5 Reasons to invest in a leadership development program

leadership development program

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leadership development program


We’ve all head it before: talent can make or break a company. Retain it. Engage it. Develop it.

Organizations that invest in leadership development perform better than those that do not, study after study shows. However, research also shows that although developing leaders is a top priority for companies, only a minority report investing in leadership development programs. Why?

Clearly, there’s a disconnect between what companies say and what they do. And it gets worse.

According to a survey conducted by business management consulting firm Gap International, 85 percent of company executives surveyed said that maximizing talent is “very important,” and 83 percent said the same of empowering employees to succeed. At the same time, only 37 percent of the executives believe their employees can become top performers, and less than half said they would invest in leadership development this year. Um, what?

All that potential … going to waste.

Some companies opt not to invest in leadership development because they claim it’s too difficult to measure results or return on investment. Others believe leadership development programs don’t work, so why invest time and money on them? What they fail to understand is that, like everything else in life, not every program is created equally.



Many leadership programs don’t accomplish what they set out to do: build better leaders. But there’s a reason for that.

Each year, U.S. businesses spend more $170 billion on leadership programs, with the majority of that being spent on “leadership training.” And therein lies the problem. Leaders are not trained; they are developed.

Training is the top reason why leadership development sometimes fails. Training indoctrinates on the “right way” to do things. It standardizes. It serves the status quo. Development differentiates and encourages forward thinking.

“Training focuses on best practices, while development focuses on next practices,” says Fortune 500 leadership adviser, author and Forbes contributor Mike Myatt.

“Training is often one directional, one dimensional, one size fits all, authoritarian process that imposes static, outdated information on people,” Myatt explains. “The majority of training takes place within a monologue (lecture/presentation) rather than a dialog. Perhaps worst of all, training usually occurs within a vacuum driven by past experience, not by future needs.”

There you have it, in a nutshell.



The right way to produce leaders in your organization is not to train them but to develop them through coaching and mentoring.

While training focuses on how things are done right now, development focuses on how things ought to be done in the future. When training focuses on compliance, development focuses on performance.

The difference between training and development is like the difference between maintenance and growth, standards and potential, indoctrination and education, efficiency and effectiveness, jobs and people, problems and solutions. Training keeps you in a box. Development takes you outside the box.

Following are some of the characteristics of an effective leadership development program:

  • Job rotation: gives employees first-hand experience in a variety of roles throughout the company.
  • Stretch assignments: encourages employees to develop skills outside their comfort zones, boosting their confidence, enhancing their skills and increasing loyalty to the company.
  • Mentoring: assigns accomplished employees to assist in developing the skills of younger, less-experienced workers.
  • Veterans’ advice: invites veteran or retired employees to share their knowledge and experience with younger workers and new hires.



Can you afford the costs of poor leadership? —disengaged talent, high employee turnover, low productivity, bad decisions, unhappy customers? No you can’t. It’s more cost effective to develop your existing employees into leaders than to hire leaders from outside hoping they will be the right fit for your company.

Leadership development programs are crucial to the long-term success of every organization. Whether you believe leaders are born or made, in order to build a high-performing team, optimize your people’s expertise and prepare the next generation of well-rounded leaders, you have to invest in leadership development–not in a colorful Power Point training session.



Here are just a few of many reasons to invest in leadership development.

  1. Improve your bottom-line.

Developing leaders in your organization reduces costs, drives new lines of revenue and improves customer satisfaction.

Companies that invest in leadership development deliver stock market returns five times higher than the returns of companies that place less emphasis on human capital, according to studies by Harvard Business Review and McBassi & Co.


  1. Attract and retain talent.

Leadership development increases employee engagement and reduces costs associated with turnover.

When you give employees a role in your company’s future, they respond with loyalty. Developing your own people also is less expensive than bringing on new recruits, as it doesn’t require you to spend money on advertising, headhunter fees, HR costs, travel and moving expenses, signing bonuses, etc. In terms of turnover, the most common reason for employee exodus is a bad manager, that is, poor leadership.

“Great leaders attract, hire, and inspire great people. A mediocre manager will never attract or retain high-performing employees.” –from “High-Impact Leadership Development” by Bersin & Associates.


  1. Return on Investment

Leadership development is a sound investment.

According to a Global Coaching Client Study by ICF, 86% of the companies able to provide figures to calculate ROI indicated they had at least made their investment back: 19% showed an ROI of at least 50 times (5000%) the initial investment, while a further 28% saw an ROI of 10 to 49 times the investment. “The median company return was 700%, indicating that typically a company can expect a return of seven times the initial investment,” ICF reported.


  1. Improve corporate culture

You invest in them, and they invest in you.

Investing in leadership development sends a message to your people that you care about them and inspires them to meet and exceed performance expectations. Programs that include mentoring and coaching can boost employee morale and transform your company from a workplace to a great place to work. Leadership development programs also reinforce a company’s vision, mission and values by setting an example.


  1. Increase organizational agility

Leadership development helps companies navigate challenging times by increasing people’s ability to respond rapidly in unpredictable business environments.

Effective leadership comes in handy not only during day-to-day business operations but particularly during critical times such as drastic change, accidents, workforce reductions, corporate restructuring, political upheaval and personal tragedy.



Good leadership is great. Great leadership is inspiring!

“The greatest leader is not necessarily the one who does the greatest things. He is the one who gets people to do the greatest things.” -Ronald Reagan

“No man will make a great leader who wants to do it all himself or get all the credit for doing it.” -Andrew Carnegie

Learn about engaging employees and keeping them motivated and productive, we’ve created a valuable guide designed to help you attract, engage and retain top talent: “HOW TO ENGAGE EMPLOYEES AND KEEP THEM HAPPY.”

Employee Motivation

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