Why investing in leaders strengthens organizations

Why investing in leaders strengthens organizations

Jerame Johnson, SPHR, SHRM-SCP, THRP, MA-HRM, is a head of HR in the entertainment and gaming industry. He served 20 years in the U.S. Army in various organizations and leadership roles, including as an HR trainer at the National Training Center.

In a previous article discussing why leadership should not be treated as a sink-or-swim experience, I explored the challenges organizations face when promoting employees into leadership roles without preparing them for success. The natural next question is whether intentional leadership development produces measurable results.

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Leadership development is often treated as a discretionary investment rather than a core business strategy. Training budgets are reduced when financial pressures increase, and leadership programs are sometimes viewed as optional rather than essential. Yet research consistently shows that leadership quality has a direct impact on employee engagement, retention and organizational performance.

Gallup research shows that managers account for approximately 70% of the variance in employee engagement across teams. In other words, the quality of leadership across an organization significantly shapes the employee experience. When leadership is inconsistent or unprepared, the effects quickly appear in morale, productivity and turnover.

Many organizations invest significant resources into training employees to perform their roles more effectively. Technical and task-based training is important, but its impact can be limited if leaders lack the skills to guide, communicate with and support their teams.

Training employees improves individual performance. Training leaders improves the performance of entire teams.

Employees who understand their responsibilities can perform their work effectively. However, leaders influence the environment in which that work takes place. When leaders communicate clearly, build trust and provide direction, the benefits extend across every role in the organization.

Through years of leadership experience across different environments and organizations, and working alongside hundreds of leaders, I recognized the need for a structured leadership development framework that provides leaders with practical skills they can apply immediately. The program I developed focuses on five core pillars that reflect the responsibilities leaders face in their daily work.

Communication and Clarity

Leaders must communicate expectations, direction and priorities clearly. Many workplace challenges arise not from poor performance but from misunderstandings or unclear guidance. When leaders consistently explain the purpose behind tasks and decisions, teams operate with greater confidence and efficiency.

Task completion improves significantly when leaders demonstrate their own commitment to the direction and ensure employees share an understanding of that direction. Leaders who invite feedback from their teams often gain valuable insight while also building stronger buy-in across the organization.

Trust

Trust is foundational to effective leadership. Leaders build trust through transparency, fairness and consistency. When employees trust their leaders, they are more willing to share ideas, take ownership of their work and contribute to team success.

Building trust is often the most challenging leadership responsibility, but when it is established, teams reach levels of productivity and collaboration that many organizations struggle to achieve.

Accountability

Too often accountability is viewed only as discipline. In reality, accountability begins with clarity. Expectations must be clearly defined, understood and supported before accountability becomes fair and effective.

One leadership principle that has stayed with me throughout my career summarizes this well: Provide the standard; train people to that standard; provide the resources needed to accomplish the task to that standard; and if the standard is still not met, then hold people accountable.

When leaders follow this process, accountability becomes consistent, fair and focused on maintaining high standards rather than reacting to problems.

Performance management

Performance management focuses on helping employees grow and improve, not simply conducting an annual evaluation. Strong leaders regularly coach employees, recognize strong performance and provide constructive feedback when improvement is needed.

When feedback becomes an ongoing conversation rather than a once-a-year event, employees gain clearer opportunities to develop their skills and contribute more effectively.

Organizational awareness

Leaders must understand how their team’s work connects to the broader goals of the organization. When leaders communicate how daily tasks support or “nest” within larger strategic objectives, employees gain a stronger sense of purpose and direction.

This alignment helps ensure that teams are contributing to long-term organizational success rather than simply completing isolated tasks.

This framework created consistency across departments and provided leaders with practical tools they could use in their daily work. Rather than relying on occasional lectures, the program focused on real workplace scenarios, collaboration and skill development.

Over a three-year period following the implementation of this leadership development program, employee turnover decreased by 29 percentage points. While many factors influence retention, leadership capability plays a significant role in shaping the workplace environment. When leaders communicate clearly, address issues early and align their teams with organizational goals, employees are far more likely to remain engaged and committed to their work.

The financial impact of retention improvements can be significant. SHRM estimates that replacing an employee can cost between six and nine months of that employee’s salary when recruiting, onboarding and lost productivity are considered. When organizations reduce turnover through stronger leadership, they are not only improving culture but also protecting valuable institutional knowledge and reducing substantial replacement costs.

These outcomes align with broader workforce research. Gallup has consistently found that employees are far more likely to leave organizations because of their manager than the organization itself. Similarly, the LinkedIn Workplace Learning Report highlights that organizations investing in leadership development experience stronger engagement and higher retention.

Leadership development should not be viewed as an expense. It is an investment that strengthens culture, improves performance and reduces costly turnover.

Organizations cannot expect strong leadership to emerge by chance. Leaders require practical skills, clear expectations and opportunities to practice those skills in real situations. When organizations intentionally invest in developing their leaders, the return on that investment becomes clear.