How exactly does leadership impact your organization? What benefits can be gained from developing leaders and turning up the leadership temperature? Numerous in-depth studies have reached the same conclusion: Organizations that invest in leadership development perform better than those that don’t. Let’s look at why.
Things can be a bit challenging these days in or business landscape. As I write this post, both Countrywide Bank and Wells Fargo Bank have lost lawsuits over unethical mortgage charges. This comes as the housing market still struggles to recover. Once iconic companies Blockbuster and Borders are failing quickly, and our nation is at risk of defaulting on our debt. Luckily for us, investments made in leaders during challenging and difficult times can yield the greatest returns. Steven Meredith, global knowledge director at the consulting firm Talent Intelligence, said, “Our research and insights, from advising Global Fortune 500-level companies, indicates it is more important than ever for organizations to invest in their leadership during recessionary periods so that the business not only survives but emerges stronger”.
Bersin and Associates found that, when facing dynamic changes in the business environment, 86% of companies with strategic leadership development programs are able to respond rapidly, compared with just 52% of companies who have less mature leadership development. Strategic leadership development greatly increases your ability to respond in these economic times when change is happening at a very quick rate. According to Thrive research, turnover in the Fortune 500 is rapidly accelerating, with nearly 50% of all the Fortune 500 turnover happening in the past decade. Yet it’s not just challenging times that can benefit from great leadership throughout the company.
Studies show investments in leadership development can improve bottom-line financial performance, help attract and retain great talent, drive a high performing culture, increase organizational agility, and increase innovation and creativity. Bersin also found that companies with strategic approaches to leadership development are:
– 84% more effective at increasing the quality of their leadership pipeline
– 73% more effective at improving overall employee retention
– 67% more effective at increasing the engagement, retention and teamwork of leaders
Imagine for a moment what your company would look like if it was 73% more effective at employee retention. Considering employee voluntary turnover costs can easily reach 150% of annual salary, this increased effectiveness can save major dollars and time. What would your organization look like if it was 67% more effective at incasing employee engagement? I would suspect it would look significantly better than it does today.
If you want to build a company that is here to stay, that has the ability to adjust and advance in this crazy business landscape, you need to invest in your leaders. The data shows that leadership development is an incredibly powerful tool in helping attract and develop great talent, pursue new ideas, and master change or transition. Leadership development matters.