Proof of Leadership Blog

Proof of Leadership Blog: developing great leaders

WHAT IMPACT SHOULD LEADERSHIP DEVELOPMENT DELIVER?

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Seeking the long-term…

We all say that leadership development is important but does it really have impact?

This is particularly important when you are aiming to invest in the development of a key section of your leadership team.

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Short-term impact

Some of the short-term (just after the program) indicators of impact can include:

  • People are talking about it positively – both participants and their managers – (there may be some pockets of negative talk and this is useful to investigate)
  • Participants are behaving differently and taking action, and this is being seen by their managers
  • You are seeing more “informal” connections happening across the organisation.

Long-term impact

Research evidence suggests leadership development should deliver long-term impact for:

  • Improved individual, team and organisational performance
  • Improved organisational reputation with external and internal stakeholders
  • Increased agility and ability to lead in complex business environments
  • Strengthened employee engagement and organisational culture
  • Increased attraction and retention of talented people
  • Reducing leader derailment and replacement costs
  • Which all support sustained and sustainable performance

While of course there are many contextual issues that impact upon these type of organisational results, leadership development is a contributor. Some useful research is provided below.

CONTRIBUTING TO THE DIALOGUE ABOUT LEADERSHIP IMPACT AND ITS DEVELOPMENT

While there is a lot written and researched about leadership development, particularly in relation to the “capabilities/competencies” that need to be delivered and about the “how to” or methods of development, much less is available help us explore what we should seeking through leadership development.

  1. Improved individual, team and organisational performance
  • Organisations with the highest quality leaders were 13 times more likely to out-perform their competition in key bottom-line metrics such as financial performance, quality of products and services, employee engagement and customer satisfaction.[1]
  • High-performing workplaces – characterised by leadership that supports innovation, employee engagement, fairness and customer focus – have profit margins nearly three times higher than low-performing workplaces.[2]
  • These workplaces are better at achieving their financial goals, are stronger at building customer relationships, are more innovative and recognise that leadership capability is fundamental to their success. [3]
  • The recent Study of Australian Leadership (2016) noted that leadership is also foundational to the performance of organisations in more complex business environments.[4]
  1. Improved organisational reputation with stakeholders

Research indicates that the effectiveness of the senior leadership team is regarded as the second most important factor (after financial results) in determining business success [5] and the evidence includes: the quality and reputation of leadership make a significant difference to stakeholder and shareholder support for organisations (research indicates that investment analysts place a premium of 15.75% on effective leadership).[6]

  1. Greater agility and decision-making in a complex operating environment

A recent IBM study, of 1,500 CEOs worldwide, identified complexity as a factor increasingly affecting the leadership capabilities required across organisations [7] and some interesting data includes:

  • While leaders being are being given more responsibility, being asked to achieve more and broader objectives and to deliver results faster, studies suggest that only 7.3% of leaders are considered to have the full skill set of capabilities that are required to work in this complex and emergent environment.[8]
  • Research indicates that some of these new capabilities include:
  • a global cultural perspective;
  • a mindset of growth and openness to understand the environment;
  • an ability to quickly adapt to changing circumstances;
  • a capability to engage people across the business in change; and
  • an ability to identify and respond to complex operating environments.[9]
  1. Improved culture and employee engagement in organisational performance

Leadership quality affects much more than the financial bottom-line; it also affects employee retention and engagement:

  • a recent study has identified organisations with higher-quality leadership as being up to three times more likely to retain more employees than their competition.[10]
  • another study indicates that high performing workplaces have higher levels of commitment and engagement than in other workplaces.[11]
  • High-performing workplaces with effective leaders have better results in attracting and retaining good quality people as well as in building employee engagement and job satisfaction.[12]
  1. Greater organisational ability to attract and retain talented employees

Where talent management in organisations once focused on recruitment, the focus is now broader. Development and support during transition are the keys and the research [13] In this way, organisations can create a culture in which talented individuals can thrive.[14]

  1. Reduction of leadership derailment

Leaders in transition – including moving functional areas or being promoted from individual contributor to management – are particularly vulnerable to disillusionment and derailment.

‘Leadership derailment’ can include behaviours such as poor performance or lack of delivery; not updating leadership style; lacking core skills for new challenges; and poor focus on people development, is expensive for organisations.[15]

Organisations can support transition, and reduce derailment, through: being clear about the capabilities required at each leadership level; establishing mentors for individuals taking up new roles; and requiring that individuals take up leadership development (such as executive coaching) to support transitions.[16]

© Amanda Martin 2016

Amanda

amanda@proofofleadership.com

 

[1] Boatman, J. & Wellings, R.S. (2011) Global Leadership Forecast. DDI.

[2] Boedker, C., Vidgen, R., Meagher, K., Cogin, A., Mouritsen, J., & Runnalls, J. M., (2011) Leadership, culture and management practices of high performing workplaces in Australia: the high performing workplaces index, Society for Knowledge Economics.

[3] Ibid.

[4] Study of Australian Leadership (SAL) 201, p.23.

[5] Holland, S. & Thom, M. (2012). The leadership premium: How Companies win the confidence of investors. Deloitte.

[6] Ibid.

[7] Ancona, D. (2005). Leadership in an Age of Uncertainty. MIT Leadership Centre.

[8] CEB. The rise of the network leader: reframing leadership in the new work environment. Executive Guidance for 2014.

[9] Ibid.

[10] Boatman, J. & Wellings, R.S., op.cit.

[11] Study of Australian Leadership (SAL) 201, p.26.

[12] Deloitte 2013 Human Capital Trends 2013 Leading Indicators. Deloitte: U.S. edition.

[13] Deloitte 2013 Human Capital Trends 2013 Leading Indicators. Deloitte: U.S. edition.

[14] Ibid.

[15] Bumker, Kram, & Ting, 2002; Hughes, Ginnett & Curphy, 2008.

[16] Watkins, M. (2003). The First 90 Days: Critical Success Strategies for New Leaders at All Levels. Boston, MA: Harvard Business School Publishing.

 

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