Making the Business Case for Leadership Development

One of the biggest challenges HR professionals face when they propose new leadership development initiatives is convincing CEOs of the financial impact of the proposed initiative.  Without a clear sense of the positive financial impact, it’s easy to write-off a new proposal as too expensive, or that now is not the right time.  The lack of urgency to improve performance is based on the idea that that the current level of leadership skill in the organization is good enough.  But is it?  A look at most companies has shown that the typical organization is leaving millions of dollars in untapped potential lying on the table through less-than-optimal leadership practices. 

If you’re looking for some help in making the business case for a leadership development initiative in your organization, here are three resources that can help. Just click on the heading and you can access the information right away.

1. Whitepaper–The Leadership-Profit Chain 

In 2006, researchers from The Ken Blanchard Companies conducted a year-long study to identify the connections between leadership effectiveness, employee passion, customer devotion, and overall organizational vitality.  This resulting whitepaper identifies several correlations: 

  • Effective operational leadership directly predicts positive employee passion
  • Positive employee passion directly predicts customer devotion
  • Customer devotion directly predicts organizational vitality 

2. Whitepaper–The High Cost of Doing Nothing 

In this white paper you’ll see why “good isn’t good enough” when it comes to the impact that leadership practices have on employee turnover, customer satisfaction, and employee productivity.  You’ll discover what your cost-of-doing nothing is in today’s dollars.  More importantly, you’ll learn a couple of ideas for identifying ways to recoup some of that untapped potential in your organization. 

3. Online Cost-of-Doing-Nothing Calculator 

This online calculator uses a couple of pieces of information—number of employees, annual sales, current turnover rate, and combines it with desired targets for customer satisfaction and employee productivity to generate a “cost of doing nothing” dollar amount.  It’s a great tool for identifying the impact of better leadership in an organization and also making the business case for a training initiative—especially leadership development.

3 thoughts on “Making the Business Case for Leadership Development

  1. EVERYTHING hinges on LEADERSHIP. Leadership development done right is just smart business. Investing in people with meaningful business goals and objectives in mind is imperative to building cooperation and trust, developing talent, increasing engagement, impacting productivity, unleashing creativity and innovation, facilitating change, enabling organizational learning, and more. There’s something to be said about avoiding excessive costs in tough times. However, investing in an organization’s ability to increase its performance capacity isn’t one of those excessive costs. It’s more of a survival imperative. Maybe the problem isn’t so much one of cost avoidance as much as it is one of not doing a proper up front needs assessment, of not aligning program goals and objectives with meaningful business outcomes, and of not measuring and evaluating program performance and results.

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