5 Benefits of Leadership Development
Effective leadership is a critical driver of success in every organisation. Leaders naturally develop through the challenges, successes, and failures they experience. But that development is unplanned, even random, and may or may not include the most relevant areas of growth for the leader and their organisation.
Leadership development is the planned enhancement and acceleration of leadership growth. Even seemingly small insights, modest skill refinements, or minor behaviour changes can have an exponential effect on a leader’s effectiveness, changing the trajectory of their leadership, the people they lead, and their organisation.
HBR reports that over US$60 billion is spent each year globally on leadership development so leadership development is already big busines. More importantly, Future Market Insights forecast the investment in leadership development to grow at over 10% a year over the next decade.
More and more organisations around the world are seeing leadership development not as nice-to-have training but as a core strategy. What benefits stem from investing in leadership development?
Balanced Leader Development
One of the most significant benefits of leadership development is the balance it brings to the leadership capabilities of participants.
A high-quality leadership course incorporates a wide range of insights, mindsets, skills, and behaviours from different aspects of leadership such as leading yourself, leading others, leading teams, and strategic leadership.
It prompts and guides participants to see their leadership holistically, to identify how they can best grow in ways that complement and extend their natural leadership capabilities and style. They become more balanced, all-round leaders capable of being effective in a broader range of situations.
Enhanced Strategy Development & Implementation
Strategy is vital. How well strategy is formulated, implemented, assessed, and refined is the backbone of organisational success. The key driver of great strategy is great leadership.
Leadership development drives great strategy in two ways. It produces leaders who build and nurture the above strategy cycle more effectively. They better tap the resources of the organisation to create and implement strategy, building people’s understanding of, and commitment to, the best way forwards.
As well, quality leadership development, particularly when done in-house with a senior leadership team, shapes a leadership culture and facilitates the definition of a leadership strategy that closely connects with the organisational strategy.
More Influential Talent Attraction & Retention
More effective leadership is a powerful tool in the competition to attract and retain talent.
The Bersin by Deloitte report High-Impact Leadership Development reports that organisations with stronger “leadership maturity” are 11 times more likely to have a high number of leaders who can build talent for competitive advantage. And they’re 7 times more likely to have a high number of leaders who inspire people to follow them.
Effective leaders are better at building staff engagement, fostering a culture of learning, encouraging and enabling internal mobility, building resilience and adaptability, and enhancing employee satisfaction. The net effect is a stronger employment brand, which both attracts and retains talent.
Learn more about how leadership development attracts and retains talent.
Improved Financial Performance
It takes no imagination to understand that better leadership will almost certainly mean better financial performance. But it is useful to dive a little deeper.
Trainingindustry.com (2019) showed an ROI of 29% in the first three months after leadership training and an annualised ROI of 415% … over $4 return for every $1 spent on training.
Deloitte (2012) examined the impact that leadership can have on share price. Senior leadership effectiveness was a significant contributor to financial results and earnings forecasts when judging the future success of the company. More than half (52%) of financial analysts said that they consider the strength of senior leadership in company valuations.
High-quality leadership development is an investment with financial returns as well as people and culture benefits.
More People-Oriented Change Leadership
We work and live in an ever more disrupted world. Even putting black-swan events aside, the pace and complexity of normal business is more challenging than ever and requires more reactive and proactive change than ever.
Change management is a large and growing industry that reaches into virtually all organisations. It takes a project management approach to change, organising the myriad aspects of change.
Leadership development increases people’s ability to lead other people in a disrupted world. It frames change management in people leadership, allowing change management as the effective tool it can be.
A Strategic Approach
Leadership development has become more than training. It is a legitimate business strategy, planned and invested in like other important strategies. Organisations that want to be more effective, efficient, or competitive now consider leadership development to be not only a people-focused tool but an strategic investment with effects far beyond the participants.
30-Second Survey
In this anonymous survey, select the 3 leadership development benefits you would most like to see more present in your organisation: