When companies are prosperous, they spend money more freely on things they might not normally invest in. However, in times when money is limited, they tend to manage expenses more carefully. This may lead firms to eschew operations and investments they view to be non-mission critical and conserve resources for only necessary expenditures.
For some businesses, this could mean leadership training and development. The common misconception is that key executives and managers already excel at their jobs, so training and development would provide only a marginal return on investment. However, the fact of the matter is that this misconception is false, and even the most successful organizations invest the time and effort to continually improve their leaders.
Leadership is more important in times of chaos
A survey conducted by BusinessWeek.com and Hay Group suggests that the top 20 companies in the United States continue to invest resources into the development of their leaders, regardless of economic conditions. In fact, during times of economic hardship, training and development is an even bigger priority – it's up to these key figures to navigate chaotic business climates and set the course for the organizations they lead.
“The best companies for developing leaders recognize the value of strong leadership in both the good times and the bad,” says John Larrere, who heads Hay Group's leadership and talent practice in the U.S. “Culturally they just cannot do away with leadership development, even in a recession. They don't see it as a perk but as a necessity.”
These top 20 companies believe in the continuous improvement of their leaders and try to establish it as a core part of their culture. This ensures that strong leaders will continue to be strong and sets businesses in a position to continue to enjoy success in the future, regardless of any challenges they may encounter.
This view is commonly observed among existing leaders at these businesses. A whopping 82 percent of executives and managers at companies that promote leadership development agree that their organizations are prepared for the future, compared with a slimmer 65.1 percent of respondents at companies that don't prioritize leadership.
Businesses can't forgo leadership training, no matter how rocky the economic climate gets. The moment they do that, they potentially jeopardize the future.