THE BUSINESS CASE FOR
LEADERSHIP
And Its Development

LEADERSHIP MATTERS
More Than You Think

Leadership Affects Staff Morale
• Staff cited interactions with their direct
supervisor as one of the key events that The Quality
of
puts them in a bad mood at work1. Leadership
• 98% of staff say they perform at a higher
level when they are encouraged by a
leader who they respect2.
Staff
• Leadership style accounts for as much as Morale
12% of variance in in the level of staff
commitment3.

Staff Morale Affects Results
Staff
Research shows that Morale
organisations where staff
morale is high, outperform
organisations where staff Bottom
morale is low4. Line
Results

Staff Turnover
• Staff morale impacts on staff turnover and The Quality
retention rates5. of Leadership
Staff Morale
• As leadership affects staff morale, it not
surprising to discover that leadership also
affects staff turnover6. Staff
Turnover
• The cost of staff turnover has been Bottom Line
Results
estimated at 150% of the employee’s
salary package7.

Direct Contribution of Leadership
An independent review of research showed
that the quality of leadership consistently
accounted for between 20-45% of
differences in company’s bottom line
results8.

Clearly Leadership Matters
Staff
Attitudes &
Morale
Reduced
Effective Turnover Bottom
Leadership Line
Results

LEADERSHIP DEVELOPMENT
A Worthwhile Investment

Leadership Can Be Developed
From personal skills such as initiative and self-
confidence, through to relational skills such as
communication, conflict management and interpersonal
savvy, there is ample evidence that people can learn to
become better leaders9.

“Leadership development is the single
most important program of any army”
Lieutenant General Frederic J Brown

Strengthening Leadership Is A
Critical Strategic Challenge
Research shows that:
• More than 75% of companies see developing
leadership as a key workforce challenge10.
• Managers believe that investing in leadership
is the best way to address a whole host of
organisational challenges11.
Therefore investing in leadership development is critical to your
company’s competitive advantage.

Leadership Development Pays
A study by Harvard Business School found that
organisations who made wise investments into
developing their leaders delivered substantially
higher share returns than those who did not12.
Further, investing time and money into developing
leaders has been shown to improve staff morale
and retention – that’s all staff not just the leaders
being developed13.

In Closing
Research Therefore Thankfully
Shows
• Leadership • Strengthening • Leadership
Matters Leadership Is Can Be
Good Developed
Business

References
1. Basch, J. & Fisher, C. (2000), ‘Affective Events-Emotions Matrix’ in N. Ashkanasy, W. Zerbe & C.
Hartel, (eds), Emotions in the Workplace, Quorum Books.
2. Kouzes, J & Posner, B. (2000), The Leadership Challenge, 4th edn., John Wiley & Sons.
3. Goleman, D. (2000), ‘Leadership That Gets Results’, Harvard Business Review, March-April.
4. Ryan, A., Schmit, M. Johnson, R. (1996), ‘Attitudes and Effectiveness: Examining at an Organisational
Level’, Personnel Psychology, Winter, pp. 853-882; and, Ostroff, C. (1992), ‘The Relationship Between
Satisfaction, Attitudes & Performance: An Organisational Level Analysis’, Journal of Applied
Psychology, December, pp. 963-974.
5. R. Horn, P, & Gaertner, S. (2000), ‘A Meta-Analysis of Antecedents and Correlates of Employee
Turnover’, Journal of Management, 26, 3, 479 .
6. Griffith, J. (2004), ‘Relation of principal transformational leadership to school staff job satisfaction, staff
turnover, and school performance’, Journal of Educational Administration, 42, 3, pp. 333-356; Leveck, M. &
Jones, C. (1996), A meta-analytic review of ‘The nursing practice environment, staff retention, and quality of
care’, Research in Nursing & Health, 19, 4, pp. 331-343.
7. Schlesinger, Leonard A.; James L. Heskett (1991). ‘Breaking the Cycle of Failure in Service’, MIT Sloan
Management Review, 33, 3, pp. 17–28.
8. D. Day & R. Lord (1988), ‘Executive Leadership & Organisational Performance’, Journal of Management, Fall.
9. See next page.
10. Day, D. & Halpin, S. (2008), An Integrative Approach to Leader Development, CRC Press.
11. Martin, A. (2007), ‘The Changing Nature of Leadership’, Center for Creative Leadership.
12. Lauries Bassi & Daniel McMurrer, (2007), ‘Maximizing Your Return Through People’, Harvard Business
Review, March.
13. See research by Bersin & Associates

Note 9
R. Boaden (2006), ‘Leadership Development: Does It Make A Difference’, Leadership &
Organization Development Journal, 27, 1, 5-27.
C. Douglas (2003), Key Events & Lessons for Managers in a Diverse Workforce: A Report on
Research & Findings, Center for Creative Leadership.
F. Sala (2002), Do Programs Designed To Increase Emotional Intelligence Work, Hay Group;.
R. Boyatzis, D. Leonard, K. Rhee & J. Wheeler (1996), ‘Competencies Can Be Developed But
Not the Way We Thought’, Capability, 2, 25-41.
S. Stumpf (1995), ‘Applying New Science Theories in Leadership Development
Activities’, Journal of Management Development, 14, 5, 39-49.
J. Howell & P. Frost (1989), ‘A Laboratory Study of Charismatic Leadership’, Organisational
Behaviour & Human Decision Making Processes, 43,2, 243-269.
M. Sashkin (1988), ‘The Visionary Leader’, in J. Conger, R. Kanungo & Associates
(eds), Charismatic Leadership, Jossey-Bass.
F. Fiedler & M. Chemers (1984), Improving Leadership Effectiveness, Wiley.
Latham, G. & Saari, L. (1979), ‘Importance of Supportive Relationships in Goal Setting’, Journal
of Applied Psychology, 64,