Leaders set the tone for an organisation. When they fail to inspire, the workplace crumbles, and bigger problems arise. This is why organisations with inadequate leadership development struggle to engage their people.

In 2023, Gallup reported that only 23% of employees worldwide are engaged with their companies. At least 62% are not engaged, while 15% are actively disengaged particularly because of bad managers and a miserable job.

When bad managers run the workplace, it can lead to plummeting employee morale, skyrocketing turnover rates, decreased productivity, and a toxic organisational culture.

Hence, the impact of inadequate leadership development is far-reaching and costly.

Also Read: Why listening is the key to employee engagement

The domino effect of inadequate leadership

When managers lack the skills to effectively lead and motivate their teams, employee morale inevitably suffers. Employees who feel undervalued or micromanaged by their managers are more likely to become disengaged and dissatisfied with their work.

This disengagement can manifest in a variety of ways, including decreased productivity, increased absenteeism, and a general lack of enthusiasm for their roles. Worse, higher turnovers can happen.

While high turnover rates are a visible and quantifiable consequence of low employee morale, the impact of disengagement and dissatisfaction can be equally detrimental, albeit less obvious.

Disengaged employees are less likely to go the extra mile, contribute innovative ideas, or collaborate effectively with their colleagues. This lack of initiative and enthusiasm can create a ripple effect throughout the organisation, hindering productivity and stifling growth.

Moreover, a 2024 study published in the Harvard Business Review found that disengaged employees are more likely to spread negativity and toxicity within the workplace. This can create a hostile work environment, creating a cycle of disengagement and dissatisfaction.

Also Read: How to inspire autonomy and decision-making at work

More inefficiency and mistakes

The impact of inadequate leadership on productivity extends beyond individual employees. When managers lack the skills to effectively coordinate and align their teams, it can lead to inefficiencies and communication breakdowns throughout the organisation.

This failure rate translates to billions of dollars in wasted resources and lost opportunities for organisations worldwide. Moreover, the ripple effect of inefficiency and mistakes can extend to customer satisfaction and brand reputation.

When projects are delayed, deadlines are missed, or products and services are delivered with errors, it can erode customer trust and damage the organisation's reputation in the marketplace. In conclusion, the impact of inadequate leadership development on productivity is significant and far-reaching.

From missed deadlines and lost opportunities to inefficiencies and communication breakdowns, the consequences of poor leadership can hinder organisational performance and jeopardise long-term success.

Investing in effective leadership

The data is clear: neglecting leadership development is a costly mistake for organisations. It’s not just about losing top talent or facing a revolving door of employees; it’s about missed opportunities, stifled innovation, and a toxic culture that can permeate every corner of your business.

But what does investing in effective leadership development really look like? In modern times, it’s not a one-size-fits-all solution. It needs a more strategic, multi-faceted approach tailored to the unique needs of your organisation and its leaders.

1) Embrace the micro-moment

Bite-sized learning in the form of micro-modules, podcasts, and quick videos during breaks can be an agile way of learning for leaders who are mostly busy throughout the day. It’s about seamlessly integrating development into the workday, not disrupting it.

2) Cultivate a coaching culture

Pairing rising stars with seasoned veterans for real-world guidance and personalised feedback is a good move. It fosters a culture of mentorship between top and middle management that ensures continuity and continuous development among managers.

3) Empowering self-starters

Give your leaders access to the resources they crave – online courses, industry events, thought-leadership content. Fuel their curiosity and watch them take ownership of their growth. This will empower them to become better and hone their skills on their own.

4) Identify the gaps

Use 360-degree feedback and data-driven assessments to pinpoint individual development needs. It’s about precision targeting, not generic training programmes. When you know the gaps, you know what learning programmes you need to mount to create a more effective set of leaders.

5) Tailored development plans

Craft development plans as unique as your leaders themselves, aligning with their aspirations and the company’s strategic goals. It’s about fostering individual growth that drives collective success. This will make them feel that they are part of the company’s success journey and not just a pawn in the game.

6) Build the bench

Spot high-potential talent early and invest in their development. It’s about ensuring a strong leadership pipeline, not scrambling to fill vacancies when they arise.

7) Soft skills matter

Train your leaders to master the art of communication. Effective communication builds trust, fosters collaboration, and inspires action. Equip your leaders with the skills to connect and influence as these are the most essential parts of their leadership journey.

8) Cultivate emotional intelligence

Self-awareness, empathy, and resilience are critical in today’s workplace. It’s about leading with heart, not just head.

Effective leadership is the linchpin that holds it all together. Investing in your leaders is not merely an expense, but a strategic investment in the future of your organisation. By prioritising leadership development, you create a ripple effect of positive change.

Empowered and engaged employees become the driving force behind innovation and growth. A positive organisational culture fosters collaboration, creativity, and a shared sense of purpose. And a strong leadership pipeline ensures continuity, adaptability, and long-term success.

The path to effective leadership development may not be easy, but it is undoubtedly worthwhile. Embrace continuous learning, personalise development plans, leverage technology, and foster a culture of growth.