The numbers don’t lie — company leaders understand the importance of investing in leadership training, but they don’t see the results they expect. Does that sound familiar?
- 83% of organizations believe that it’s important to develop leaders at all levels.
- However, only 5% of companies have taken steps to put training in place.
- Over 87.6 billion was spent on training and development by companies in the US in 2018.
- Shockingly, only 10% of CEOs believe their leadership programs produce beneficial results!
If only 10% of CEOs believe their leadership programs are having a positive impact on their business, why are they investing so much money on it?
They know it’s important and something they should focus on, but their challenge is learning how to measure the data and calculate ROI. They just keep trying things without any way to measure the results.
Because of this, CEOs just throw money at organizational leadership training and development — an investment based purely on their hope of seeing improvement. They are stuck in a cycle of implement, fail, tweak, and try again.
It’s time to let us show you how to break the cycle and reach positive ROI from your training investments to develop organizational leaders.
What is Organizational Leadership?
Organizational leadership is a management style that encourages leaders to help set the goals for the company while at the same time providing motivation to the team to help them carry out the tasks needed to complete those goals.
Let us show you why organizational leadership is so important, what skills an effective leader should have, and how to hire and train the best leaders.
As a bonus, we’ll also show you how to calculate and measure ROI on your leadership training programs.
Too busy to give this article your full attention? Click here to be taken to a summary of the 5 essentials that you should know about organizational leadership.
Essential #1: Understand Why Organizational Leadership is Important
Traditional business models are comprised of 3 levels —
- a CEO (the leader)
- the people who work directly under the CEO (the managers)
- the people who work under the managers (the employees).
The way we do business today is much different than how we have done it in the past. The 8-hour shift 5 days a week is no longer normal. We are seeing more and more companies offering remote positions, flex schedules and allowing employees to work from home.
These changes are causing CEOs to have to rethink the way they operate and manage their staff. They have to utilize technology and different tactics to do their job.
Leaders are having to learn how to motivate their team through email, video chat, and text instead of just holding a meeting in the conference room or calling someone into their office.
You need to position effective leaders that inspire and motivate your staff to do their best work at all levels of management to keep your company growing and achieving crucial milestones and goals.
Organizational Leadership is more than just day to day management of tasks and people. It involves setting goals for individuals to achieve company objectives, communicating, explaining, and coaching people toward reaching their goals, and keeping them focused on company goals.— Rhonda Beard
The key to positioning effective leaders throughout your company is knowing what skills and personality traits the best leaders have. Then you’ll know how to spot those traits in current employees and during interviews with potential hires.
Essential #2: Know What Skills an Effective Leader Should Have
The most effective leaders are “the motivators.” These are the people you can visualize in a cheerleading outfit, waving their pom-poms, spurring us all to victory with their rallying cries of “Go team!”
They are also “the observers.” Imagine the quiet guy in the boardroom that hardly says a word the whole meeting. He just sits and observes with a sprinkled question here and there. Then when he does speak up, what he says is so motivational and inspired that everyone is speechless.
OK — we might have described those personality types a bit dramatically, but you get the idea. There is a passion to true leaders that can’t be taught, but it can be fine-tuned.
The most important skills and personality traits every effective leader should have are:
- The ability to communicate constructively and actively listen to their staff.
- An overall positive personality with the capability of motivating and inspiring others to achieve their goals.
- Excellent time management and organizational skills.
- Empathy for their coworkers and clients.
- Honesty, integrity, and a good moral compass.
- Top-notch problem-solving skills.
- The capability to take and offer honest feedback or criticism.
- A strong commitment to their work.
- A capacity to handle responsibilities well without getting overwhelmed.
- The ability to read and respond to the body language of others.
- The capability to adapt to changes quickly and improvise when necessary.
- Passion and perseverance.
Essential #3: Learn How to Hire the Best Organizational Leaders
Typically, CEOs have structured processes in place for filling entry-level positions, but not for leadership or management positions. They know that putting the wrong person in those roles can have a detrimental impact on the company and want to micromanage the hiring process.
CEOs tend to wing it when interviewing candidates for these roles. They rely on their gut to help them find the right person — this is not the most effective approach if you want to hire the best organizational leaders.
There are a few critical mistakes we see employers make when hiring leaders.
- You hire someone based on their personality and how well you connect.
- You hire that person after just one interview because you think they’re perfect for the job.
- You hire a friend or family member because you feel like you can trust them to do a good job for your company.
- You need to get the job filled, so you hire the first candidate that comes close to meeting the criteria instead of waiting for the best candidate.
Instead of trusting your gut, think about the ideal person you would want to see in that role. This person can be someone you make up or someone you know that you believe could succeed as a leader in your business.
- What about them makes you believe that they are a good leader?
- What talents or personality traits do they possess?
- Write it all down and make it the new job requirements for that role.
Next, you need to put processes in place to thoroughly screen and vet every single candidate — not just entry-level employees.
Use behavior assessment tools, and detailed, structured interview questions to help you determine if they possess the required skills and traits of your “ideal leader”.
But, before you set out to hire new people, look to the employees you already have to fill the open spots first. Promoting from within can be much more cost-effective and beneficial with proper training and mentoring for your employees.
Essential #4: Learn How to Train and Develop the Best Organizational Leaders
Let me tell you a story of organizational leadership training done right.
Mike O’Neill recently assisted one of our manufacturing clients with leadership development training. This client didn’t have a structured selection and onboarding process in place.
Performance appraisals were conducted on a bare minimum basis, and they avoided taking corrective action. His client was desperate to turn things around, and he knew there had to be something out there that could help.
After their leadership development work with Mike, this manufacturing company benefited from significant improvements in several different ways.
Our client reported
- lower turnover due to the adoption of our recommended selection and onboarding process.
- Their supervisors are now managing with confidence vs just winging it.
- Supervisors are less inclined to pass off issues to HR and are more willing to own up to their own issues.
- Performance Appraisals are no longer given lip service but are more employee-development centered.
- Corrective Action is more likely to be done right, and sooner, before problems get out of hand.— Mike O’Neill
Customized leadership training programs like this are the only type of leadership programs you should be investing in.
Purchasing “one size fits all” or “cookie-cutter” training programs aren’t going to give you the desired results you’re hoping for, and you shouldn’t be just “hoping it helps” in the first place.
You should be tracking and measuring the results of your leadership training programs so you know for a fact that your investment is going towards something that’s making a real impact on your bottom line — in a good way, of course.
Essential #5: Understand How to Calculate ROI on Leadership Training Programs
You might think that measuring and tracking ROI for your leadership training programs is impossible — but it’s not.
The formula for calculating your ROI is:
ROI = (Total Program Benefits - Total Program Costs) / Total Program Costs x 100%
If you gain a benefit of $1M in 12 months and the cost of training is $250K for the same period, the net benefit is $750K; divided by the costs of $250K (and multiplied x 100) this equates to a 300% ROI.
Quick Summary: The 5 Essentials of Organizational Leadership
Organizational Leadership: the goals and needs of the individual employees are aligned with the goals and needs of the organization.
- Organizational Leadership is Important. Without top-notch organizational leaders in place, your company can’t continue to grow and pass crucial milestones. Employee dissatisfaction and turnover is much higher in companies who lack highly skilled and effective leaders.
- Recognize Effective Leaders. An effective leader should be able to motivate and inspire others to work as a team toward a common goal.
- Hire the Best Organizational Leaders. Create and implement hiring processes to screen candidates with behavior assessments and other tools. Weed out the candidates who don’t match your ideal employee for that position. Quality is more important than speed. Take the time needed and wait for your best candidate.
- Train the Best Organizational Leaders. Promoting from within is much more cost-effective and makes for happier, more motivated employees. Offer leadership training to all employees and promote those that excel to leadership positions.
- Use the following formula to calculate ROI: ROI = (Total Program Benefits - Total Program Costs) / Total Program Costs x 100%
Download Your Free Guide to Managing Humans
Are you sick of spending thousands of dollars on leadership training that doesn’t work? Do you want to implement training programs that produce a measurable return on your investment?
A customized leadership training program considers the unique needs and personalities of your employees and is tailored to benefit each individual on a case-by-case basis. Your current processes should be analyzed and assessed for potential pitfalls.
Our expert consultants created this free guide to help you achieve the results you’ve been hoping for. You’ll learn how to maximize your workforce productivity, minimize turnover, overcome team dysfunctions, and much more.
Download your free copy of our guide here: A Tactical Guide to Managing Humans.