The Top 3 Indicators Your Company Should Invest in Leadership Training

By Candido Segarra, CEO of Foresight | January 05, 2018
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The problem many organizations face today is not a shortage of people—it is a shortage of skills.

After more than 10 years of success as a leader in management development, we’ve come up with the criteria for recognizing how and when to invest in your organization’s future. Here are the three main indicators that right now is the right time to make financial room for training.

Level of Education.

One of the easiest ways to determine a need for management development is to examine the current level of training within your organization. In 2015, Forbes Magazine published an article pointing out that many top technical performers who are promoted to management roles are often not adequately trained. The article also noted that although employees “get promoted to managerial positions for their superior technical competency—managerial leadership requires people skills, often different from the skills that earned them the promotion in the first place.”

Determine your level of urgency for training and development with the following education figures in your organization:

  • Percentage of employees with a high school diploma:
  • Ratio of managers with an MBA or above:
  • Percentage of management with significant* training in soft people skills: (*significant is defined as one (1) year or more of dedicated learning in an immersive environment conducive to expanding skill sets).
  • Number of managers with an unrelated college degree:

Knowing these figures can help you tap into the vein of your organization’s management culture. If your numbers are high, give yourself a pat on the back—you’re on the right path (though there still exists a need for further grooming as a vital component for succession planning). However, if your numbers are low, consider taking this opportunity to check the overall pulse of your company. Breakdowns in interpersonal communications, time management mishaps, resistance to change, and a lack of alignment with leadership goals are symptoms of organizational decline—and indicators that you should invest in leadership training.

Related: Get Newton With It! A Goal in Motion Stays in Motion.

Turnover Rate.

Another indicator centers itself on your company’s comings and goings—i.e. your rate of turnover. When taking steps to manage employee turnover, it’s important to first identify whether its a healthy rate or not. Average turnover rates across the U.S. vary according to industry, and they’re impacted by a number of factors. A look at a recent survey indicates that the golden turnover rate is around 10%, but the health factor of that number is determined by who's leaving your organization, both millennials and seasoned employees.

If the hires heading for the door are top performers, or from top-tier positions, then you have a strong indication that your organization’s vital signs are weak. Most organizations make use of counter-offers and exit interviews to try and keep their most valuable employees. However, strategic business leaders are advocating the use of management development programs as a way to accelerate productivity and ensure talent retention.

One of our earlier blog posts cited the following from a Harvard Business Review (HBR) article: “Dissatisfaction with employee-development efforts appears to fuel many early exits.” In other words, employees stay where they feel valued—and a reliable determining factor of self-worth comes from cultivating personal potential.

Related: Are You A Tactical or Strategic Business Leader?

Growth / Decline.

The greatest challenges in leadership have to do with overcoming obstacles to business growth. Though, too often growth is misunderstood to mean success. As Pierre de Coubertin, the father of the modern Olympic Games, puts it: success comprises in itself the seeds of its own decline.” Therefore, when budgets are only used to forecast financial outcomes without acknowledging the human capacity to affect the same, growth is a misperception. Instead, the true result is a potential decline. Said another way by David Packard, co-founder of Hewlett-Packard, “more organizations die of indigestion than starvation,” so, controlling growth has more to do with equipping your team with the right skills to foster future success than it does with expansion or production capacity.

Maybe your company has recently undergone an acquisition or a merger? Now’s the time to examine (and establish) your management culture through training. Perhaps your family-run organization is growing beyond its genetic ties? You’ll want a safe forum where you can bridge the gap between new hires and across multiple generations.

In closing, an excellent program takes into consideration management’s highest level of education and transforms the company culture by evolving skill sets and delivering focused, monetary results in the form of return on investment and turnover management. Priming your hopefuls for future roles of responsibility contributes to their value—i.e., investing in your team’s success ultimately leads to your company’s success, too.


Topics: Leadership, Employee Development, Talent Retention, Management Development, Healthy Business Growth

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