Knowledge Center


Article -> Investing in Leaders Delivers Returns

Date Added: November 2011

Note: This article appeared in the Nov. 2, 2011 issue of the Green Bay Press-Gazette.

Prior articles discussed leadership traits, abilities, skills and gifts. Yet, some organizations don't invest in leadership because they believe the return on investment (ROI) is uncertain.

A survey measuring leadership ROI discovered that over a 10-year period, the top 25 firms had 17% average market capitalization growth and 5% total shareholder return. The bottom 25 had a 2% decrease in market capitalization growth and 39% drop in total shareholder return. Despite this amazing leadership ROI, nearly two-thirds of organizations stated "financial limitations" as the No. 1 challenge to achieve leadership goals.

The ROI for leadership speaks for itself. CEOs from the top organizations listed leadership development as a strategic priority, concentrated on identifying and developing th enext generation of leaders, invested quality time with employees, conducted individual coaching and mentoring, and allowed employees to expand skills in a breadth of areas.

Examples demonstrating the tremondous ROI of leadership development come from a recent youth leadership conference with 10th - 12th graders. One team exercise was to walk across four two-by-fours. While it looked simple, I couldn't do it. I watched in amazement as high school leaders inter-locked arms to form a human chain across the two-by-fours -- holding and helping me get across. It was a wonderful example of teamwork and leadership, and I was humbled by these young adults who demonstrated that the team's success was greater than an individual's accomplishments.

Another example was a simple question: "What do you expect to be doing in 10 years?" The responses were intriguing. Several students mentioned they would be finishing medical school, beginning their residency; and one said she planned on opening a school for special needs children.

Then came the best leadership response from the youngest person who said, "I have no idea. I just want to be happy." Wow! Happiness is a prime leadership component. Use your gifts to make yourself, your family, your organization and your community better and happier.

Investing in leadership always has a great ROI. We don't need data to support this. Children, young adults, adults, elderly -- it doesn't matter. We can each cite examples of the leadership impact we have observed.

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