One of the biggest challenges leadership, learning, and talent development professionals face when they propose a new initiative is convincing their CEO of the financial impact of the proposed initiative.
Without a clear sense of the positive financial impact, it’s easy for a leader to dismiss a new proposal as being too disruptive, too expensive, or too time consuming.
An analysis of more than 200 organizations by The Ken Blanchard Companies found that every year of delay in improving leadership skills costs the typical organization an amount equal to 7 percent of their total annual sales. This represents millions of dollars each year—because poor leadership behaviors not only increase the loss of high potential employees, they also lower the employee work passion and productivity of the people who remain with the company.
Research originally conducted by Leigh Branham, a leading authority on turnover and retention and author of The Seven Hidden Reasons Employees Leave, identified that at least 9 percent and possibly as much as 32 percent of an organization’s voluntary turnover can be avoided through better leadership skills. Branham, who partnered with Pricewaterhouse Coopers in conducting the study, identifies that trust, hope, worth, and competence are at the core of most voluntary separations. When employees are not getting their needs met in these key areas, they begin to look elsewhere.
Employee Work Passion
Research conducted by The Ken Blanchard Companies using its Employee Work Passion Assessment has found significant correlation between positive work intentions and a leader’s ability to build trust, use coaching behaviors, and create an engaging work environment. This environment includes high levels of Meaningful Work, Autonomy, Growth, Fairness, Collaboration, and Feedback, along with six other factors (see complete list here.) Failure in any of these areas on the part of the leader leads to lowered intentions on the part of employees to perform at a high level, apply discretionary effort, remain with an organization, endorse it to others, and act as a good corporate citizen.
Providing employees with the tools, resources, direction, and support they need to perform at their best is the key to creating a high performance work environment. Research conducted by Dr. Paul Leone with a large Fortune 100 financial services company involving 300 managers and 1,200 direct reports found a 5 to 12 percent increase in productivity among direct reports of managers who attended leadership development training and immediately began using the new skills they had learned.
Leadership Impacts the Bottom Line
Leadership matters! After all, leaders help employees set goals. Leaders make sure those goals are in alignment with overall corporate strategy. And leaders are responsible for providing the direction and support employees need to succeed on a daily basis.
Even though a leadership development initiative—like any change—can be disruptive, difficult, and financially challenging, taking no action is often the most expensive option of all.
Most executives instinctively know that strong leadership is essential for overall organizational success. By evaluating and improving leadership practices throughout their organization, leadership, learning, and talent development professionals can remove a persistent drain on financial performance and allow their organizations to grow and thrive.
# # #
Want to learn more about quantifying the impact of leadership training? Join us for a free webinar!
Making the Business Case for Leadership Training
Thursday, August 24, 2017 at 9:00 am Pacific Daylight Time
Organizations lose millions of dollars each year due to poorly trained leaders. In this webinar, David Witt, researcher and author of The Ken Blanchard Companies eBook 7 Ways Poor Leaders Are Costing Your Company Money, will share how poor managerial behaviors negatively impact engagement, alignment, productivity, and employee retention.
Drawing on original research conducted by The Ken Blanchard Companies, Dave will explore:
- The 7 biggest gaps between employee expectations and leader behaviors
- The 3 ways to measure the bottom-line impact of leadership training
- The 5 keys to leadership training that works
Don’t miss this opportunity to learn how to evaluate your current level of leadership readiness, how to measure the impact of your leadership development, and how to get started on deploying training that makes an immediate difference. The event is free, courtesy of The Ken Blanchard Companies.