Why leadership coaching is an essential investment and not an optional cost
“What happens if we invest in training them and they leave?” said the pragmatic CFO when presented with a proposal for leadership development.
“What happens if we don’t invest in training them and they stay?” replied the future focused CEO
Whether you see leadership development as a cost or an investment depends a lot I think on your ability to focus on future needs rather than current challenges. If you are too absorbed with the current challenges and your profitability this year then you may wrongly - in our opinion - view this as an unnecessary cost, one that can be pushed down the line indefinitely. If however you are able to stand back from the current challenges and appreciate the need for retaining and developing your current managers into leaders to future proof your business then you will be able to see this as a worthwhile investment.
The simple difference between a cost and an investment is that a cost is a one-off expense which doesn’t provide a return whereas an investment is an on-going spend that will give you a future return. Investment wisdom suggests you should only spend money on assets which are likely to appreciate in value. So the real question to consider here is whether your current managers/leaders are investable assets?
If the answer is no or not sure, then maybe you need to rethink who is in your leadership team. If the answer is a yes or even better a ‘hell yes’ then you should have a defined budget for leadership coaching which grows each year in proportion to the overall company growth.
The logic here is that you are going to need increased leadership capacity, capability and confidence to operate the larger more complex business you want to become. This is an investment in your future, it’s you backing your plan.
There are two other related reasons to invest in leadership coaching.
Firstly it enables your star players to develop within the existing company as opposed to seeking new challenges elsewhere. They need to feel they are being developed and invested in to reassure them that they are in the right place and they will be challenged in a good way to fulfill their potential. Investing in coaching makes them realise that you recognise this potential which builds a deeper and stronger emotional bond between the company and them. If you want people to care about the company you need to first demonstrate you care about them.
Secondly it’s an investment in your future freedom as the Founder/MD/CEO as the greater the leadership capacity and capability around you the more they can take on the day to day operational leadership giving you more time and freedom to work on strategic projects and future opportunities. At some point all organisations need to transform from being founder led to leadership led if they are going to realise their potential and an investment in leadership coaching is a foundational element of a seamless transformation.
In summary the right leadership coaching is always an investment and shouldn’t be confused with operational costs. This is an investment in the future of the company, and if you choose the right partner to deliver the coaching there is a triple win available
The Company wins - increased leadership capability and capacity to cope with future demands
The Founder/MD/CEO wins - more time to work ON the business as the leaders can take more day to day accountability
The Manager/Leader wins - they learn new skills and have the support needed to realise their potential
CEO to CFO so why wouldn’t we want to invest in leadership coaching?
