I often find when chatting with CEOs and executives that they’re wrestling with the same two challenges.
They can’t find good leaders, and they’re frustrated with the performance of some of the leaders they already have.
They’re looking for people who can think strategically, lead through change, have difficult conversations, make sound decisions, develop their teams and take ownership. Those people can be difficult to find.
So I often ask a question that changes the conversation:
“What are you doing to grow the leaders you already have?”
There’s usually a pause. Sometimes it’s followed by a nervous laugh. Occasionally someone suddenly finds their coffee very interesting.
While most organisations genuinely believe developing leaders is important, it’s often the first thing pushed down the priority list when business gets busy. Ironically, that’s usually when it’s needed most.
After more than 30 years working with organisations, I’ve come to believe many businesses don’t actually have a shortage of leadership potential. They have a shortage of investment in developing it.
Some of the best leaders I’ve worked with didn’t walk through the door with an impressive résumé or years of management experience. They were curious, took ownership, genuinely cared about other people and wanted to learn. Someone recognised that potential long before they recognised it themselves.
They weren’t simply promoted. They were coached, challenged and given honest feedback. They were trusted with work that stretched them, supported when things didn’t go to plan and encouraged to back themselves.
Too often, we expect someone to become an effective leader simply because they’ve been given a new title. If promotions automatically produced capable leaders, our work would look very different.
The organisations that consistently produce strong leaders take a different approach. They create deliberate pathways for people to grow, provide meaningful coaching and feedback, and give emerging leaders opportunities to take on greater responsibility before they’re expected to have all the answers.
The benefits extend well beyond the individual. People become more confident in their decisions, teams perform more effectively and organisations create cultures where people want to stay and contribute.
Developing leaders isn’t only about preparing someone for their next role. It’s about helping them perform better in the role they’re doing today.
Of course, this requires time and investment. I understand why organisations sometimes hesitate. Budgets are under pressure and there are always competing priorities.
What we rarely discuss is the cost of doing nothing.
Over the years, I’ve watched organisations spend enormous amounts recruiting replacements while overlooking capable people already inside the business who simply needed support.
Gallup estimates that replacing a leader can cost around twice their annual salary. For someone earning $150,000, that’s approximately $300,000 before you’ve considered the impact on team performance, customer relationships or the organisational knowledge that walks out the door with them.
Viewed through that lens, investing in leadership capability becomes far less about cost and far more about protecting one of an organisation’s most valuable assets.
Research highlighted by SHRM suggests organisations generate an average return of $7 for every $1 invested in leadership development through improved retention, stronger internal capability and better organisational performance.
Those findings simply reinforce what I’ve seen throughout my career.
Many of the strongest leaders I’ve had the privilege of working with weren’t the obvious choice at the time. They became exceptional because someone recognised their potential early and invested in helping them grow.
That’s why I believe developing leaders is one of the most important business decisions an executive team can make.
Before you begin searching for your next leader, pause for a moment and look around your organisation.
Who already has the potential?
Who is ready for greater responsibility with the right support?
Who could become an exceptional leader if someone invested in their growth?
Your next great leader may already be sitting in the office next door.
The question is whether you’ll recognise that potential before someone else does.