During times of inflation, and economic turbulence, it’s only natural to start looking at your budget to consider ‘wants vs needs’. Even make cuts to raise your bottom line, and wade out the waters of uncertain times.
You may think – what is the importance of leadership development to my profits? Does it add value to the company’s goals, strategies, and overall success?
Before you go striking the line item for employee or leadership development, you might want to keep reading. Over time, industry experts have discovered investing in leadership development pays off in the long run.
Here, we’ll cover the importance of leadership development in the workplace to answer the question – why invest in leadership development in 2022?
Importance of Leadership Development in the Workplace
In business, you’ve got to be competitive. That means the leaders of your company need to have the skills and support to have the ability to forecast the future, respond to changes, solve current problems, and coach those around them all simultaneously. Time has shown, these types of traits are common amongst companies that emerge as leaders in their respective fields.
Of course, there are stats to back this up too. According to research conducted by DDI, companies that implement effective programs for leadership development gain –
- Increased productivity by an average of 36%
- Increased operational efficiency by an average of 42%
- Improved work quality by an average of 48%
For more evidence on the importance of leadership development, next we’ll cover three of the top reasons to invest in effective strategies.
Why Invest in Leadership Development – The Top 3 Reasons
If you’re considering adding, or cutting, your leadership development programs – here are top three reasons that might seal the deal or change your mind.
#1 – Improve Bottom Lines
Put simply companies that invest in leadership development can improve the financial gains their companies produce. Leadership development provides the skills and capabilities for executives to decrease costs, develop diversified lines of revenue, and focus on improving customer satisfaction for retention and growth.
Think about it – who or what drives the ability to make a profit? Employees, and their respective productivity. When you take the time to develop your leaders’ skills and relationships with these employees – they’re only going to work harder, and better. The more your employees can support the overall goals of the company (sell more) the more you’ll see your profits grow.
Because employee engagement is directly correlated to their relationships with the leaders of a company – it’s an important relationship to nurture and expand upon.
#2 – Managing Talent
Not only have we seen rising costs recently, but all industries are also experiencing the effects of a shifting pool of talent and labor. In today’s world of the ‘great resignation’ and ‘quiet quitting’ it’s harder than ever to find motivated talent, and retain them, too. That’s why managing talent, when it comes to attraction and retainment, is our second reason you should invest in leadership development.
Employee turnover causes businesses to deal with operational gaps, increased labor for training, and costs, too. But, providing leadership development to your higher-ups can help navigate these challenges more seamlessly, and even more – great leaders tend to attract and inspire great employees.
Another DDI report to back this up is the research they conducted that showed companies with leadership development programs in place saw a decrease in turnover of 77% on average. Last but not least, leadership development helps your executives build a culture of trust which can boost employee morale, and productivity to increase profits.
#3 – Navigate Market Fluctuations
How can you grow, if you’re not learning and keeping up with the latest in the industry in which you operate? Leadership development is especially important during times of trouble and can improve executives’ ability to lead when it matters the most. By doing so, leaders can better inspire the workforce beneath them, to increase productivity, too.
When a company is in a position where they can navigate market fluctuations with ease, they have an immediate and immense advantage over competitors. Leadership development programs can help support a leader’s capability to do so, instead of remaining unchanged or ‘stuck’ in their old ways. When having to shift your business strategy to survive (like we’ve all experienced in the last two years), these are skills that’ll make or break your business in the end.
Importance of Leadership Development – The Bottom Line
Now that you can answer the question – why is leadership development important to organizations? You know the solution for protecting the future of your business. When looking ahead, and thinking of strategies to support overall growth – implementing effective leadership development programs should definitely be in the conversation.
If you want proven results, from a partner who’s been in your position before – look no further than Double Iron Consulting. Our founder, Bill Smith, watched his own family business reach the top through strategies designed for longevity, and legacy. Let him help you do the same. Get in touch to schedule a free discovery call with Bill, himself here, now.