Discover why leadership training is necessary. Poor leaders cost £126,000 annually per person, whilst trained leaders deliver 415% ROI—the choice is clear.
Written by Laura Bouttell • Tue 18th November 2025
The short answer: leadership training isn't optional—it's essential. A single untrained leader costs organisations an average of £126,000 annually through turnover, disengagement, and diminished productivity. Globally, poor management wastes approximately £7 trillion—9-10% of world GDP—making inadequate leadership development one of the most expensive organisational failures imaginable.
Yet despite this staggering economic evidence, 60% of new managers receive no training when transitioning to leadership roles. Predictably, 60% fail within their first 24 months. This isn't merely unfortunate—it's organisational malpractice that systematically undermines performance whilst competitors invest strategically in developing capability.
The question isn't whether leadership training is necessary. The evidence overwhelmingly confirms it is. The real question is why organisations continue promoting talented individual contributors into leadership positions without equipping them for fundamentally different responsibilities—and whether your organisation will continue this costly pattern or implement the training that delivers measurable returns.
The financial consequences of untrained leadership manifest across multiple dimensions:
Direct Costs Per Poor Leader:
National and Global Impact:
These aren't projections or estimates—they're measured consequences appearing in balance sheets, productivity metrics, and engagement surveys. Every pound invested in comprehensive leadership training potentially prevents these vastly larger losses.
Beyond easily quantified expenses, untrained leadership creates insidious hidden costs:
Knowledge Drain: When skilled employees leave due to poor management, they take institutional knowledge, client relationships, and process expertise that took years to develop. Replacing the person addresses only the visible portion of the loss.
Cultural Corrosion: Poor leadership corrodes organisational culture incrementally. Teams become risk-averse, innovation declines, collaboration fractures, and cynicism spreads. These cultural shifts resist quick fixes—restoring damaged culture takes years even after removing ineffective leaders.
Opportunity Cost: Untrained leaders make suboptimal decisions about resource allocation, strategic priorities, and talent deployment. The cumulative effect of hundreds of marginally poor decisions compounds into massive missed opportunities.
Reputational Damage: In an era of Glassdoor reviews and social media transparency, poor leadership becomes public knowledge. Recruitment becomes harder, client confidence wavers, and industry reputation suffers—impacts that persist long after leadership improves.
The statistics on unprepared leaders make alarming reading:
This systematic failure stems from the "great individual contributor trap"—assuming that technical expertise automatically translates to leadership capability. An exceptional engineer, salesperson, or analyst possesses fundamentally different skills than an effective leader requires.
The engineer excels at solving complex technical problems. The engineering manager must coach others through those problems, align team priorities with organisational strategy, manage stakeholder expectations, and navigate interpersonal dynamics. These capabilities don't spontaneously emerge through promotion.
Research demonstrates that 70% of team engagement stems directly from manager quality. This outsized influence means untrained leaders don't merely underperform individually—they suppress entire team capability.
Specific Performance Impacts:
The British historian C. Northcote Parkinson observed that "the man who is denied the opportunity of taking decisions of importance begins to regard as important the decisions he is allowed to take." Untrained leaders focus energy on trivia because they lack skills to address genuinely important challenges—a pattern that permeates their teams.
Modern business realities have definitively settled this question—leadership training is essential infrastructure, not optional development:
Complexity Demands: Organisational challenges have grown exponentially more complex. Leaders navigate globalisation, technological disruption, multigenerational workforces, hybrid work models, and rapid competitive shifts. Intuition and goodwill prove insufficient for this environment.
Talent Competition: In markets where skilled talent represents the primary competitive advantage, 75% of workers cite effective leadership as the #1 driver of job satisfaction. Organisations with untrained leaders systematically lose talent battles to competitors investing in development.
Return on Investment: Leadership training delivering £4-7 return for every £1 invested transforms it from expense to strategic investment. Organisations achieving these returns treat training as essential rather than discretionary.
Performance Multiplier Effect: Training produces compounding returns. A leader managing 10 people who improves 20% in effectiveness multiplies that improvement across their entire team. Scale this across organisational levels and the cumulative impact dwarfs individual contributions.
Some argue that experience, mentorship, or self-learning can substitute for structured training. The evidence suggests otherwise:
Experience Without Guidance: Untrained leaders certainly learn from experience—unfortunately, they often learn the wrong lessons. Without frameworks for reflection and feedback, experience can reinforce bad habits as easily as develop capabilities. As Aldous Huxley noted, "Experience is not what happens to you; it is what you do with what happens to you."
Mentorship Limitations: Whilst valuable, informal mentorship proves inconsistent. Quality varies dramatically, coverage remains patchy, and busy executives struggle to provide structured development. Mentorship complements formal training brilliantly but rarely substitutes effectively.
Self-Directed Learning: Motivated leaders reading books or consuming content certainly gain knowledge. Yet leadership fundamentally involves behaviour change, not merely knowledge acquisition. Classroom learning represents approximately 10% of effective development—the remainder requires guided practice, feedback, and coaching that self-study cannot provide.
Intellectual honesty requires acknowledging specific contexts where formal training delivers limited value:
Wrong People in Roles: No training programme transforms fundamentally unsuited individuals into effective leaders. Organisations that consistently promote wrong candidates into leadership create training programmes destined to disappoint. Selection precedes development.
Unsupportive Organisational Systems: When culture, performance management, and reward systems directly contradict training messages, leaders cannot apply new capabilities. Training 50 middle managers in empowerment whilst maintaining command-and-control executive leadership wastes resources.
Short-Tenured Positions: For genuinely temporary leadership assignments (project leads serving 3-6 months), comprehensive training ROI may not justify investment. However, organisations often underestimate how frequently "temporary" becomes permanent.
Adequate Existing Capability: Exceptionally, some leaders possess necessary capabilities through unusual prior experiences. Retired military officers, former entrepreneurs, or individuals with extensive volunteer leadership may require less foundational training, though even these populations benefit from organisation-specific development.
Rigorous research on well-designed programmes demonstrates substantial measurable gains:
Individual Leader Development:
Team and Organisational Outcomes:
Cultural and Engagement Gains:
Direct comparison reveals stark performance gaps:
| Performance Metric | Trained Leaders | Untrained Leaders | Performance Gap |
|---|---|---|---|
| Team Engagement | 72-78% | 42-48% | +30 percentage points |
| Direct Report Turnover | 8-12% | 22-28% | +15 percentage points |
| Goal Achievement | 78-84% | 58-64% | +20 percentage points |
| Innovation Metrics | 2.3x baseline | 0.9x baseline | +156% relative |
| Decision Speed | 1.8x baseline | 1.0x baseline | +80% relative |
These differences compound over time. A trained leader managing 10 people with 30% higher engagement and 20% better goal achievement delivers dramatically superior business results than untrained counterparts—justifying training investment many times over.
Effective programmes address both foundational capabilities and organisation-specific contexts:
Foundational Leadership Competencies:
Self-Awareness and Emotional Intelligence
Communication and Influence
Team Building and Development
Operational Excellence
Strategic Thinking
Organisational Context:
Generic leadership training delivers generic results. Necessary training explicitly connects capabilities to your organisation's strategy, culture, challenges, and competitive environment.
Research on effective development reveals critical design principles:
The 70-20-10 Framework:
Organisations overinvesting in classroom training whilst underinvesting in application, coaching, and practice systematically underperform. The most powerful interventions involve solving real organisational challenges whilst building capabilities.
Longitudinal Design: Two-day workshops produce two-day impact. Programmes extending over 6-12 months with ongoing practice, feedback, and coaching enable genuine behaviour change and skill development.
Blended Modalities: Effective programmes combine:
Measurement and Accountability: Programmes that rigorously track knowledge acquisition, behaviour change, and business impact continuously improve whilst those relying on satisfaction surveys stagnate.
Apply this diagnostic framework to evaluate training priority:
High Necessity Indicators:
Calculate Your Untrained Leader Cost:
Most organisations discover that training delivers positive ROI by preventing departure of just 2-3 employees annually per trained leader.
For organisations with limited resources, prioritise these essential interventions:
New Manager Transition Programme: The highest-risk moment occurs when individual contributors assume leadership responsibilities. A focused 6-8 week programme covering:
Research shows this intervention alone prevents majority of early manager failures whilst costing a fraction of replacement expenses.
Ongoing Coaching Support: Even brief monthly or quarterly coaching conversations dramatically improve capability retention and application. Many organisations implement peer coaching circles as cost-effective alternatives to external coaches.
Action Learning Sets: Groups of 5-7 leaders meeting regularly to tackle real challenges whilst supporting each other's development combine capability building with business value creation—often delivering superior results to conventional training.
Intellectual honesty requires acknowledging contexts where training proves insufficient or inappropriate:
Systemic Cultural Problems: If your organisation's culture fundamentally contradicts effective leadership practices—perhaps valuing political manoeuvring over competence, or short-term results over sustainable performance—training individual leaders addresses symptoms whilst ignoring root causes. Cultural transformation precedes effective leadership development.
Executive Team Dysfunction: Training middle managers in collaborative leadership whilst senior executives model toxic behaviours creates cynicism and waste. Leadership development must cascade from the top or risk becoming hollow rhetoric.
Inadequate Selection: Some organisations use training to compensate for poor promotion decisions. Whilst development can enhance capable leaders, it cannot transform individuals fundamentally unsuited to leadership into effective managers. Better selection reduces training burden substantially.
Resource Constraints: Occasionally organisations face genuine survival challenges where immediate operational demands preclude investment in development. These situations remain genuinely rare—most "we can't afford training" arguments ignore the greater cost of not training.
The Victorian polymath John Stuart Mill observed, "It is questionable if all the mechanical inventions yet made have lightened the day's toil of any human being." Similarly, leadership training programmes that don't drive genuine capability building and behavioural change merely create busy work whilst organisational problems persist.
The evidence overwhelmingly demonstrates that leadership training is essential infrastructure for organisational success, not optional development:
The Financial Case: With untrained leaders costing £126,000 annually and properly designed training delivering £4-7 return per £1 invested, the economic argument proves unambiguous. Organisations cannot afford to leave leadership development to chance.
The Performance Imperative: Leaders influence 70% of team engagement and substantially impact productivity, innovation, and decision quality. Systematic leadership development multiplies organisational capability whilst untrained leaders suppress it.
The Competitive Reality: In talent-constrained markets, organisations with strong leadership development are 4.2 times more likely to outperform competitors. Leadership capability increasingly determines competitive advantage.
The Moral Obligation: Promoting individuals into leadership without equipping them for success sets them up for failure. Organisations have ethical obligations to people they place in positions requiring capabilities they haven't yet developed.
The Greek myth of Icarus—given wings but inadequate instruction, leading to catastrophic failure—parallels modern organisations granting leadership authority without training. Predictably, many crash.
For organisations genuinely committed to performance, leadership training isn't a "should we?" question—it's a "how do we do it excellently?" imperative. The choice isn't whether to invest in leadership development but whether to invest strategically in effective programmes or wastefully in poor ones.
Leadership training benefits all employees, not merely formal managers, because 75% of workers cite effective leadership as the #1 driver of job satisfaction, meaning everyone encounters leadership throughout their career. Organisations that embrace leadership training at all levels are 4.2 times more likely to outperform those restricting it to management. Additionally, early leadership development prepares high-potential employees for future roles, creates common language and expectations around leadership behaviours, and enables informal influence regardless of title. Modern work increasingly requires influencing without authority, making leadership capabilities valuable for individual contributors, project leads, and cross-functional team members—not merely hierarchical managers.
Untrained managers face catastrophic failure rates—60% fail within their first 24 months largely due to inadequate preparation. The consequences cascade throughout organisations: each poor leader costs £126,000 annually through turnover, disengagement, and productivity loss. Teams led by untrained managers experience 15-25% lower productivity, substantially higher turnover, reduced innovation, and diminished decision quality. At organisational levels, poor management wastes £960 billion to £1.2 trillion annually in the United States alone. Beyond measurable costs, untrained managers corrode culture, damage employer reputation, and create cynicism that persists long after leadership improves. The pattern becomes self-perpetuating as talented employees leave, remaining staff disengage, and organisational capability systematically declines.
High-performing organisations typically allocate 2-4% of payroll specifically for leadership development, with overall learning and development budgets of 1-3% of payroll. However, amount matters less than approach—a £50,000 investment in evidence-based coaching for high-potential leaders often delivers superior returns to £500,000 spent on generic workshops. Research shows well-designed programmes produce £4-7 return for every £1 invested, with 415% annualised ROI when including proper implementation support. Calculate minimum necessary investment by estimating untrained leader costs (£126,000 annually per ineffective leader) and replacement expenses (150% of salary for mid-level departures). Most organisations discover training delivers positive ROI by preventing departure of just 2-3 employees annually per trained leader.
Experience proves necessary but insufficient for leadership development. Whilst leaders certainly learn from experience, untrained leaders often learn the wrong lessons, reinforcing bad habits rather than building capabilities. Research demonstrates the 70-20-10 framework: 70% of development occurs through challenging experiences, 20% through coaching and mentoring, and 10% through formal learning. The critical insight is that experience works best when combined with frameworks for reflection, structured feedback, and coaching guidance that formal training provides. The 60% failure rate of untrained new managers despite gaining experience demonstrates that experience alone inadequately prepares leaders. Effective development harnesses experience through deliberate practice, systematic reflection, and expert guidance—not simply accumulating years in role.
Research and practice identify five essential capability areas. First, self-awareness and emotional intelligence—understanding personal style, managing emotions, and developing empathy. Second, communication and influence—articulating vision, active listening, providing feedback, and influencing without authority. Third, team building and development—creating psychological safety, facilitating productive conflict, and developing individual capabilities. Fourth, operational excellence—setting goals, managing performance, delegating effectively, and making quality decisions with incomplete information. Fifth, strategic thinking—connecting work to organisational strategy, anticipating trends, and balancing short-term performance with long-term capability. However, generic training delivers generic results—the most effective programmes explicitly connect these capabilities to specific organisational strategy, culture, challenges, and competitive environment rather than teaching abstract leadership concepts.
Leadership development should commence before formal leadership responsibility, not after promotion. Forward-thinking organisations identify high-potential employees early and provide progressive development experiences: informal influence opportunities allowing practice without formal authority, project leadership managing initiatives before managing people, mentorship relationships with experienced leaders, exposure to strategic thinking through participation in planning processes, and feedback on leadership behaviours before high-stakes environments. This approach prepares individuals for transition success rather than promoting first and training later. However, the highest-risk moment remains new manager transition—when individual contributors assume leadership responsibilities—making focused programmes during this 6-8 week period essential for preventing the 60% failure rate observed amongst untrained new managers.
Leadership training produces results across different timeframes depending on what you measure. Knowledge acquisition occurs rapidly—participants demonstrate 25% improvements within weeks of programme start. Initial behaviour change emerges over 3-6 months of practice with feedback and coaching, with observers noting differences in communication, delegation, and decision-making. Sustained capability building requires 6-12 months, as new behaviours become habitual and leaders navigate various situations successfully. Business impact—measurable improvements in team engagement, productivity, and retention—typically manifests after 6-12 months of consistent leadership behaviour change. Cultural transformation extends over years, which is why effective programmes adopt longitudinal designs with sustained support rather than one-off training events. Organisations expecting immediate transformation from two-day workshops inevitably disappoint; those investing in multi-month development see substantial returns.