In Pursuit of Competent Leadership - when companies think short-sided and short-term they get a small return on leadership

Over the past several months companies have been performing their due diligence by mulling over their annual budgets and considering which areas are the best to allocate funding to in 2016. Areas under consideration include local charities, marketing, research and development, customer resources, consultants, employee services, and other countless departments. Now is the time to deliberate where and how to spend the company's financial resources that are going to reap short-term and long-term gains.

For most companies it's a painstaking process because of the countless hours dedicated to asking, editing, reconsidering, and negotiating spending requests, not to mention the inside bickering between departmental managers because some believe they are sacrificing more than others. The arguing can go on and on.

As the CEO and executive staff ruminate over where the organization will benefit most from the annual budget an important consideration that is often missed is leadership development. Even though some organizations are really good at identifying the need to develop leaders at all levels of the organization, some fall short of identifying the need to incorporate such an important investment into their short and long term budgets. The indifference may be that some don't see the need or understand the importance, or the organization may believe that they have succeeded in hiring and promoting staff into leadership positions without needing any formal training or development. The company may object to any kind of formal training because up to now they've done well; so why change?

Are we good enough?

So I ask, is "well" good enough for companies that have aggressive strategic business plans for the future? Is “well” good enough for organizations that want to create a leadership culture hence, trust, loyalty and commitment from employees and customers? If so, that means your company is short changing the growth and development of your organization. Cutting back on expensing dollars for training and development is a sure way of failing the company in the long term, its current leaders and most of all, its future leaders. This is a short-sighted view of looking at their budgets and spending forecasts for the current year the company has thereby eliminated any long-term vision of ROI or its strategic business plan.

As business partners, the Human Resources Department needs to help evaluate the short and long term effects of creating effective leaders within the organization, understand the value of cultivating great leaders and the necessary investment (time and financial) and help them succeed. Not just, “how can we save the company money” or reduce employee expenses. This is especially true if the company is growing, evolving, and enlisting change initiatives that affect managers and their ability to lead.

Moreover, if the company is facing any kind of major shift (e.g., merger, expansion, etc.) this would be a good time for human resources include solutions to equip leaders with the tools and knowledge to succeed. In Lean Change Management, (Understand Why Some Organizations Fail in Change Management).

Why Organizations Fail

When a company goes through any kind of change; the organization's priority changes to manage this growth and turns its focus inwards. Members of staff are trained mainly on management and not on leadership simply because there is a huge demand for managing various aspects of the organization as it grows. Employees learn how to solve problems, how to plan and how to manage resources but there is no emphasis on leading.

These kind of organizational shifts call for critical thinkers, great communicators and motivators, team players, and decision makers who are not afraid to be held accountable for their decisions- good, bad or indifferent. These are the leaders needed who can inspire staff, articulate a vision, and engage those who can make the real difference. This is a time to evaluate what is important to the company, its culture, and its leadership values. Regardless of the changes, it's up to the CEO, executive staff, and human resources to collaborate on real leadership development.

Small investments for long-term gains don't work

Don't be short-sighted and look for the cheapest way to deepen your leadership teams. For example, after 2007-08 some companies saw the economic crash as an opportunity to take the time and invest in improving their people, processes, and leadership depth. Although money wasn't flowing into the company, they still invested time and resources with a focus at the long-term gains. Companies need to focus on investing time and financial resources to build a strong leadership culture and create bench depth. Budgets should include space for leadership development and look into additional training that can enhance leadership capabilities. We aren't talking 6 hours of training and your done or sending your executive team and managers to a canned seminar. If cheap is what the company is aiming for, then that is exactly what it's going to get! The results are minimal. Leaders may walk away with a nugget or two, and statistics show that only 10% of what is taught in seminars is all that sticks in the long-term.

Creating a culture of leaders

It's good to have a shelf full of good leadership books as reference material to reinforce the tools that leaders have learned. These are used periodically to fall back on when they are faced with a short-term dilemma or as a “how to” reference manual. There may be training videos as well but that will only suffice for those that are just starting out in a lead or supervisor position. If the organization is looking to create and enforce a leadership and learning culture, making an investment each year to provide appropriate leadership training and development is a win/win. For example, In Toyota's Leadership Model (The Toyota Way to Lean Leadership, J. Liker & G Convis), shows how the company invests in the development of their employees and managers. You can't expect to have great leaders and leadership by giving them a book to read or sending them to the occasional seminar.

Worth budgeting to succeed

Unless your organization is equipped to provide formal, real-time leadership training, coaching, and mentoring you may want consider looking at companies that specialize in executive and leadership development. This is where budgeting to succeed is most important. Leadership training and development is an on-going activity that requires both on-the-job development and professional coaching and mentoring. If your company is focused on its long-term success, then learn about great leadership planning, get help designing a plan for success and budget for it.

The benefit of professional coaching and mentoring is that you get a trained, certified and experienced teacher (or sensei). Also consider that not all leaders are natural leaders and a professional can assist in identifying what development is needed to benefit the company most. Even the best leaders have hired an expert to help them refine their leadership capabilities. Also a trained professional who is an expert in leadership is equipped to handle an array of personnel and organizational issues, can facilitate or mediate sticky situations at all levels, does not have a personal agenda, has the education and experience, and can help with a multitude of other issues.

For information and to learn more about our leadership development, leadership models, personalized training, and coaching contact me at:

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©  Laura Perez Ehrheart | January 11, 2016

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