development opportunities.