In this episode, Chris Goede and Perry Holley discuss the real return on investment that comes from prioritizing leadership development within organizations. They highlight the difference between equipping team members with technical skills and truly developing leaders who can inspire, engage, and retain talent. The conversation explores common challenges organizations face when they focus solely on task training, like high turnover and disengagement. You’ll discover practical strategies for building a leadership culture that drives long-term results and supports both individual and organizational growth.
Perry Holley:
Welcome to the Maxwell Leadership Executive Podcast, where our goal is to help you increase your reputation as a leader, increase your ability to influence others, and increase your ability to fully engage your team to deliver remarkable results. Hi, I’m Perry Holley, a Maxwell Leadership facilitator and coach.
Chris Goede:
And I’m Chris Goede, Executive Vice President with Maxwell Leadership. Welcome, and thank you for joining. Today’s topic is one that we think about quite a bit. This is the industry and the business that we’re in, and so we’re gonna talk about the ROI of leadership development. Before we do that, though, what I would love for you to do is go to MaxwellLeadership.com/ExecutivePodcast. There, you can fill out a form. One of the things that our team loves to do is to build out intentional leadership for individual leaders, for organizations, and we’ve just released recently a culture diagnostic that gives you an idea of where to start. So one of the things that we wanna dive in and talk about is there’s individuals out there, there’s team members that go, man, why is it so hard for me to talk to my leader, to talk to maybe the CEO about, man, we need leadership development here, and it’s worth it? the investment, especially when we’re seeing data and we’re seeing people say, man, I’m choosing organizations because of what was presented to me for my personal leadership development plan.
Chris Goede:
So let’s dive in. Let’s talk about this and where it came to fruition in your mind about sharing with our listeners today.
Perry Holley:
Yeah, this one came from a listener that wrote in and asked, was this a problem that I had seen other places? And basically is saying that the owner of his company was really big into training, I guess what we would call equipping, for skills to do the job. So if they had project management, like project management training or finance training or spreadsheet training, that they had a lot, they had no lack of equipping types of courses that they could take. But when he asked, can we do leadership training, leadership development, which we would call development, Mm-hmm. versus equipping, the CEOs kind of said, no, we’ve got way too many other issues to solve. I wanna invest in what actually trying to solve our problems. So we’ll do the equipping types of things, but not the developing types of things. And I thought about that and I began just thinking over it over months, actually, how much I see that. Maybe there’s degrees of it.
Perry Holley:
It’s not like leadership development is bad. It’s just, if I’m gonna invest in something, I’m gonna invest in skill training, not—
Chris Goede:
Development.
Perry Holley:
Life development training. And I wondered if you, what do you think about that? Do you see that?
Chris Goede:
Oh, we see it all the time. I think it’s because they can tie the dots so easily to, I’m gonna improve the skillset of this, and that should turn around and make them more efficient, which then should flow to the bottom line. And at the end of the day, leaders are responsible for the EBITDA at the bottom of the line of driving top-line revenue and then making sure they’re profitable. And oftentimes their mind goes right into the skillset. But I want to throw this back to you because you have a lot of experience in different organizations, big organizations, some small organizations. And why do you think leaders or CEOs or founders or owners or boards draw such a hard line between task training and leadership development? What are they thinking about other than the simplicity of what I just shared?
Perry Holley:
I think it is kind of a bit of a false line. You’re definitely going to get value from the equipping. Everybody needs to have their skills You have to have advanced.
Chris Goede:
Yeah.
Perry Holley:
But I think if you lead, if you manage, let’s say if you’re a manager, a first-line manager, second-line man, and you have at least one person under you and you are not effective as a leader to do that, in my opinion, you can undermine all the skill training. They’ll have the skill, but they will not— we talk many times about it, they won’t be fully engaged, fully bought in. They won’t be energized. They won’t be leaning into it. They’ll just come to work and do their job perhaps if the leadership is poor. I mean, to me, it’s accelerant. Leadership development is the accelerant that you pour on top of great equipping training. But you gotta have the equipping.
Perry Holley:
I’m not saying you don’t do that, but I’m thinking if you have even managed one person, you can undermine all the great skills. They have the best skills in the world, but they don’t feel valued. They don’t feel inspired. They’re not being led. They’re being pushed. They’re being micromanaged. And I mean, what good is that?
Chris Goede:
Yeah, this for us is level 1 leadership. And we talk about this is that over 70% of leaders around the world that we run into in different industries and size companies, they’re leading straight from level 1, right? Because they wanna just, hey, here’s how I’ve done it, here’s how you’re gonna do it, now go do it.
Perry Holley:
Mm-hmm.
Chris Goede:
And that’s, the skillset is there. They wanna teach ’em that skillset. And for us, the difference is, Hey, don’t throw the baby out with the bathwater. You have to know what you’re doing. You have to have that skillset. But there’s so much more that can be added on top. Like you talked about, it can be the fuel and it can be the fire to a better return on investment if you invest in the leadership development piece.
Perry Holley:
Do you think it’s just semantics that I need to have a— I’m a project manager, I need to have project management skills. I’m a manager of a team of 10. Don’t I need to have leadership skills? It’s still a skill that you can develop.
Chris Goede:
Yeah, it is.
Perry Holley:
So different types of skills. But I’m wondering if it is just we’re looking so much in the nuts and bolts down here to get the job done, we’re not thinking about how to get the buy-in, the belief, the people right. Because if they don’t— we’ll go back to level 1. I can be your boss and tell you go project manage, but if I am going to get you to want to be here and to row in this boat, You’re going to need more from me as a leader to do that.
Chris Goede:
Yeah, 100%. I don’t know what the exact percentage is, but it’s over 80% of people that get promoted to a leadership role because they were a really good individual contributor. I think about this in all the sales organizations we work with, or it doesn’t even matter whatever that skillset is. And then they go, man, Chris, You were really good at that. Now go lead a team to be really good at that. And so what do I do? I go in there and I’m like, here’s how you guys are gonna do it. And I lead strictly from level 1.
Chris Goede:
Because why? Because we have not been taught how to, we haven’t been developed on how to lead people. And oftentimes what we do is we then lead people the way that we wanna be led or how we have been led in the past. And both of those are wrong. And I didn’t learn that until years inside the Maxwell Leadership bubble. So the real answer is you got to lead them the way they need to be led, as well as make sure that they have the right skillset.
Perry Holley:
Is there a sign, if you were talking to a head of a company, that they have a gap, that they’ve heavily invested in skill equipping, but they haven’t invested in the leaders? Is there a gap that would show up? What would you see? That would tell you that?
Chris Goede:
A couple things off the top of my head. Number one, I think you would see a turnover problem inside the organization. We teach that a lot of people, when you think about the 5 levels of leadership, which that’s what this is based off of, they go straight from level 1 influence, which is the title, command and control, kind of because I said so, to level 3, which is the production. And they skip that connection piece of understanding how to lead that individual. So what ends up happening is that we see a massive turnover in the teams of the leaders that haven’t been developed or trained, to your point, of how to lead people. And so that would absolutely be one of ’em. And then that would lead to engagement and productivity and a couple of other things.
Perry Holley:
Also, one thing about productivity, we’ve just been doing a lot with performance management with one of our new courses on firm feedback and performance management. You think that if you aren’t leading, again, back to your point, level 1, I’m telling you what to do, go do it, I’m the boss, do it because I said so, versus being the leader that do it because you want to and that you’re with me and we’re producing results together. So the performance management says, if I’m not trained, I get poor expectations, I lack clarity perhaps, my people don’t know exactly what to do, I’m nervous about feedback, I don’t know how to do accountability. So I just I just doubled down on level 1 and making people, being the taskmaster to do it because I don’t know how to engage the people in a correct way to generate results because they really want to be there and be a part of that.
Chris Goede:
And on top of that, then what I think is, especially with your high performers, I think you see burnout. We’re hearing this a lot in different organizations where your high performers, your high people, now you’ve You’ve asked them to go and lead people and they’re discouraged and they’re not as, the team’s not as successful as they wanted it to be. And they keep trying and then it just becomes to where they just get burned out. And then you end up losing that talent all because you didn’t invest in their development. And it’s not necessarily, some people go, well, maybe I promoted the wrong person. Okay, that could be. That absolutely could be. However, I would challenge and say it’s probably more that we promoted them and then we didn’t invest in or kind of level up their leadership in how to lead that team because they’re competent, right? I mean, they were killing it.
Chris Goede:
They got that promotion for a reason, and then we promote ’em and then we just let, go figure it out.
Perry Holley:
Right, right.
Chris Goede:
Right? And so they get burned out and then they end up leaving.
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5 Levels of Leadership:
That’s 5LevelsOfLeadership.com.
Perry Holley:
I wonder what effect it has on your culture if you’re just a skill training organization, not a leadership training organization, long-term, what that does to your culture. What do you think?
Chris Goede:
It’s level 1. Yeah, it’s a level 1 culture. Ship ’em in, ship ’em out. I don’t think there’s any continuity. I don’t think that there’s any growth. I don’t think that there’s any empowerment. I think it becomes, there’s a bottleneck there because they’re frozen. They’re not sure what to do.
Chris Goede:
The team’s frozen. It is a mess when you do that.
Perry Holley:
Yeah.
Chris Goede:
It is a mess. And listen, because we’re in this space, we get passionate about this. You and I talk a lot about the fact that leaders, when they invest in their people, the productivity and the return on that investment is not even close to probably what you’re spending on the turnover and retention issue.
Perry Holley:
Go there with me on that. If you’re still skeptical after all this, what is it costing? I know there’s lots of research on disengaged employees and that sort of thing, but is it worse?
Chris Goede:
Yeah, I would say this. I would say that there is a dollar figure. We’re not gonna go into that formula. There’s a formula out there. And so I promise you, it’s a lot more than what it would be in developing. But I also think you’re missing out on the opportunity to get buy-in from those people.
Perry Holley:
Mm-hmm.
Chris Goede:
In the law of buy-in, we talk about that they’re gonna buy into the leader Even before they buy into the vision. And that is so true because people join companies ’cause they’re super excited about it. They think they have a great culture, they love their vision, and they get in there and then they work for a leader that hasn’t been developed, and then they quit the leader, right? Because they’re not buying into that leader. And all of a sudden you’re like, but what about the vision of the company and the mission? Well, that’s great. I love that, but I can’t buy into that leader because he hasn’t been developed and he’s leading me from level 1. And so you don’t have that buy-in from the team.
Perry Holley:
And I think about the soloist to conductor quandary that you mentioned a little bit earlier, but you take your number 1 soloist, they’re best at their best salesperson, the best technical leader, and you promote them to be the leader of the department next week and they haven’t been— you haven’t invested in them and now they don’t know how to lead, so they begin to be super soloists. They begin micromanaging everybody’s business, start to drive people crazy, then drive them away. It just is a compounding problem if you continue to promote good people into leadership positions that don’t know how to lead.
Chris Goede:
Perry’s mentioning right here a book that John Maxwell wrote called Leadershift. It’s a phenomenal book as you begin to transition Maybe you’re listening to this and you go, hey man, I’m in that boat. I can’t get my leader, my CEO to invest in some leadership coaching for me or development. I want you to buy that book because it walks you through, I think, 17 different shifts. And Perry’s talking about one of ’em, which is you gotta go from being that soloist to the conductor. And there’s some great content in there for you. to vet out, live out. All right, so let’s say, listen, you’ve been in sales before, okay? You’re standing in front of your CEO right now, your leader, maybe at IBM, back in the day at IBM, and you want some leadership development for the team, for yourself.
Chris Goede:
What’s your pitch? Like, what are you saying to that leader in order to get him to say, yes, Perry, I wanna invest in you and develop you?
Perry Holley:
Yeah, it’d probably have to be a long, There’s so many ways to start this, but the multiplier effect, just if equipping improves one person’s output, wouldn’t developing a leader improve the output of everyone the leader touches? Most leaders touch more than one person, and we teach influences up, down, and across. So not only are you learning skills to lead and influence the people that report to you, you’re also growing your leadership across and with that leader that’s buying into you. What do you think? What is it?
Chris Goede:
Yeah, couple of things. So DDI’s in this space and their global leadership development research just came out. And so I was digging through that looking for today, and it said those that are in the HR suite, HR professionals say that only 20% of them have leaders that are ready to fill critical roles. So you think, think about this. You think about the different generations in the workforce, and we do a little bit of studying on this. We know that there’s 5, maybe even 6, and we have a training where we spend some time about leading the multi-generational team based off of Tim Elmore’s work. You think about the number of people that are retiring, and I would ask you, or I would ask the CEO, say, Do we have a bench that internally, not hire, because you know how you and I feel about going and hiring externally and what that does to the culture, but do you have a bench that’s ready to fill that gap? And then I would also say, look, let’s talk about technology for just a minute and skillset. Leadership development is not competing with that.
Chris Goede:
I actually think you have to have that to get the best use out of the technical changes that you are actually making, which makes it more urgent to me to be able to do that. And I have this little phrase, I was listening to a content piece around AI and leadership, and it talks about, man, don’t forget to leave the human in the loop.
Perry Holley:
Right.
Chris Goede:
Right? And so we better understand how to lead that human who is in the loop of, helping these tools that are coming up from a technology standpoint that are making us better. Otherwise we’re just gonna have a massive—
Perry Holley:
I think most CEOs would never let an untrained person run an expensive piece of machinery.
Chris Goede:
Yeah, that’s right.
Perry Holley:
However, human, if I ask you what’s your most valuable asset?
5 Levels of Leadership:
Yeah.
Perry Holley:
It’s my people. Well, you’re letting untrained people run them. No, I’m gonna, and I think about Valerie Burton’s resilience work on, we talk about human capital, but you have psychological capital in it. And am I winning their hearts and minds to be a part of this team and to really contribute here? Or are they just salute and stay mute and just doing what they’re told? No, no, I’m going to really try to invest in them.
Chris Goede:
So let me say this, what you just said. We have the privilege of working with our military and they have a dollar figure, especially on some of their special forces that they go, That soldier is— we’ve invested X amount of dollars into them. And so they are doing that both from a technical standpoint, but also we’ve had the privilege of the last 10 years walking alongside them and developing them as leaders.
5 Levels of Leadership:
Mm-hmm.
Chris Goede:
Because some of the best in the world technically would get into teams and it would just be The wild, wild west.
Perry Holley:
That’s right.
Chris Goede:
Right? And so here you go, and I’m talking investment of millions into these men and women and soldiers. And so I think they’re paving the way that all CEOs and executives in business ought to be looking at that.
Perry Holley:
Yeah. Well, I love this lesson and thinking about it. For me, it’s been great, but I’ll tell you, my big takeaway was, I think I said it a minute ago, but you equip Equipping somebody trains one person, but developing a leader affects everybody that leader touches. And to me, I can really take that away as anytime I’m talking with a leader is that, are you investing in that leadership? Because that’s what’s going to carry you forward. All the skills, you’re going to need all the skills, but they’re not going to be put to the best use if they don’t have a good leader.
Chris Goede:
Yeah, I love that.
Perry Holley:
Why don’t you wrap it up for us?
Chris Goede:
I will. A couple of thoughts for us as we wrap up and we talk about the ROI of leadership development. For me, law of the lid, as simple as this is, it comes back to you and I have never seen organizations that have outgrown the leadership capability and capacity of their bench, right? So organizations, they don’t rise to the level of their strategy that’s on their paper or the things that are on their wall. They often rise to the level of the leader’s responsibility of actually executing that, like taking that to the— and that has to be done in and through people.
Perry Holley:
That’s right.
Chris Goede:
It just can’t be done. And so the other thing I would say is this, is leadership development is not just for the team member or the employee, although it benefits them, it’s also for the organization. So you’re investing in this individual, this employee, and it’s a benefit for them, And then it’s a benefit for the growth of your organization and the strategy that you’ve laid out. Because now you have more, what we like to say, hands and feet to the legacy because you’ve developed people.
Perry Holley:
There you go.
Chris Goede:
So I think it’s a must. Now we’re biased, right? And matter of fact, I’ll tell you what, just fill out that form and just put your boss’s name on it and tell him Perry’s calling you.
Perry Holley:
That’s right.
Chris Goede:
And he’ll call and talk about it and the benefits that he’s seen.
Perry Holley:
I’m on the phone.
Chris Goede:
Give me that. Get that form. Yeah.
Perry Holley:
Great stuff. Well, thank you, Chris. And as a reminder, if you’d like to get to that form, also learn about our offerings or other podcast family offerings, you can do all that at MaxwellLeadership.com/ExecutivePodcast. You can also leave us a note or a question there. We love hearing from you. So grateful you’d spend this time with us today. That’s all from the Maxwell Leadership Executive Podcast.
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