Retention. Cost savings. Engagement. Need any other reasons to enlist a development program?

By Kyle Lagunas
Almost three years ago, Neil Nicoll, president and CEO of YMCA said in Finding Leaders for America’s Nonprofits: Commentaries, “Until [we] become much more intentional about development of internal talent, we are doomed to an ever-growing leadership deficit.” And yet, while many organizations are recruiting leaders from competitors as cost per hire only rises, few are doing much to develop the talent they already have into the leaders they need.
Here’s what’s confusing: Why is the process of finding a leader often treated as an isolated event rather than an ongoing process? One would think more organizations would be proactive in identifying and cultivating leaders within their existing talent pool. While some companies have begun taking measures to that end, the leadership deficit Nicoll predicted has largely become a reality.
A change needs to occur in the way companies are sourcing leadership talent. Rather than look outward when a leader is needed, they should instead identify candidates in their own workforce with leadership aptitude and invest in honing their skills with development programs. Here are reasons to enlist a leadership development program.
1. Boost employee engagement and morale. Employee engagement continues to gain weight as a key performance indicator for an organization’s success. However, a study conducted by ACCOR found that although 90 percent of leaders say employee engagement impacts business success, 75 percent have no engagement plan or strategy. To that end, development programs give employees the opportunity to strive toward something more meaningful and valuable than their day-to-day work. And that makes them happy.
While development programs are proven to boost both engagement and morale, the success of the program is contingent on alignment with business goals. “It’s not about the volume of training as much as it is the caliber,” says Larry Gregory, VP of strategy and marketing for the DeSai Group. “Your leadership program must be able to catalyze business results from their development program.”
Leadership development is serious stuff. It takes time and dedication to make it work. If you’re going to adopt an official leadership development program, be sure to first identify your goals for the program.

2. Increase employee performance. It’s hard to deny a linkage between development and performance. As John Robak, executive vice president and chief operating officer at Greeley and Hansen, attests, “Those individuals in our organization who are inspired tend to outperform. That’s because the more well-rounded you are, the better you’re able to perform.”
When you’re teaching people how to manage and coach, you’re providing them with ways to motivate the people around them. “They learn how to identify potential and inspire people to reach their max,” says Beth Miller, Vistage Chair. “And for leaders to invest time and energy in them, it communicates a real value of getting their employees to their maximum potential.”
Makes sense, right? The companies outperforming you certainly think so. In fact, the highest performing organizations spend 36 percent more on development than their less successful counterparts. As Miller notes, “The ones that are doing this effectively understand what their future needs are going to be, and understand how to engage their potentials and give them the opportunity to develop the skills that they need to succeed in the operation.”
3. Improve retention rates. Many organizations see investments in employee development—leadership development, in particular—as a gamble. If the employee leaves, those investments walk out the door and potentially into the hands of a competitor. While turnover is a valid concern, leadership development and opportunities are actually a leading retention strategy.
“Gen Y tends to be more fluid and move more frequently, which can be intimidating for employers worried about turnover. We see the exact opposite,” says Robak.
When organizations hemorrhage top performers, it’s rarely because they’ve invested too much in developing them. “For staff with high-growth potential, it’s easier than ever for them to see what your competitors are doing,” warns Gregory. “If you’re not giving them a chance to innovate and do more, they’re going to look elsewhere.”
It Is Possible
Good leadership development isn’t about which products, services, or organizations you use to build up your programs. It’s about creating meaningful work and experiences that develop skills your employees need to succeed as managers and directors while developing a pool of leadership candidates within your organization. It’s a win-win.
With a little creativity, you can do this without breaking the bank. That’s precisely what Lisa King, executive director at Open Arms Care Corporation, set out to do in her nonprofit organization. King believes learning and development is a career-long commitment, and that all members of management must seek a “continuous learning and development philosophy while employed at OAC.” That’s why she requires leaders to renew their leadership qualifications each year.
Miller gave a nice overview of the program on her Executive Velocity Leadership Blog, but here are some highlights:

Leaders must earn a certain number of leadership credit hours annually.
• Assistant managers and coordinators are required 20 credit hours;
• Leaders are required 30 credit hours; and
• Directors are required 50 credit hours.
The program has six development categories, in which leaders can earn credit hours:
• Continuing education and personal development
(books, courses, seminars)
• Instruction (training others in leadership competencies)
• On-the-job experience
• Research and publishing
• Leadership (participating in leadership roles in the community)
• Professional membership (participating in leadership groups
like Vistage)
By allowing leaders at every level to earn credits in a variety of ways, many of which don’t require any time or money from the organization, King encourages them to take control of their development—both in and out of work. “This is good because it requires employees to document and keep up with their own training,” says Miller. “Employees who have ownership for their training generally retain more of what they learn during the process.”
Seminars and workshops where leadership potentials are submerged in training are also valuable, but can be expensive. If you can’t afford to send every high potential employee off to a training seminar, inject some gamification into the process. Buy one pass, and have them compete for it.
As Roback points out, “In the absence of feedback, people tend to create their own.” Whatever decision is made, whether it’s a promotion from within or an external hire, it’s critical to communicate the why. Robak goes on to say that, “We don’t just want our message to be heard, we want to ensure it’s received.” Otherwise, all of your best intentions are for naught.
Kyle Lagunas is HR analyst at Software Advice, a company that reviews human resources software and reports on technology, trends, and best practices. He can be reached at Follow his blog ( and twitter feed (@KyleLagunas).

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