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How Investing in Leadership Development Will Save Your Company Money

August 10, 20175 min read

SDI Clarity Insight — This article is part of our Knowledge Base, drawing on 20+ years of organizational design and talent development expertise. Explore our Leadership Development and Talent Consulting services.

Having quality leaders is a requirement for any organization to be successful. Yet many organizations under-invest in developing their current leaders, and more importantly, preparing future leaders to play an important role. Succession issues, growth, and a thin labor market are just some of the factors that are constantly putting pressure on your leadership pipeline.

"Leadership is lifting a person's vision to high sights, the raising of a person's performance to a higher standard, the building of a personality beyond its normal limitations." - Peter Drucker

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Highly Capable Leaders Drive Productivity: Driving productivity extends beyond deadline management. Effective leaders inspire urgency through motivation, relate to diverse personalities, understand what inspires employees, and maximize individual strengths. Well-trained leaders increase internal motivation, boost overall productivity, retain talented employees, and minimize disruption to productive teams.

Ensure That New Leaders Are Successful: Competence in one role doesn't guarantee management capability. Even talented individuals require training to develop strong leadership skills and characteristics needed to support diverse teams. Investing in future leadership development creates smoother transitions and increases success likelihood.

Minimize Costs and Disruptions Associated with Poor Leadership and Turnover: Employee replacement is expensive. When accounting for recruiting, onboarding, lost productivity, and engagement losses, financial implications are substantial. Poor leadership increases turnover, disengages remaining staff, and damages company culture. Developing strong leadership reduces retention costs and mitigates management-related problems.

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