Three Solid Reasons for Leadership Development

Why is the process of finding a leader–whether to backfill someone or to fill a new role–often treated as an isolated event rather than an ongoing process? With the cost per hire only rising, why do so few organizations have a process for identifying and cultivating leaders within their existing talent pool?

Neil Nicoll, President and CEO of YMCA warned us in Finding Leaders for America’s Nonprofits: Commentaries that, “Until [we] become much more intentional about development of internal talent, we are doomed to an ever-growing leadership deficit.” That was three years ago.

Companies need to change the way they are sourcing leadership talent. Rather than look outward when a leader is needed, they should instead continuously look inward to identify candidates with leadership aptitude and invest in honing their skills with development programs.

Regardless of whether you ultimately hire leaders from within, simply having a leadership development program yields important benefits for any organization. Here are reasons to do it:

Leadership Programs Boost Employee Engagement

A study conducted by ACCOR found that although 90% of leaders say employee engagement impacts business success, 75% have no engagement plan or strategy. To that end, development programs give employees the opportunity to strive toward something more meaningful and valuable than their day-to-day work. And that makes them happy.

Leadership development is serious stuff. It takes time and dedication to make it work. If you’re going to adopt an official leadership development program, be sure to first identify your goals for the program.

Leadership Programs Increase Employee Performance

It’s hard to deny a linkage between development and performance. As John Robak, Executive Vice President and Chief Operating Officer at Greeley and Hansen, attests, “Those individuals in our organization who are inspired tend to outperform. That’s because the more well-rounded you are, the better you’re able to perform.”

Makes sense, right? The companies outperforming you certainly think so. In fact, the highest performing organizations spend 36% more on development than their less successful counterparts. And the organizations that are doing this effectively understand what their future needs are going to be, and understand how to engage their potentials and give them the opportunity to develop the skills that they need to succeed in the operation.

Leadership Programs Improve Retention Rates

Many organizations see investments in employee development–leadership development, in particular–as a gamble. If the employee leaves, those investments walk out the door and potentially into the hands of a competitor. For those who cite turnover as a reason not to invest in developing employees, though, the truth is that leadership development and opportunities are actually a leading retention strategy.

“Gen Y tends to be more fluid and move more frequently, which can be intimidating for employers worried about turnover. We see the exact opposite,” says Robak.

Don’t get me wrong–turnover is a valid concern, but if you’re hemorrhaging top performers, it’s rarely because you’ve invested too much in developing them.

Transparency is King in Leadership Development

As Roback points out, “In the absence of feedback, people tend to create their own.” Whatever decision is made–whether it’s a promotion from within or an external hire, it’s critical to communicate the why. Robak goes on to say that, “We don’t just want our message to be heard–we want to ensure it’s received.” Otherwise, all of your best intentions are for naught.

What successes have you had in developing leaders internally? What challenges is your organization faced with when developing a pool of leadership candidates?


Kyle Lagunas is an HR Analyst at Software Advicean online resource for reviewing and selecting software. He reports on important news, interesting conversations, and what’s trending in the world of talent management, human resources, and recruiting. 


  1. says

    Please pass this on to David:


    Your recent blog about Topgrading is “understandable” to me, but totally incorrect. In my soon-to-be-released 3rd edition of Topgrading I start with citing 3 myths about Topgrading and this is one. I’ve begged Jack to say, “Rank everyone and fire the bottom 10% BUT ONLY IF THEY ARE CHRONIC LOW PERFORMERS WHO HAVE BEEN GIVEN EVERY OPPORTUNITY TO BECOME A HIGH PERFORMER. He reluctantly agrees.

    I support annual rankings, but the ranking categories HAVE to match the reality. If there are 5% chronic low performers, then the bottom group should have 5% in it and can be labelled Low Performers. I quote Bill Conaty (recently retired head of HR at GE) who explains that for all those years (and even today) GE created the categories to match the reality, and GE never fired people who were doing the job, just because they fell in some arbitrary category.

    Topgrading (I am the originator) is all about hiring and promoting the best people, and in my book I make clear that firing people is part of a performance management system … and people should fire themselves when they chronically fail to meet the performance goals they agreed to. In my book there are 40 case studies and the average improvement in hiring is from 26% high performers to 85%. (see for the companies … and note that the CEOs say Topgrading has made the company more successful).

    I greatly admire Jack Welch but I’ve disputed his yank and rank statements, saying in my book that he never did it at GE (I quote Conaty) and to fire the bottom 10% yearly, even if there are A Players in that group, is “nuts.” The morale of such an organization would be horrible. I’ve written Topgrading Tips articles on it.

    I WISH Jack would say 1) Topgrading is the best hiring/promoting approach on the planet, 2) ranking people is recommended and the categories have to match the reality as they have at GE …, so no high performer is in a “Bottom 20%” or whatever category, and 3) people should fire themselves for failing to meet targets they agreed to … and NEVER fired if they are a good performer just because of a ranking system.