The Bottom-line Value of Investing in Leadership Development
Thoughts on the Model
Often we hear resistance to suggestions of investing in leadership development, particularly at the most senior level. Yet, we know that poor leadership has a negative effect on the bottom line: low engagement, high staff turnover, and lack of commitment being just three areas (although it’s not always easy to ‘line item’ the impact).
So, what if we could identify bottom-line dollar value returns that are directly related to leadership development? Of course, the size of the organization is relevant to any dollar benefit achieved, but even small increases are important.
Most organizations, regardless of size, would be pleased to achieve savings of $30,000, or even $20,000. What if that was a monthly saving? What if it was ongoing?
In my Leadership Challenge Workshops, I have a post-workshop process that involves bringing participants together in triads. Everyone self-selects into groups of three. Each triad is then asked to connect every two weeks following the workshop. Among the values of doing this is group coaching, accountability, and the opportunity to share successes.
Specifically, I ask them to discuss in each session examples of where they have Challenged the Process—to not only share examples but also to document what they have done and the savings or benefits generated for the organization. Quite simply, if one person comes up with a better way of doing something, changing a procedure or process for a better result, there’s a very good chance that others will be able to make the same or similar change in their organization, division or team.
One such outcome shared by a triad participant involved the use of printers in the organization’s Finance Department. Where the staff had individual printers, the suggested change was to have one, centralized printer servicing the needs of all the team.
“You’re going to take my printer away? No!”
Of course, there was resistance but the change went through. Dubbed the Print Management Solution, it led to an upgrade to the latest model printer (at no cost), reduced print costs overall, and improved efficiencies. For the Finance Department, it saw an annual saving of around $5,000. When adopted throughout the company, the saving was closer to $50,000.
Quite a good result for this organization. It’s also an example which demonstrates that when we embed the Practice of Challenge the Process into a culture—a mindset throughout the team, the business unit, and the organization of “Is there a better way? How can we do it better?”—amazing things can happen. And there are opportunities for savings to be made.
Another example of how Challenge the Process can spark cost-saving changes comes from a post-workshop conversation I had with a participant named Ravi.
I make it a practice, as far as I can, to follow-up with participants on what has happened since their workshop experience, to talk about the changes that have taken place, and to explore other ways to take their development further. During one such conversation, I asked Ravi what he did.
“I make water.” Clever man.
Ravi is responsible for overseeing the production of a high-volume consumable product: bottled water. And as part of his follow-through with the other members of his triad, he took up the task of challenging his team to look for improvements in the production line operations. He began by focusing on the line producing the five-gallon bottles of water; the first of the changes he implemented reduced the shift change-over time from two hours to one hour. That’s a time saving that happens every day—involving 30 people. This results in an increase of 30 hours of productivity each day; 150 hours each week.
In addition, because of the increased productivity that resulted from that initial change, Ravi was able to discontinue the first-day-of-the-weekend shift that had been required for a long time—all while maintaining output to meet production requirements and adding even more savings by eliminating weekend overtime.
When I asked Ravi how the team members felt now that their overtime pay had been cut?
“They love it! More time with their families!”
With improvements in their production processes, Ravi and his team were able to increase production by over 1 million 5-gallon bottles per year—at no extra cost. That extra production, he tells me, translates to around $3 million in profit per year. Annually. Ongoing. And that was only one production line! Now these changes have been implemented in this same plant on the other three lines that produce smaller bottles of water. Ravi estimates the company is looking at a further $2 million profit.
And there’s more to come. Ravi also oversees production on a number of additional production lines in other plants that will ultimately benefit from the improved production processes. In addition, all of the teams throughout the region will be encouraged to look for even more changes as they Challenge the Process.
One of the more positive outcomes (OK, I know profit is important) of Ravi’s strong leadership is the ownership everyone feels for what has been achieved. From the cleaners on the production floor to the team leaders and managers, team members throughout the company are happy, engaged, committed—as Challenge the Process is now embedded in the culture.
For this company and, I suggest, most others, this is what success looks like: increasing bottom line results and increasing staff engagement.
So, why wouldn't organizations invest in leadership development? Only if they didn’t want to be successful.
Graham Moore is the first Certified Master of The Leadership Challenge in the Middle East. Originally from Australia and now based in Dubai, UAE, Graham has 20+ years of experience as a facilitator and has presented The Leadership Challenge® in 15 countries around the world. Graham can be reached at Graham@MooreSuccessME.com.