Why is leadership development so important? Because it represents a great opportunity for organizations to take advantage of a competitive advantage in their industries.

If your company is committed to developing its leaders, you can expect to gain a significant competitive advantage by improving bottom line results; attract, develop and retain talent; promote the execution of the strategy; and increase your success in navigating change.

Our data backs this up. When we surveyed more than 5,000 program participants worldwide, as well as 8,765 of their colleagues, 99% of the respondents said they achieved success in their goals related to communication, self-awareness, implementation of change, and other areas.

Improve the fund's financial performance

Companies that are highly rated for their investments in human capital obtain stock market returns 5 times higher than those of companies with less emphasis on human capital. Leadership development creates the ability to reduce costs, generate new revenue streams, and improve customer satisfaction.

Attract, develop and retain talent

Leadership development drives employee engagement, increases the organization's ability to deal with gaps in talent flow, and reduces the headaches and costs associated with turnover. Great leaders attract, hire, and inspire great people. A manager without strong leadership skills will have a difficult time attracting and retaining high-performing employees.

Additionally, it is often significantly less expensive to develop, train, and promote people internally over the long term than to hire someone externally, making leadership development a good investment.

Drive the execution of the strategy

Effective leadership development is not development itself. Organizations need a leadership strategy that connects closely with business success strategy and provides employees with the leadership skills necessary to implement it. Leadership development enables organizations to shape business culture and strategy.

In the words of The Conference Board: “Leadership development has enormous power both to shape and change business culture and strategy. Developing, mentoring, and promoting people internally is significantly less expensive than the costs normally required to hire someone externally. "

Increase success by navigating change

Leadership development increases people's ability to lead in a disruptive world. When organizations look beyond the development of top executives and high potentials to unlock the full potential of their talent pools, agility is magnified.

The Power of Leadership Development to Attract and Retain Talent

According to the Bersin by Deloitte High Impact Leadership Development Report, organizations with stronger "leadership maturity" are 11 times more likely to have large numbers of leaders who can develop talent for competitive advantage. And they are 7 times more likely to have a large number of leaders who can inspire people to follow them.

Seeing talented people walk out the door creates huge expenses for organizations, from morale, advertising, recruiting and relocation costs to time spent training new hires.

Unfortunately, the report found that capable leadership talent is very rare. Only 60% of organization leaders display business acumen and judgment; 48% are considered to drive change and innovation; and only 44% create talent to gain a competitive advantage.

Sophisticated leadership development programs develop a deeper and richer talent stream, which is why organizations today seek to unlock the full potential of their talent pools at all levels.

Improving the bottom line

Organizations with leadership development programs in place tend to see a boost in bottom line. The financial impact is due to a variety of factors, one of which is simply that there are now more people in the company who are well prepared for business coach and mentor challenges and who can understand the high-level strategy.

Second, you will be saving on billing costs. When employees know that management has made an investment in them and that not only do they have opportunities to grow, but there are roles available to grow, they are more likely to stay.

Another factor that positively impacts the finances of the company is the increase in productivity. Employees who feel nurtured and can see a future for themselves at the company are much more likely to participate in their work, which motivates others towards higher productivity as well.

Attract, develop and retain talent

A leadership mentoring development program is an attractive feature for companies looking to recruit. Changing organizations to get the growth you need is frustrating and time-consuming, and knowing that an organization will invest in its future leaders makes it a much more attractive target for candidates.

For similar reasons, organizations can also expect better retention. Many employees leave their jobs because they feel they are not learning anything new or, if they are, they do not have the opportunity to move into a position where they can apply that knowledge. A leadership development program is an official commitment to helping top-tier employees not only develop their skills, but also find new roles within the company to exercise these skills with long-term influence.

Drive the execution of the strategy

Mastering strategic execution should be a key component of any leadership development program. An organization will not only have brighter workers capable of turning goals into action, but will also develop team members trained in the art of influencing through non-direct reporting lines. These future leaders will learn to take quarterly and annual goals and break them down into actionable tasks and, perhaps most importantly, they will know how to mobilize workers across teams to achieve stellar results.

Don't underestimate the impact of a well-designed program in fostering broader connections throughout the organization. When the unexpected inevitably happens, organizations, in which people have loose but broad connections, are better able to understand and respond to circumstances.

Increase success in navigating change

For organizations looking forward to industry change, doubling down on this core leadership skill could be a good investment. And even if the only prediction is to navigate smoothly, change is always inevitable. The ability of a leader not only to navigate new territory, but to do so while maintaining authority, respect, and high morale, is crucial to getting out safely on the other side.

If anything, the 2020 pandemic and tumult have shown that companies with leaders who adapt quickly and get everyone to join new ways of working have been the most successful in weathering the Covid-19 storm. It's also wise to always be prepared to react to industry disruptors. Think about how Netflix changed the game for video rental companies like Blockbuster. A leader who can navigate such intense intra-industry competition could prove vital to a company's long-term survival.

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