The Importance of Developing Leadership Skills in an Ever-Changing Workplace

Today’s organizations constantly find themselves trying to keep up with rapid evolution within the workplace, primarily due to Industry 4.0 or the Fourth Industrial Revolution. This fundamental shift is characterized by increasing automation, the rise of smart machines and factories, and the use of data and new technology to manufacture and distribute goods more efficiently and productively.¹

Leadership development plays a critical role in adapting to this dynamism, helping leaders to make faster decisions and successfully navigating crises like COVID-19.² For this reason, it’s a key priority for many corporate HR departments.³

However, in a survey of more than 750 learning and development professionals, almost half the respondents significantly decreased spending on leadership development in 2020, although more organizations offered programs to develop leadership character. Moreover, the same survey showed that there’s been little improvement in the impact of leadership development on critical business goals.⁴

The infographic below examines 13 problematic leadership development statistics:

The importance of leadership training

In today’s competitive economy, where human capital is scarcer than financial capital, a business’ competitive advantage lies in its ability to manage and allocate its talent. Good leaders will:¹⁹

• Define the roles that are critical to creating value for the company moving forward, and then assess the skills, attributes, knowledge, and experience of existing talent
• Identify the critical skills needed for multiple potential future contingencies to plan skills development accordingly
• Adopt new ways of attracting and sourcing talent in line with contemporary technological developments and workforce expectations²⁰

1. Leadership development drives a new leadership structure

Driven by increasing digitalization, connectivity, automation, lower transaction costs, and demographic shifts, the company structure that’s evolving today resembles a thriving ecosystem rather than the bureaucratic business construction of previous generations. Companies are adopting flatter leadership structures and operating models that enable agility and simplicity.²¹

In order to succeed, today’s business leaders must understand how and when to delegate effectively. Delegating tasks can empower employees to come up with creative solutions, grow beyond their present positions, and feel more satisfied at work. This also gives leaders the opportunity to focus on developing and growing their businesses.²²

2. Leadership development creates skilled, empowered leaders

The prevailing logic for supervisor training is to teach managerial skills – planning, budgeting, reporting, and task assignment – first, and then leadership skills later. Unfortunately, this often results in new supervisors being ill-equipped for tasks that require real direction, and an overall lack of sufficient organizational leadership.²³

Updating the way leaders work to be more in keeping with Industry 4.0 translates into a shift in leadership’s thinking from siloed or “hero” leadership, where only one person makes all the decisions and everyone follows, to an approach where colleagues from various functions, departments, and roles work collaboratively. In this context, leaders coach rather than command, and encourage innovation instead of simply overseeing execution.²⁴

3. Improved leadership skills lead to greater innovation

To bring transformation and innovation to their businesses, successful Industry 4.0 leaders are moving from managing unchanging teams to building diverse, international, and agile ones linked to projects rather than static responsibilities. Here, leadership is less about expecting respect for authority and more about motivating and guiding through influence. These leaders focus on building an environment of trust where people feel confident sharing ideas and taking risks.²⁵

Today’s best leaders also recognize the value of supporting employees in their personal lives. According to a Gartner survey, this sort of support results in 23 and 17 percent more employees reporting improved mental and physical health respectively, leading to a 21 percent rise in the number of high-performing staff.²⁶

The benefits of leadership development

Many organizations run leadership development programs to develop employees with potential so they can take on senior leadership positions.²⁷ It’s key for companies to design leadership development programs with their specific business objectives in mind, imparting the necessary skills to help achieve these.²⁸

The benefits of establishing a development program to grow leadership skills include:

Better financial performance

The development of leadership is immediately evident in several aspects directly affecting the bottom line. Companies can enhance their returns fivefold by developing people capable of improving customer satisfaction, exploring new revenue streams, and reducing costs.²⁹

Attracting and retaining talent

Leadership development programs provide a way for employees to grow within a company rather than move elsewhere to fulfill their desires for growth. Prioritizing these programs represent a commitment to developing high-performing employees, giving them a reason to commit their time and career to the organization.³⁰

While investing in leadership development might seem like an extra expense, it has the potential to demonstrate a return on investment of up to six times the program cost. Moreover, it can help improve workplace relationships by 77 percent and employee satisfaction by 51 percent.³¹

Training provider Lorman found that 70 percent of employees would move to a company that invested in learning and development, while 86 percent of millennials said they would stay with their employer if these programs were offered. A strong culture of learning can also increase employee retention rates by 30 to 50 percent.³²

Improved company culture

While most business leaders agree that a healthy company culture builds employee engagement, almost half of employees believe their companies’ leadership isn’t committed to improving their culture. One of the consequences of this disconnect is a higher staff turnover.

In order to build successful organizations, today’s leaders need to recognize not just how to create a positive company culture themselves, but also how to empower their staff to do so.³³

Better customer retention

Leadership’s ability to motivate, mentor, and inspire has a significant impact on the service provided by customer-facing teams as well as the level of perceived value. Companies that focus on developing their leaders and other staff members, particularly in terms of client relationships, can create a customer-centric culture that drives retention and repeat business.³⁴

Increased agility and ability to adapt to change

Change is integral to improvement. Therefore, a commitment to transformation should be part of any company’s corporate culture.³⁵ A study found that 86 percent of companies with formal leadership development programs are able to respond rapidly to changing market conditions. In turn, only 52 percent of companies with less mature leadership programs are able to do this. Moreover, 65 percent of companies with mature development programs see improved business results, compared to six percent of businesses that don’t have these programs.³⁶

As Industry 4.0 continues to take center stage in today’s workplace, it’s time for organizations to evaluate how their teams and technology can work together to add value and achieve business goals. Investing in strong leaders through leadership development programs drives innovation and improves financial performance, both of which are vital in navigating the evolving business world of Industry 4.0.³⁷

If you recognize the importance of leadership skills, consider enrolling staff members in the Oxford Executive Leadership Programme offered by Saïd Business School, University of Oxford. This eight-week programme explores core leadership themes, including power and influence, motivation, authenticity and adaptability, change, complexity, and diversity. In addition, it helps participants to reflect critically on their leadership approach through practical insights and tools. Find out what past participants had to say here. Oxford Saïd also offers various other online programmes that might interest you.

Similarly, the Leadership Development Program from the University of Dayton uses a holistic approach to help leaders become self-aware, confident team players, and organizational influencers. Over the course of eight weeks, participants will develop their people management skills, focusing on practical communication and collaboration, and effective team leadership.

The London School of Economics and Political Science also offers a Leadership and Change online certificate course, which is designed to equip business leaders with the tools and expertise to survive, grow, and thrive in times of transformation. This eight-week course helps participants to develop their authentic leadership strengths and gain the expertise to create coaching plans that apply widely accepted principles and models for professional development.

Boost your team’s leadership and interpersonal skills with a range of online courses