The Leadership Development Advantage

by Linda Fisher Thornton

Developing Leaders Pays Off

Ongoing development for leaders helps companies. According to several recent reports, businesses that invest in leadership development enjoy clear advantages. These advantages include improved bench strength, improved talent retention and greater market value over time.

Here is a list of some of the financial and non-financial advantages of investing in leadership development, and the white papers that document them. As you read, consider how improving leadership improves the entire organization in ways that benefit companies, leaders, customers, employees, and communities.

Advantages of Investing in Leadership Development

Improved business growth
Improved bench strength
Improved employee retention
Improved bottom-line performance
Improved ability to attract talent
Solving problems earlier and at lower levels
Increased organizational agility
Improved business sustainability
Greater market value over time

Reports Documenting the Benefits of Leadership Development

Bersin & Associates found that businesses that invest in leadership development enjoy improved business growth, bench strength and employee retention. (New Bersin & Associates Research Shows that Organizations with High-Impact Leadership Development Strategies Build a Different Breed of Leader and Generate Seven Times Greater Business Impact, online at Bersin.com).

JP Dolan wrote in 40 Best Companies for Leadership Development: How Top Companies Excel in Leadership Development that companies that excel in leadership development generate dramatically greater market value over time (online at ChiefExecutive.net).

The Center for Creative Leadership report Driving Performance: Why Leadership Development Matters in Difficult Times (online at ccl.org) says that leadership development during difficult economic times helps companies emerge stronger than the competition, improves bottom-line financial performance, improves ability to attract and retain talent and increases organizational agility.

The Career Management Consultants in “Enhancing Leadership Capability” (nwacademy.nhs.uk) reported that The Institute for Corporate Productivity (i4cp) “found that high performing organisations are five times as effective at leadership development than low performing organisations and 86 per cent of respondents cited leadership development as a critical business issue” (The Best Get Better: Critical Human Capital Issues of 2012, i4cp, April 2012). The report also noted that “leadership capability has a direct impact on bottom line results and business sustainability.”

The Growthwave White Paper “Unleash Leadership Talent – Increase Business Performance (online at growthwave.com) reports that “Companies that focus on developing leadership abilities deep into the organization are able to identify and solve problems earlier and at lower levels. This allows higher-level leaders to not get distracted by the details at the expense of strategic performance. Unleashing leadership potential deep in the organization creates capacity to significantly increase business performance.”

Questions for Reflection

1. How well does our leadership development prepare leaders for successful leadership in our organization?

2. What problems are we experiencing that improving leadership competence would help resolve?

3. What are we going to do about it?