Business Impact of Leadership Development

April 05, 2012  |   Coaching Latest News   |     |   0 Comment

In February 2012 Penna and the Chartered Institute of Management produced their findings from a survey on the business impact of management and leadership development (MLD)



This survey included the views of 4496 managers, including 302 CEOs, from a wide range of business sectors and organisations. The survey looked at the impact of MLD on three measures: business performance, people performance (e.g. levels of engagement) and organisational performance. The responses received were split into those from high and low performing organisations.


The Proportion of Ineffective Line Managers


One finding that really does reinforce the importance of effective leadership development is the percentage of respondents who reported that they had an ineffective line manager. Overall 43% of the managers responding felt that their line manager was ineffective. However there was a marked difference in this figure between low and high performing organisations. In the low performing organisations only 39% felt that there line manage was effective, whereas in high performing organisations this figure rose to 80%.


Methods of Leadership Development


Organisations reported that they used around 26 specific tools for MLD. These ranged between internal and external courses, business education and coaching.


Most Effective Leadership Development


  • Postgraduate business education such as MBA’s were identified as the most effective development vehicle
  • In the top 5 methods courses and coaching by external providers were included
  • Many senior managers wished they had been provided with coaching earlier in their career


Levels of Investment in Leadership Development


  • The average spend on MLD for managers was £1414 per annum
  • The level of spend in high performing organisations was 30% higher than in low performing organisations (£1738 versus £1275 per manager per annum)


Impact of Leadership Development


  • The survey found that the level of commitment shown by the CEO and senior team to MLD accounted for 21% of the difference in the people performance measures used in the survey
  • There was a clear link between employee engagement and MLD activity. This was driven by the effectiveness of the line manager combined with the amount and effectiveness of MLD and career development. This is an important finding given the increasing number of studies showing a correlation between business performance measures and employee engagement
  • 23% of the difference in organisational performance was related to 3 factors; the link between business and HR strategy, the commitment to MLD from the CEO and the effectiveness of HR practices


For the full version of the survey use this link

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