The ultimate ROI of talent management & leadership development

Two weeks ago, I participated in a mentoring session with one of our mentors Jos Deslee. The question for Jos was: ‘How can I convince my management team that investing in leadership development is important, knowing that for them, costs should be, by definition, minimized’?

Jos’ answer was straightforward: ‘If you have good leaders in your company, you need fewer managers. That’s probably one of the best cost savings you can propose to your management team”.

Complete silence… that was not the answer she expected.

It made me think, and I can confirm that Jos was right.

When companies grow, they often create more management layers, meaning they have to appoint more so-called middle managers. Hiring these profiles is expensive. On the one hand, there is their salary (the typical middle manager has a minimum of 10 to 15 years of experience and is often locked in a so-called golden cage, so if you want the good ones, you have to offer them a very competitive salary). On the other hand, there is the recruitment and training/onboarding cost.

The reasoning behind this is the following: when we grow, we need to delegate more tasks from top to bottom (so far, the logic is correct), and therefore, we need more ‘middle managers’ to control the ‘bottom’ is doing. This is where it goes wrong.

So basically, we end up with an organization with a large and expensive layer of middle managers whose main task is to control the level(s) below.

Without a decent leadership development program, these middle managers will behave as real ‘managers’ because they don’t know better:

• Plan and organize the work of the levels below
• Command what others have to do
• Control how they do it to make sure they do things right
• Make sure everyone below them follows the rules

Plus, they spend a lot of their time in useless meetings.

Even worse, the chances are high that their ego grows after a while. Consequently, they get engaged in all kinds of political (and toxic) games with only one purpose: protecting their power (and the status quo) and keeping their golden cage locked.

You don’t want to calculate the ROI of these middle managers…

The question is: how to boost the ROI of these expensive middle managers?

The answer is simple:

1. Don't fall into the trap that every manager should become a leader. At least half of your middle management population does not have the competencies to transform into a leader.
2. Select those with natural leadership potential and give them a decent leadership development program.
3. Identify those who are better of as experts and give them a position where they can build on their technical expertise and keep them away from people management.

The ROI will be significant:

1. The number of 'middle managers' (read: leaders) you need to keep the company running drops drastically.
2. The technical expertise to safeguard your company's future is more leveraged.
3. PLUS, leaders are much better at empowering people, encouraging them to take full ownership, making them accountable for their goals, and motivating them to find ways to reach them.

Result: the three groups (the leaders, those coached by the leaders, and the experts) are more motivated, less frustrated, and more engaged and, consequently, perform better

I don't think you need an advanced degree in math to know that their ROI will increase significantly.

A solid internal mentoring program combined with external mentoring is the ultimate way to turn your managers into real leaders.

Mentoring means learning from other experienced leaders in a practical, hands-on way to impact behavior directly. Mentoring is based on a trust-based sounding board relationship whereby the mentor’s primary motivation is to make the mentee grow.

Ambits helps build internal mentoring programs (from process to methodology, tooling, and training) and offers external mentors with a proven leadership track record for individual and group mentoring.