Rising appreciation of the importance of leadership development represents a shift in the prioritisation of organisational culture.
With countless organisations actively harnessing competitive advantage by setting and achieving goals relating to communication, collaboration and innovation, the importance of leadership development is becoming an aspect of numerous company visions.
But why is leadership development important and how can an organisation minimise the potential issues that can arise from it?
To help you answer both of these questions, here are the challenges and opportunities that investing in leadership development can result in.
Why is leadership development important – and what is it?
Leadership development describes the activities designed to improve the skills and abilities of leaders, enabling them to achieve greater success in their roles.
Investing in leadership development has ripple effects on the broader organisation’s culture by re-aligning the leader’s mindset with company values.
Benefits of effective leadership development
Developing current and future leaders’ leadership skills introduces a diverse range of benefits that can help to cement an organisation’s growth.
Improve financial performance
Effective leadership is key to improved financial performance. A study conducted by Harvard Business Review revealed that companies with high investments in human capital achieved stock market returns that were on average 5 times higher than companies with insufficient funding in human capital.
Attract and retain top talent
While some companies interpret leadership development and talent acquisition as opposites that respectively cater to the ‘making’ and ‘buying’ aspects of the talent pool, the two are closely intertwined.
Leadership development allows organisations to grow their talent pipeline and promote internal candidates to leadership roles. If an organisation shows reluctance to invest in talented employees, they run the risk of losing valuable skill sets and unlocking the potential of high-performing talent.
By retaining top talent, an organisation will also build a strong platform for attracting individuals with similar skills and values to their high-performing employees. After all, strong leadership helps to build a diverse and innovative environment that will ultimately attract the best talent.
Promote smart decisions and innovative strategies
Strong leadership relies on innovative thinking. But it’s not only leaders that cultivate the seeds of innovation; in fact, around 94% of senior executives involved in a McKinsey report stated that people and corporate culture were the two foundational components of innovation.
People-management is closely tied into leadership development. Fostering a collaborative culture that actively encourages and advances innovative behaviour is a precursor to harnessing innovation as a driver of growth.
Easily navigate change and disruption
Leadership development helps to guide change in the right direction. Mobilising change is about more than just creating a long term strategy: it involves perseverance, creativity, flexibility, strong communication skills and the ability to inspire others.
In order to easily navigate change, leaders must be well-versed in supporting company culture and providing steady guidance towards employees, regardless of whether the organisation is experiencing stagnant, exciting or tumultuous times.
7 issues in leadership development
Leadership development requires time and resources in order for it to address relevant issues that will future-proof your organisation.
To ensure that your leadership development efforts are supported by the entire workplace, here are 7 leadership development challenges and how to address them.
1. Managing time and resources
Leadership development challenges in HR often revolve around difficulties in managing time and resources. It can be complex to assign a dedicated block of time for leadership development initiatives when other pressing issues are constantly arising and demanding your immediate attention.
Successful leadership development will require a level of delegation, scheduling and prioritisation. Ensuring that you carve out an allocated period of time to hone in on building skills in emerging and current leadership is a necessary investment in organisational development.
Some tips to more effectively manage time and resources when investing in leadership development are:
- Incorporating eLearning tools by adding to or improving your organisation’s knowledge database
- Be realistic in what you want to achieve in leadership development by prioritising specific pain points
- Roll out leadership development initiatives in phases
- Organise a staff training session on coaching skills to incorporate learning and development outside of a formal training structure
- Invite guest speakers to share insights at staff training sessions or meetings
2. Promoting openness to learning
Workplace culture needs to facilitate learning and in turn leadership development. Without the support of a forward-thinking environment that values the pursuit of continuous learning, the skills built in leadership development may unravel when transferred in a real working environment.
When promoting an openness amongst employees, there must be systems in place that allow an organisation to creatively adapt to new insights or industry developments and transfer that knowledge amongst individuals. The way that this is accomplished will look different amongst organisations, but key features found in learning organisations include:
- Experimentation with new activities and approaches
- Using data rather than assumptions to inform decision making
- Implementing ongoing training programs and knowledge sharing platforms
- Creating company-wide learning objectives
3. Building a culture of mindfulness
Mindfulness can be a powerful tool in effective leadership development. Mindfulness shares a close connection with self-awareness, emotional regulation and attention – all of which are key traits that should be prioritised in leadership.
A culture of mindfulness encourages individuals to re-examine their self-interest, reign in their ego and manage their emotions in a way that benefits their team and organisation. Nobody wants to be on the receiving end of angry outbursts, no matter whether it’s their boss or a fellow colleague.
Mindfulness deconstructs social barriers to high performance in the workplace, such as cliques, office politics and vague communication. To fully harness the benefits of leadership development, an organisation must take concerted action to encourage mindfulness amongst employees – whether it be through introducing a quiet space, teaching staff mindfulness exercises or practising gratitude.
4. Managing diverse employee needs
Leadership development should ideally promote diversity.
Managing diverse employee needs through strong leadership is fundamental to attracting and retaining talent in addition to driving revenue. A recent study by McKinsey found that organisations with higher levels of ethnic and racial diversity were 35% more likely to earn higher profits than companies that lacked diversity. Diversity in leadership can be fostered through creating inclusive leadership development opportunities and DE&I (Diversity, Equity and Inclusion) initiatives.
Inclusivity in leadership has a direct impact on meeting employee needs by leveraging diverse thinking and more acutely monitoring the organisation’s talent pipeline.
5. Recognising employee potential
High potential employees play a crucial role in driving organisational growth and obtaining long-term success.
By investing leadership development training in high-potential employees, an organisation is nurturing internal talent and cutting on the costs (and time) that’s associated with external hires. It also helps to create a working environment that rewards employees for their contribution by providing them with opportunities for career development.
6. Balancing short-term work and long-term vision
Leadership development must address the balance between short-term work and long-term vision. Both aspects stabilise an organisation’s growth and set the foundations for future leadership objectives.
While finding the exact intersection where current concerns meet future growth plans may be a timely process, it’s important to address both in leadership development. Investing in current and future leaders will lay the groundwork for meeting the demands of short-term work and crafting your organisation’s long-term vision.
7. Unifying people around organisational vision
It’s easier to lead a defined group of people rather than a collection of unrelated individuals who share few interests or values.
Leaders often speak about unifying people around an organisational vision. But achieving this goal in practice requires more than just talking about it in staff meetings or newsletters. A skilled leader will know how to create a positive culture in the workplace that will inspire employees to feel passionate about the organisation’s mission.
Employees will look to their leaders to decide what this unity will look like in practice. While leaders can lay the foundation for a streamlined vision, it’s important to note that a fully-fledged value system can’t be implemented on just a top-down approach. By making smart hiring decisions, increasing transparency and requesting feedback from employees on company values, an organisation can encourage personal and corporate value alignment.
Enhance your leadership development program with PerformHR leadership coaching
Leadership coaching is a core component of managing expedited leadership development.
PerformHR offers bespoke leadership coaching, HR coaching and training programs that are designed to grow the skills, capabilities and mindset of emerging leaders. To find out more about why leadership coaching is important in unlocking new skills in high-performing talent, get in touch with our team today.