‘All successful organisations and businesses need effective leaders. The leadership of effective and well trained leaders is paramount to providing an agreed upon goal for the company’s success. Leaders are invaluable when it comes to formulating and communicating new strategic directions, as well as communicating with and motivating employees to increase dedication to organizational goals. Ongoing leadership skills training is essential to making sure that leaders are on the right track.’

(The CEO Institute, 2021)

 

Why is it important?

Leadership development has long been seen as important, although its contribution to business success is not always easy to identify.

In 2012, the Department for Business, Innovation and Skills proposed the case for investment in leadership and management skills to help the UK achieve sustainable economic prosperity and growth and to address the UK’s apparent lack of competitiveness when compared to its international competitors.

Strong leadership and management was found to be a key factor in fostering innovation, unlocking the potential of the workforce, ensuring organisations have the right strategies to drive productivity and growth, and ”There is no question that good leadership and management can have a truly significant impact on organisational performance, both in the immediate and longer term.”

The facts are:

• Best-practice management development can result in a 23% increase in organisational performance
• Effective management can significantly improve levels of employee engagement
• A single point improvement in management practices (rated on a five-point scale) is comparable to a 25% increase in the labour force or a 65% percent increase in invested capital.

Department for Business, Innovation and Skills (2012)

 

How has leadership been impacted by Covid-19?

Research still consistently demonstrates that investment in leadership development brings significant business benefits.

In its review of the literature in 2016, the Center for Creative Leadership identified four areas in which investment in leadership development creates a competitive advantage for the organisation:

• Improve Bottom-Line Financial Performance
• Attract and Retain Talent
• Drive Strategy Execution
• Increase Success in Navigating Change

Center for Creative Leadership (2016)
 

The Covid-19 pandemic has escalated the need for leadership and management development, as organisations realise that to survive and prosper in today’s volatile, uncertain, complex, and ambiguous (VUCA) environment they not only need leadership skills - they need leadership skills that are different from those that have proved successful in the past, and they need to move even further away from the ‘command and control’ management hierarchies to embrace leadership development everywhere in the organisation.

The traditional leadership skills are no less important, but there are new leadership priorities:

“Sixty percent of the executives in the 2021 Deloitte Global Human Capital Trends survey said that leadership was important to prepare for unknown futures—the top-ranked priority for supporting preparedness. And while much of leadership has historically been about setting direction and ensuring compliance, now effective leadership is shifting to preparing for the unpredictable by coaching, teaming, and fostering workers’ ability to learn and adapt.”

Deloitte Insights (2021)

The survey also highlights that leadership is the top factor in driving change and is critical in bringing out human potential.

 

The ‘New’ leadership priorities.

The so-called ‘soft skills’ of leadership have gained a new importance through Covid-19, and have possibly changed leadership for the foreseeable future:   

“Major research conducted among 1,711 CEMS alumni and Corporate Partners in Summer 2020 found that for 87% of respondents, Covid-19 has profoundly affected their business and teams. A quarter believes these changes will be permanent. There has been a dramatic increase in the importance [of] resilience and empathy as leadership qualities and a correlating nosedive in the importance of traditional leadership authority and technical skills.”

(CEMS, 2020)

With this change in focus, leaders are having to come to terms with looking after and maintaining both their own mental health and well-being and that of their employees.

 

What’s next?

Embed this ‘new’ style of leadership throughout your organisation, and start to realise the benefits on the bottom line. From young aspiring leaders to senior management teams, leadership is for everyone. So, get on board and embrace this new way of working today.

 

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Bibliography:

• CEMS (2020). Leadership in a Post-Covid-19 World © 2020 CEMS All rights reserved

• Center for Creative Leadership (2016). Driving Performance: How Leadership Development Powers Sustained Success Center for Creative Leadership®

• Deloitte.Insights (2021). The social enterprise in a world disrupted: Leading the shift from survive to thrive Deloitte.Insights

• Department for Business, Innovation and Skills (2012). Leadership & Management in the UK – The Key To Sustainable Growth: A summary of the evidence for the value of investing in leadership and management development © Crown copyright 2012

• The CEO Institute (2021). Business Leadership - Is It Important? The Importance of Business Leadership | The CEO Institute