Leadership Development: What’s the Return on That Investment?

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Leadership Development: What’s the Return on That Investment?

What’s the return on that investment? It’s a good question and one that any smart business leader will ask anytime resources are going to be expended. Unfortunately, too many senior leaders think of leadership development as an expense instead of an investment because it’s difficult to determine a return.

While some effects of leadership development are fairly easy to measure, some are not. Instruments are available, but they usually don’t produce hard numbers that are easy to compare. Some examples are,

1. Better worker morale. Good leaders simply have happier workers.

2. Improved company loyalty. Workers who have a good leader will exhibit much greater loyalty which often manifests as new ideas and improved processes. In short, employee engagement.

3. Better leader selection and development. Good leaders produce more good leaders.

The good news is these difficult to measure results of a good leadership development program lead to some much easier to measure results.

1. Reduced expense of employee turnover. Employees often quit because of the boss, not the job. People in leadership positions, who don’t know how to lead, can create a toxic environment that entices their workers to look for other opportunities. Turnover is expensive. Here’s a simple calculator to help you find your actual cost of employee turnover.

2. Reduction in equal opportunity and other complaints from discontented employee. Good leaders will have fewer of these complaints because their workers are happier with their work situation.

3. Increased production. A work unit with a good leader will produce more so the value of each worker increases.

When leaders receive the training necessary to develop critical leadership skills the result is a measurable improvement in the organization. In fact, it will probably bring the highest return of any investment you’ll make!