Why Leadership Development at all Levels is Important for Business Success
In today’s ever‑shifting business landscape, from post‑pandemic recovery to rapid AI disruptions and global economic uncertainty, some teams succeed in the chaos while others fail. What makes the difference? One key factor: skilled and well‑supported leadership at every level. Yet when budgets tighten, leadership training and development seem to be at the top of the list to get the axe.
That’s the exact moment when investment in leadership becomes most critical.
The Business Case for Leadership Training
1. Managerial Engagement Drives Team Outcomes
Gallup’s State of the Global Workplace (2025) study found that 70% of the variance in team engagement is attributable to the manager, meaning leadership quality directly shapes engagement and productivity. A team with a disengaged leader will not succeed. A team with a leader with poor leadership skills will not flourish. Concerningly, Gallop found that average global employee engagement dropped from 2023 to 2024. Most critically, manager engagement fell from 30% to 27%, particularly among managers under 35 and female managers whose engagement dropped by 5 and 7 percentage points respectively. With employee engagement being a major factor in performance, this trend manifests in preventable financial loss.
2. Training Makes a Large, Measurable Difference
Less than 44% of managers worldwide report receiving formal management training. Those who do receive leadership training are 50% less likely to be disengaged. Managers trained in leadership and coaching practices experience performance improvements of 28%, and their teams show up to 18% higher engagement, with effects still detectable nine to eighteen months after training. Still want to cut that training budget?
3. Sustained Development Boosts Well‑Being and Thriving
Training alone raises manager “thriving” levels from 28% to 34%. Pairing training with ongoing coaching and mentoring pushes that number up to 50%. The investment in an on-going programmatic approach therefore is critical. One-off training seminars are a good start but won’t make or sustain the difference needed!
4. Engagement Results in Economic Value
Boosting management engagement cascades to stimulate employee engagement and generates results. Gallup estimates that if global engagement matched that of best‑practice organizations—around 70% engagement—the world economy could gain up to $9.6 trillion or 9% of global GDP. This isn’t theoretical—it’s grounded in real measurement across countries, industries, and cultures.
How Leadership Training Delivers Business Outcomes
A. Strategic Alignment & Focused Resources
When leaders learn how to translate strategy into everyday decisions—and consistently communicate clear priorities—resource deployment becomes more effective. Teams stay aligned, costs are optimized, and execution accelerates.
B. Faster, Empowered Decision-Making
Trained leaders bring clarity to organizational values and priorities, which builds trust and empowerment. Teams no longer wait for sign-off on decisions, they act with confidence and speed trusting that they are acting as their leaders would, according to the values and priorities. This empowerment delivers value sooner. Speed is often a prerequisite for success in a competitive environment and trained / supported leaders nurture trust and empowerment to make that speed possible.
C. Adaptability in Times of Disruption
The modern environment sees frequent step‑change disruptions like the AI rollout and economic policy shocks. Gallup’s data shows that organizations without empowered and trained managers struggle, and adaptability must be built in through skill-based development. More resilient leaders help their team recover from shocks faster and refocus on what is needed to create success under the new conditions.
D. Employee Engagement & Reduced Turnover
Manager behaviors matter. Gallup’s 2025 data shows that managers account for 70% of the variance in team engagement. Meanwhile, research into employee retention shows leadership behaviors—like recognition, empathy, and individual support—are predictive of lower turnover. Providing training and ongoing coaching will enhance management deployment of these skills. Improved employee engagement and reduced turnover have immediate positive effects on the bottom line.
Avoiding a Dangerous Mistake: Cutting T&D Budgets
Leadership and management training and development budgets are often the first sacrificed when times get tight – but this is akin to walking the plank over shark infested waters! Gallup’s findings indicate this approach is exactly backward. Organizations that let manager support slip face cascading disengagement, reduced productivity, and higher turnover. Worst of all: this erosion of leadership readiness is precisely what undermines resilience during disruption. When the chips are down might just be the perfect time to invest in training – in fact it may be imperative for stopping a downward spiral.
Measuring Progress of Your Training and Development Plan
While the general business case for leadership training and development programs at all levels is solid, the astute executive will certainly want specifics before agreeing to the cost of such a program in their specific world. Questions that might be relevant are;
How will I know if leadership T&D delivers results in my organization and how can I measure progress?
Ultimately you will be looking for measurable business results - else why bother? Are Organizational KPI’s being achieved? Are we accelerating our progress against our KPI’s? Are we doing better than we previously were doing against our competitors or industry benchmarks? As in any business it will be impossible to hold every other variable constant so that you can objectively measure the direct effect on results of just the T&D program, so clearly some interpretation will always be needed.
Both managerial and employee engagement can be measured via established survey tools and compared to a baseline. While surveys are by no means fool-proof and often are a reflection of current events, if the step changes needed are large, then the movement should be measurable and not unduly manipulated by other variables. Surveys can be conducted on as frequent a basis as needed. Many firms will do surveys annually to track progress of different teams and categories of employees. Some organizations will survey smaller, random selections of their employee population on a more frequent basis - such as quarterly. Keep in mind that key engagement factors, such as building trust, do not happen overnight - they are the result of many experiences over time.
Engagement fuels productivity as well as employee retention. These are easily measured in many functional areas such as production, distribution, quality, customer service, or sales. Results can also be reviewed at a high level - such as revenue per employee or EBITDA per employee. When reviewing employee turnover data to determine retention, include both voluntary as well as involuntary turn. Involuntary turn often has its roots in poor leadership behavior resulting in disenchantment of workers, who then cease to ‘show up’ - both physically and mentally. Poor attendance results stem from the cancer of poor leadership skills deployment.
How long will it take before I can see the results of a concerted Leadership T&D program?
Short term (3-6 months): Improvements in morale, managerial confidence, and the quality of communication should be evident. These are difficult to measure objectively and may be more anecdotal but should be apparent. Measurable improvements should start in terms of productivity and reduced preventable errors - such as safety incidents, production defects, or complaints - particularly if the training and development program is part of a well-communicated change program for continuous improvement or engagement. Up-front communication of a coordinated program at all levels often gives employees an emotional boost that positive change is coming, and so long as that hope is reinforced with observable changes, the program will get a jump start.
Medium Term (6-12 months): Reduced employee turnover should be evident as the engagement scores also start to move. Managers will be demonstrating more initiative and empowering their teams to a greater degree. Advanced in the metrics mentioned above should accelerate.
Long Term (12-18 months+): Expect to see sustainable advances in productivity, employee retention, and a stronger internal pipeline of talent available for succession plans.
Are there benchmarks or real-world case studies that demonstrate an ROI?
Gallup reported in their State of the American Manager, that teams with highly engaged managers had:
27% higher profitability
20% higher sales
17% higher productivity
40% lower turnover
Development Dimensions International – Global Leadership Forecast 2023 reported that Organizations that invest in leadership development are:
2.4x more likely to outperform financially
5.4x more likely to have strong leadership bench strength
Personal experience supports that comprehensive training delivers measurable results in the above timeframe.
A global chemicals company rolled out a coordinated program of leadership skills workshops and follow-up reinforcement. Leadership attributed changes in the company culture and measurable gains in safety and productivity to the execution of this program.
What makes this approach different from training programs of the past that didn’t seem to move the needle?
Many past development programs;
Were one-time events. While an event may temporarily move the needle, it will not have a lasting impact or build any ‘continuous improvement’ type of momentum. One-time events do not develop or sustain a talent pipeline. Keep in mind though that the level of investment does not need to be constant - it can, and should, ebb and flow. Perhaps the budget needs to be initially high to get over the hump on some unifying training workshops and surveys. After that, the investment may reduce to fund ongoing refresher activities, training for new employees, on-going coaching activities, and data collection.
Were focused on one-level of management or leaders - or one group of employees. Investing just at the executive level will certainly help, but it will take a long time for the skills and techniques to cascade through the organization. The momentum will fizzle long before the effect can be felt broadly. Similarly, focusing on just an arbitrary group ordained as “high potential” employees will not move the needle either as the impact will be limited to those employees with which this group interacts. Further, it may dis-engage other employees who see their peers being sent to special training camps and getting privileged attention while they get neither.
The elements of an effective Leadership T&D program to ensure success are that it must be sustainable over the long haul and must be broad based to align vision, priorities, objectives, language, and techniques across the organization.
Key Takeaways
Putting all of this together, to create a best-in-class leadership team that is
fully engaged,
can deliver a competitive advantage,
and be resilient in times of change in the business environment,
we need a well-coordinated system of leadership development at all levels in the organization.
The optimal program will not be a one-time skills development workshop, but rather an ongoing strategically designed combination of skills workshops, coaching, support, team building, and experiential assignments. The elements of the program will necessarily vary between organizational levels, however the development of every leadership level in the organization is critical to performance and adaptability.
Best in class firms have employee engagement levels of 70% and demonstrate high performance and resilience to change. This can best be achieved with a focus on systematic and ongoing leadership training and development.
Ready to become a better people leader?
Take a free and quick leadership assessment to measure your demonstrated leadership skills. Uncover insights for you to lead your team to improved performance, address challenges, and ultimately grow in your career!
