What is leadership development?
Leadership development typically involves a company promoting and advancing its senior leaders through a structured program. These programs allow people to improve their leadership skills and are useful to leaders and managers at all levels. They are also essential for promoting the leaders of the future.
Programs often include a mix of traditional training sessions and initiatives such as mentoring and coaching. A large part of the training focuses on personal development, but there are also elements of organizational development and learning skills such as critical thinking and collective leadership.
Organizations recognize the importance of leadership development and most invest in it at some point. Before the pandemic, 94% of companies said they planned to maintain or increase their leadership development budget. And the need for a strong command presence after the pandemic is likely to make leadership development even more of a priority.
But despite continued investment, some of the programs on offer are not delivering the expected results. Harvard Business Review found that more than 50% of senior leaders believe their talent development efforts are not adequately building essential skills and organizational competencies.
So how can organizations ensure ROI on their leadership team development efforts? Specialists believe that it is a combination of these factors:
- Highly contextualized and personalized training
- Time to consolidate learning
- Robust impact measurement
Why is leadership development so important?
Successful leadership development programs can benefit individuals, teams, and companies. They can also relate directly to financial performance. But the impact leadership team development can have on morale, commitment, and purpose is even more important.
Search for talent within the organization
The most successful companies have a leadership pipeline or leadership bench. In other words, they know how to source talent from within the organization instead of always hiring from outside (with all the expense and hassle that goes with it). To help keep the people pipeline healthy, training leaders to identify and nurture internal talent is a significant leadership development goal.
Minimize abandonment
The abandonment levels are not good at all. Up to 70% of senior leaders placed in new positions fail. This is costly, not only financially, but also because of the strain it can take on staff morale and brand reputation.
Leadership development can reduce this dropout, especially if the program includes a mentoring initiative. DDI found that turnover in leadership positions is 20% lower when the workplace has a mentoring culture. And, of course, having a great leader helps organizations retain talent at all levels.
Improve financial performance
Leaders who are in tune with people, the company as a whole, and their industry are more likely to deliver financial results. Therefore, successful operations leadership development programs can drive financial performance. But it’s not just about developing the people on the senior leadership team.
DDI research found that when companies extend their leadership development programs lower down the hierarchy, they are four times more likely to see better financial results.
Help lead organizations in times of change
The ability to navigate in times of crisis is the focus after the pandemic. Leadership development programs that focus on collective leadership can help hone this skill.
When you can train leaders in collective leadership, they can work and solve problems collaboratively. That leads to better decision making and a better ability to anticipate and respond to change proactively, not reactively.
Improve leadership diversity
Senior women are more likely to consider leaving for another chance than senior men — a number that has increased during the pandemic, particularly among mothers. Therefore, [SC2] developing and promoting women leaders, and keeping them engaged, should be a business activities priority.
Another area where leadership development can contribute to diversity, equity, and inclusion is in helping managers learn to look beyond “the norm” when hiring outside staff and promoting internal staff. Great leaders tend to avoid the common pitfall of recruiting only in their own image.
Improve accountability
Leaders should think about career goals the same way they think about any other business goal. That means creating a clear and robust development plan, holding yourself accountable for it, and being accountable for your own leadership development goals. This strategy can also increase loyalty and reduce churn.
Improve employee engagement
Employee engagement and leadership are significantly linked. Basically, if you have the right managers, your employees will feel inspired and engaged. Conducting regular perception surveys can help identify declines in engagement and give leaders the opportunity to respond quickly and effectively.
