Companies don’t run by themselves on autopilot. Every business is striving hard to capture a more significant chunk of the market. For the organization to grow, momentum and profits require a leader. Businesses would struggle to grow and become profitable without able and robust governance.
Hence leadership plays an important for any organization out there. Let’s find out why leadership training is essential for growing businesses.
Why Leadership Training Is Important??
Most organizations believe that leadership development is the most crucial factor, yet many businesses have implemented leadership training.
One recent survey showed some shocking figures:
- Over the next five years, 84% of organizations expect a shortage of leaders.
- Although 83% of organizations agree that leadership development is essential, only 5% have implemented it fully across all levels.
- Surprisingly 55% of CEOs think the most challenging aspect of their jobs is developing the next generation of leaders.
- More money is spent on leadership development than any other training area, yet 71% of companies agree that their leaders aren’t capable of leading them into the future.
- The majority of millennials (69%) are unhappy with the lack of leadership development in their workplace.
Any growing business needs critical people to lead them. The need for robust and able leadership is pretty urgent and clear. If the current administration leaves, it will put the organization in a delicate situation.
Leadership training ensures a pool of potential leaders so that new leaders and teams can take over and lead the company from the front.
Let’s take a quick look at five critical reasons leadership training is essential for growing businesses.
1. Improved Profitability
Professionals trained well in leadership steer their teams to greater productivity and efficiency. In a study conducted by PwC, they found it – companies that invested heavily in leadership training courses performed better than those that did not.
Having good corporate governance goes a long way in making businesses sustain any disruption that can occur at any time. Strong corporate culture is developed when the top of an organization remains aligned. Employees and customers better understand a business’s vision, mission, and values. This ultimately impacts the bottom line positively and takes the company towards growth.
As a result, revenue and profit margins increase. Project execution improves when priorities align with business goals, employees are more engaged and productive, and there’s less waste when businesses set clear priorities.
2. Talent Retention
Businesses that invest in employee leadership development have a much lower attrition rate compared to companies that don’t invest in such training.
A large majority of employees value the nature of the work more than just the salary. In today’s world, millennials and Gen-Z are looking for positions where they grow as a leader.
Interestingly, HRPA (Human Resources Professionals Association) showed that 63% of millennials felt that their employers were not investing in good governance and development. It is clear for companies, especially startups that investing in leadership training will go a long way in reducing attrition.
3. Succession Planning And Progression
If you look at all the big-name companies, you will find out that they all have excellent leaders in the pipeline. Companies like Pepsi, Tata group, Google, Microsoft, etc., invest heavily in nurturing the future leaders in their ecosystem.
One of the critical purposes of good governance is to enable people to step up in challenging times while leading the company towards growth and sustainability.
One of the prime examples of leadership development is Mr. N Chandrasekaran, Chairman of Tata Sons. After taking over as Chairman of Tata Sons, Tata group companies grew by leaps and bounds in market capitalization, profitability, and customer retention.
Interestingly, Mr. N Chadrasekaran had joined Tata Consultancy Services as a fresher and rose to become one of the prominent leaders in the Tata group. One of the striking examples of why leadership training and development is crucial.
4. Embracing The Innovation
Effective leadership development produces people who are innovation-oriented. Being innovation-driven opens up the opportunity to grow and move forward faster than the competition.
Good leaders embrace innovation which allows them to deliver excellent results consistently.
Interestingly you can note that organizations that invest in leadership development are primarily innovative and data-driven companies. Instead of confining innovation only to the department level, it is made everyone’s business. For any business to move forward, it is crucial to adopt innovation as its core value, and it is only possible through grassroots training.
The pandemic has taught the entire world that it’s essential to focus on governance and innovation. Its time that businesses understand and evaluate how technology can bring about efficiency and increased productivity in the industry.
5. Better Customer Retention
Having excellent leadership motivates and inspires the employees to serve the customers better, and in return, the customers feel valued. This phenomenon holds, especially in the case of customer-facing employees. Amazon acts as the prime example here. Amazon has a customer-first policy; it is this DNA of Amazon that sets them apart from the competition.
Also, customers opt for Amazon because of it. Amazon can retain customers better because the leaders are groomed in that manner.
The development of these programs based on customer feedback, in turn, enhances customer retention and profitability by helping leaders and teams to handle difficult situations.
The best way to navigate the ever-changing workplace world of industry is to invest in leaders through leadership training and development focused on experiential learning.
The world has been changing rapidly, and a lot of market disruption is taking place. Hence for any business to survive in such competitive conditions, it must invest in leadership development programs and courses.
By enhancing people’s ability to solve problems and navigate changes, a good training program ultimately leads to the flexibility of an organization to handle any business environment.