Leadership Development: Why It’s Worth the Investment
Did you know that businesses with a leadership development program perform better than those with no program? Just one of the many surprises coming from The Global Leadership Forecast’s eighth edition report, which integrated data from 28,000 leaders and 2,488 HR professionals around the globe. This report also found companies that invest in leadership development for employees below their senior management staff do phenomenally well. In fact, they are 4.2 times more likely to outperform those companies who have no program in early leadership training. From that same report, 64 percent of respondents also indicated that their biggest challenge was developing the ‘next-gen’ leaders.
With so much at stake and clear, proven evidence that training in leadership brings many benefits, we look at four major reasons businesses should fund leadership development programs:
Improves your company’s finances
Overall, organizations that had gender diversity and inclusive cultures, in addition to leadership development training, built better leaders. Perhaps, it’s based on the theory that enabling everyone to thrive was a priority. With that in mind, it wasn’t unusual that the report showed women in leadership roles were linked to improved financial performance. Companies that filled 20 percent of their senior leadership roles with women were 1.4 times more likely to experience consistent financial growth.
Attracts and retains top talent
Indeed crunched data from 15 million employee reviews of organizations to reveal which companies had the best management approaches. The results found financial and real estate organizations rule the top 10 and tech companies noticeably missing. But leadership, whether it’s management or executive-level leadership, your business needs all begin with development and training. Those employees groomed through leadership development are not just improving profits and driving your business strategy; they’re influencers in your workplace. They’re the ones that Millennials and Gen Z talent want to engage with, and it’s their leadership style that attracts them. Beyond management, having a leadership development program trains people to motivate and inspire their teams. It can make the difference between success and failure when navigating future challenges.
Allows for Effective Execution of Business Strategies
Leadership development has enormous influence in affecting business strategy. While businesses need leadership that closely aligns with their business strategy, it also needs to equip those leaders with the skills to make it a success. It’s an opportunity for businesses to create leader talent and combine it with a culture and strategy that has enormous potential. The earlier a leadership development program grooms potential employees for their future roles, the greater the impact. The Global Leadership Forecast report found that those with previous experiences in leadership roles in and outside of their career had greater potential as did those employees who were innately motivated to lead.
Increases Response to Disruptions and Business Challenges Successfully
Leadership roles require a certain amount of flexibility. But those potential employees who can pivot in the face of adversity, changing work environments, and evolving challenges were found to have highly coveted leadership qualities. However, those qualities are only as effective as the leadership development training behind them. Businesses place their trust in their leaders, and the impact of training, development, and mentoring should never be underestimated.
Allows for the Transfer of Knowledge
The Global Leadership Forecast report found that mentorships, as part of a leadership development program, can help businesses capture vital knowledge that would otherwise be lost. If you don’t have a mentorship training program, that knowledge disappears when an employee retires or leaves the organization. Overall, 46 percent of respondents found higher-quality leaders through mentorship training programs. Another 23 percent were able to fill leadership roles immediately, and 20 percent said it lowered their turnover rates.
If you have plans to revisit those leadership development benefits or invest in custom leadership training, now may be the perfect time. In evaluating a leadership program, it’s not just about the cost. Consider your leadership pipeline. Grooming your business leaders for the future can start right now. If you’re contemplating a different business strategy, you’ll need the right people in place to execute plans, inspire employees, and drive profits. Mostly, you need leaders who are flexible and can power through any adversity you and your business may face. And that type of success can only come from quality leadership development.