There are three key findings from Bersin’s research that I think are valuable for you to understand:
What HR Investments have the Biggest Return on Investment?
Of a long list of HR capabilities that companies invest time and money in, where organizations get the most “bang for their buck” is leader and manager development:
Investment in Leadership Development is Down
Despite leader and manager development being the most impactful HR investment, investment in leadership development is down.
Consider these statistics:
- 60% of companies spend less than $500 on leader and manager development per year per person
- Only 18% of companies give coaching to managers and leaders
- Only 15% of companies take care of leaders and actively monitor and mitigate leader burnout
- Only 17% of companies are growing their leadership development budgets
It is no wonder that only 25% of companies believe their leadership development is delivering high value to the company.
How Investment in Leadership Development Pays Off
But, when organizations adequately invest in leader and manager development, here are the benefits:
What I am Observing
In my five years of running my leadership development consultancy, I have heard the word “budget” more in the last 4 months than any time before that. Numerous long-standing clients and big-name companies have completely cut or significantly reduced their leadership development budgets.
But, it is ironic (or not), because the companies that are slashing their leadership development budgets are the ones that have the least vertically developed leaders, and it is this lack of vertical development that has led to their challenging financial state.
Elevated Leaders implement Elevated Systems that Elevate Organizations
I recently published a paper in Leader to Leader (Francis Hesselbein’s journal) that explains why an investment in the vertical development of leaders is so critical to the growth and long-term success of an organization, division, group, and team. It can be summarized as this:
For me, Alan Mulally’s experience and success as CEO of Ford Motor Company is a great example of this.
Ford brought in an elevated leader who implemented his elevated system (Working Together Management System), which dramatically elevated the organization.
For more on this topic, check out this video: Investigating the Sophistication of Your Executive Team
And, if you want to invest in better elevating your leaders, let’s connect.