Leading The Future – And Why You Should Invest In A Leadership Development Program

One of the things that most baffled me when I got my MBA was that there weren’t multiple classes teaching you how to be an effective leader. It’s all about business, and great leadership is essential for every organization to succeed, so it didn’t make sense.

You’re expected to go work with an organization and, eventually, to move into a leadership position, yet when you graduate, you haven’t always been taught how to lead others.

There are many reasons that companies and individual leaders seek out leadership development.

Some of the most common issues we see are:

Lack Of Formal Training

Sometimes, leaders have no formal training. Many are promoted from individual contributor roles because they excelled in that role. That excellence may have no bearing on whether they’re interested in or well-suited to a management position.

And, it’s hard to be an effective leader if you haven’t received any training, may not have seen it in action, and haven’t had the opportunity to deliberately practice.

Making Rookie Mistakes

Lack of Delegation - Often, new leaders’ inclination in the first or second level of management is to do more supervising or jump in and do it themselves rather than empower their team.

Micromanaging - Similarly, they might micromanage employees rather than trusting them to do the work, which slows productivity and discourages innovation because employees don’t feel safe to share their ideas or take calculated risks.

No Expanded Interpersonal Skills - There’s a need for leaders to possess emotional intelligence and understand team dynamics, communication styles, and how to create buy-in, and these skills often need to be developed.

Struggling To Perform At The Next Level

Strategy - Often, leaders find it challenging to step back into a more strategic role and get caught up in the minutiae.

Vision - They’re unable to paint a clear vision for the team and use it to inspire them.

Team Dynamics - They’re not actively managing conflict and taking a passive approach.

Develop Top Talent - Leaders are sometimes unsure how to attract, develop, and retain top talent. Others don’t see this as an important priority.

Benefits Of A Leadership Development Program

As individuals move up into leadership positions, they’re expected to have more of a vision, work together collaboratively and cohesively, and be able to attract, retain, and organize teams to support the business.

Leadership development can address all these gaps, and the benefits to the individual and the organization are well-proven. (If you're interested, you can check out our Leadership Development Program here.)

Leadership development supports:

Succession Planning

An effective leadership development program can create a deep and diverse leadership pipeline crucial for succession planning, minimizing leadership gaps, and supporting the organization's long-term success. It also lowers the cost of hiring by allowing you to promote internally.

84% of organizations anticipate a shortage of leaders in the next five years. Leadership development is crucial for addressing these gaps. (Brandon Hall Group)

Engagement And Productivity

Companies across various industries agree that effective leaders mean that employees are more engaged and productive.

• Companies with leadership development programs report 2.3x higher employee engagement levels. (Gallup)

• Organizations with effective leadership development programs are 1.4x more likely to have highly productive employees. (LinkedIn)

It also seems to be a protective factor against employee burnout, which is up 60% since 2020 (DDI). Actually, 1 in 5 employees is at risk for burnout due to poor engagement between staff and leaders. (DDI)

Retention

It makes sense that companies with effective leadership development programs also experience higher employee retention. It signals that your organization is committed to employee growth and career advancement, which can foster feelings of loyalty and lower turnover rates.

• 69% of Millennials are concerned that their workplace doesn’t develop their leadership skills. (DDI)

• Companies that invest in leadership development are 4.2x more likely to retain top talent. (LinkedIn)

• 77% of employees say that they would be willing to stay with their current employer if they had a clear path for career development. Leadership development programs can provide such paths. (Udemy)

As we also know, direct managers greatly influence whether employees stay or start looking for greener pastures. DDI reports that 70% of US employees are dissatisfied with their jobs because of negative management, and 57% of employees have left because of their manager.

Culture

There are so many positive benefits to company culture that result from investing in leadership development, from increased innovation and creativity (because effective leaders empower others to share their ideas and take calculated risks) to increased diversity (which supports business growth) to leaders who role model company values and create a culture where everyone can thrive. 

• 42% of organizations believe that leadership development programs are critical for fostering innovation and adaptability. (Deloitte)

• Organizations with diverse leadership teams are 1.4x more likely to have sustained, profitable growth. Leadership development can help promote diversity in leadership. (Boston Consulting Group)

Adaptability

Companies that invest in leadership development programs create leaders who are better equipped to lead their teams through change and transitions, think strategically, and make balanced decisions.

• Leadership training improved leaders' performance by 20%. (DDI)

• Only 12% of leaders reported themselves as effective in all of the following areas: identifying and developing future talent, strategic thinking, managing change successfully, decision-making/ prioritization, and influencing others. (DDI)

Financial Performance

Because leadership development affects so many areas of an organization and can be felt at all levels - it’s not surprising that its impact would trickle down to the bottom line.

• Effective leadership development programs can lead to a 1.4 - 2.2x increase in financial performance. (CEB)

• Companies with the highest quality leaders are 13x more likely to outperform their competitors. (DDI)

The benefits of leadership development are felt across the organization. If we also consider that it costs up to 150% of a leader’s salary to replace them, then why don’t more companies invest in cohort-based leadership development programs?

We don’t know...

77% of organizations report that leadership is lacking. 83% of businesses say it’s important to develop leaders at all levels. But less than 5% of companies have implemented leadership development programs across all levels. (DDI)

So, what’s holding you back?

While we believe that a cohort-based leadership development program is the best option, we want you to be able to take action and move the needle on developing your leaders.

So, here are a few cost-effective ideas to get you started.

1. Introduce a TedTalk series and have different leaders facilitate discussions on observations, learning, and commitments to application.
2. Start a leadership book club with reflection questions. This approach ensures that introverts and those who need a bit more time to process can equally benefit from the material.
3. Mentorship programs so leaders have someone to discuss issues and challenges with.
4. 360 Assessments to get clear feedback that you can use to highlight areas for improvement and create a plan to make changes.
5. Online classes like LinkedIn Learning or Udemy are great options. They offer content that can be chosen based on desired learning paths and outcomes.

We hope we’ve made the case here that investing in the development of your leaders is not only beneficial, but actually crucial. And that you’ll take action on at least one of the steps above to increase your organizational effectiveness.