Leadership Learning: The Real Costs Of Not Doing Leadership Training

A report from the Said Business School at Oxford University in the UK found that British businesses and public sector organizations are wasting almost $140 million on executive education programs that are poorly conceived and delivered.

The study went on to say that 35 per cent of HR directors and 21 per cent of other executives believed that their current training and development programs were meeting corporate strategic objectives. The bulk of the money was being spent on individually developed courses for senior executives.

If those businesses want to quit wasting all that money on bad management training, I know where they can get their moneys worth. And it doesn’t have anything to do with having more academics design special courses, events, and outings for senior staff.

Here’s a novel idea folks. Why not spend your money on leadership training and development down in the trenches, where it will really do some good?

Most companies don’t do nearly enough of that. In 2003, just 7 percent of training budgets in the US were spent on first line leaders and most of that was for learning administrivia and for prophylactic HR.

The fact is that front line leaders don’t get much training at all and precious little of it is actually about leadership skills. Maybe that’s because companies think they’re saving money by not investing in front line leader training.

True, there’s no budget line item absorbing funds that might be spent on the executive dining room, or art for the CEO’s office. But there are what economists call “opportunity costs,” the costs of not training front line leaders.

There’s the opportunity cost of lost productivity. Good frontline leadership builds both morale and profitability.

There’s the opportunity cost of lost leadership. Great companies develop most of their own leaders. If you have to go outside for leadership you incur recruitment costs and transition costs.

Finally, there’s the cost of lawsuits. Good frontline leadership creates organizations where lawsuits are less likely. And, ff the company is sued over a supervision issue, defense will be easier if the leaders have been doing their jobs.

How about your company? Do you develop your own leaders? Do you help them develop the skills they need to improve morale and productivity and avoid lawsuits? Think about that the next time you consider the training budget.