Leadership Note #8: What does your business get back from developing its people?

I know that developing your people can deliver a real return for your business: better performance, stronger engagement and higher productivity. I want to show you how that connection works and how to make the case for investing in it.

Let me start with an admission. Early in my career, my confidence in development came largely from seeing it work. I’d watched people improve, managers become better leaders and teams become more effective. But I hadn’t explored the research deeply enough to explain how those changes translated into commercial results.

A conversation with Thinqi on Friday got me thinking and sent me back to that research. It stayed with me over the weekend and prompted me to dig a little deeper into the research. The team there are doing some excellent BTW and deserve a shoutout for their work helping businesses think more clearly about the value and impact of L&D. Thanks Steve Finch for giving me plenty to think about over the weekend and inspiration for this article. 

Let me start by drawing on some recent experinence, my time at Wilby Jones reinforced this for me. Professional development was part of how we worked (and how they still work) and I saw the difference that made. Last year, the business won Employer of the Year. Development was part of a much wider commitment to creating a place where people could do well.

There is a useful lesson here for anyone trying to secure investment in their people.

There are two connected ways development creates value.

The first is capability. People become better equipped to do their jobs.

A manager learns to delegate properly. A team leader addresses a performance issue. Someone gains the confidence and skill to make a decision without passing everything upwards.

The second is engagement. Having opportunities to grow, feeling more capable and experiencing better leadership can change how people feel about their work and what they are willing to contribute.

Gallup examined management development across 17 studies involving more than 14,000 participants and 2,354 teams. Nine to 18 months after development it found that managers who had received the training had:

1. 10 to 22% higher engagement themselves

2. 8 to18% higher engagement among their teams.

3. 21 to 28% lower turnover.

4. A 20 to 28% greater likelihood of performance improvement.

Those results were relative to the comparison groups in the study. The development these companies implimented focused on practical management behaviours, including coaching, setting expectations and having meaningful conversations.

I know that developing one manager can change the experience and effectiveness of everyone they lead, its certainly a strategy I've employed. 

Separate Gallup research helps explain why engagement deserves attention. Its 2024 meta-analysis found that business units in the top quarter for engagement had 23% higher profitability, 18% higher sales productivity and 14% higher production productivity than those in the bottom quarter.

That doesn’t mean a development programme will automatically increase your profits by 23%. It does give us a strong reason to take the relationship between leadership, engagement and business performance seriously.

So how do we turn that into a better business case?

At CAKE, our proposals include two distinct sections: Human Deliverables and Hard Deliverables.

The human deliverables describe the changes we want to see in people’s skills, confidence and behaviour.

The hard deliverables describe the tangible outputs and business outcomes the work is intended to support.

For example, developing a manager’s ability to have difficult conversations is a human deliverable. Addressing recurring performance problems with less disruption to the team, is a business outcome that capability could support.

Another, better delegation. The human change is a manager who gives clear responsibility and supports people appropriately. The business benefit might be fewer bottlenecks, faster decisions and more capacity across the team.

We make both visible because it helps us and our clients answer a useful question: what should be different at work as a result of this investment?

Feel free to borrow that approach for your next proposal to the board.

The next step is to measure what changes.

This can feel difficult, particularly in those situations where several things are happening in a business at once. You may introduce management development at the same time as changing IT systems, recruiting people or restructuring a team. So we need a clear structure to cut through the noise of everything else.

Start with something specific enough to track.

If the problem is managers are struggling to retain people, look at turnover and the reasons people give for leaving to start with. 

Then agree what improvement would look like with clear metrics, consider what people need to do differently and when you will review progress whether its at the end of throughut the change.

External research will help us make the case for investing and layer on top your own evidence helps you understand whether the investment is working.

For your next development proposal, I would do four things:

1. Start with the business need and be clear about the problem or opportunity the development should help address. AI can help here by writing it out in a way that makes sense of your thoughts. 

2. Set out the human and hard deliverables that connect the skills and behaviours with the outcomes you want to improve.

3. Agree the starting point and measures by involving the relevant managers, HR and finance so the evidence is useful to the people making decisions.

4. Plan how the learning will be used and give people opportunities to practise, support from their manager and time to review what is changing.

I like that last one. A well-received workshop is a good start but the return comes when people use what they have learned.

Development budgets compete with plenty of other demands for resource so we need to strengthen the case by linking it to what the business needs, how development can help and how we will assess the results.

For me, this is part of putting people first: giving them the capability and support to succeed but being clear about the value their development creates.

At CAKE, these are the conversations we want to have before designing a programme. If you’re working through a development priority and struggling to connect it with a business outcome, I’d be happy to talk it through even if we don't do the work with you. 

My challenge to you…

Take one priority your business already has. Consider what your people need to be able to do better to achieve it. What skills or support are they missing? How can we increase their confidence?

Next, establish where you are today and where you want to be. 

• What is happening now? 

• What would meaningful improvement look like and over what period? 

• What would that change be worth to the business (try to quantify it)?

Use those answers to set your human and hard deliverables. 

Be clear about the changes you want to see in people’s behaviour and capability plus the measurable business outcomes those changes should support. Think and work out how you will track both.

Build that into a proposal, using whatever format your business normally works with. Include the investment needed and how you’ll assess its value.

As L&D professionals, this is where we can change the conversation. 

“We’d like to run a management programme” 

becomes 

“We need our managers to address performance issues earlier, so we can reduce mistakes and improve the quality of our work. Here’s how we propose to help them do that and how we’ll measure progress.”

You’re giving the business a clear reason to invest in its people and a way to see the difference that investment makes.