5 Ways Leadership Development Drives Profitability
Leadership development is one of the most important drivers of profitability because its benefits and failures touch every piece of the business. Your profitability depends on those that lead your teams and how successful they are in these 5 areas: culture, engagement, customer retention, connection to the mission, and leadership alignment. Culture is the mindset and behaviors, engagement is employee enthusiasm and production, customer retention is delivery and execution, connection to the mission is strategy and goals, and leadership alignment is communication.
1. Leadership Teams Drive Company Culture
A company’s culture is created through a shared set of beliefs and key mindsets that are developed by the behaviors and experiences of an organization. These collective beliefs and behaviors can be developed immediately or over time but will always be one of the top factors in driving positive or negative results for an organization. Therefore, leadership development and management training are two critical elements in building a strong culture. Leaders are responsible for understanding and maintaining alignment of the vision, goals, and values of an organization so they can consistently and collectively create the experiences and deliver a unified message to help guide and develop positive behaviors.
The behaviors leaders exhibit, tolerate, and reward help employees perceive what’s accepted and expected. The saying “attitude reflects leadership” illustrates why leadership teams drive company culture. If a team is disengaged and non-collaborative, it’s usually a reflection of behaviors at the top. Leaders need to clearly define their culture, manage that culture, align culture with strategy and desired results, and leverage culture during times of change. Remember that mindsets and behaviors must first change for the culture to begin shifting in the needed direction.
2. Leadership Development Programs Influence Employee Engagement
Engaged employees are those that are excited about their contributions and understand how they make an impact on the organization’s results, they feel a connection to their company’s purpose, they are committed to the goals and values, and are motivated to go above and beyond in pursuit of the company’s vision. Gallup’s 2017 data states 85% of the workforce is not engaged or actively disengaged. This is an alarming statistic, it’s telling us that many of our employees give their time but are not putting in their best effort. Employee engagement needs to be taken seriously, this disengagement among the workforce is equating to approximately $7 trillion in lost productivity.
Here’s the good news, you can increase employee engagement through leadership development programs with a clear engagement strategy and an understanding of how that strategy translates into everyday rituals. Leaders need to be ready, willing, and open to change, so we recommend involving your leadership team in the development program planning process. This increases their engagement and commitment to the program.
3. Leadership Affects Customer Retention
A core driver of long-term profitability is the ability to successfully service and retain customers. Leaders are driving the strategy, developing the employees, and are responsible for holding teams accountable in the areas of customer service, communication, delivery, and results. Their strengths in these areas can make a huge impact on the level of service provided and the level of perceived value. Leaders set the bar for how the team should act, respond, and communicate with customers. If there is a disconnect between leaders and employees, the fall-out will be unclear expectations, decreased employee motivation, increased team frustration, and ultimately disappointed customers. Leadership behavior can drive customer loyalty through leadership development programs that are designed to utilize customer feedback data and ongoing monitoring, outline service level expectations, and a communication strategy and plan to tackle difficult situations. Retaining current customers requires fewer resources, time and money to maintain so making sure your leadership development is focused on retaining clients will have a big impact on profitability.
4. Leadership Drives Mission Success
Successful organizations have leaders that embody the appropriate mindset that aligns with the mission and vision of the company. Having the right mindset separates leaders who achieve their goals from those who do not. Leadership teams drive mission success by telling purposeful stories, behaving in a way that aligns with the mission and goals, rewarding and recognizing behaviors that drive desired results and inspire a connection to the mission by encouraging and empowering engaged employees to have a bigger voice.
5. Leadership Development Increases Alignment at The Top
A company’s ability to maintain alignment at the top is critical in developing a strong culture, increasing employee engagement, retaining customers, and encouraging a connection with the organization’s vision, mission, and values. When leaders are not aligned they are cultivating a chaotic environment full of miscommunications, inefficiencies, and unclear expectations. Having ambiguous goals, no guiding principles, or rewarding culture killing behaviors can send your business into a negative tailspin lacking trust, accountability, and ownership. Leadership development programs help organizations achieve strategic and leadership alignment by equipping employees with a clear understanding of the business, team, and individual goals and actions and helps them understand how that translates into better business performance.
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