Leadership Development Investment: How to Get the Greatest Return

When it comes down to it, leadership development is a capital allocation decision.

CEOs scrutinize capital expenditure, technology investments, and merger and acquisition opportunities. But leadership development is often treated as an expense rather than a strategic investment.

Elevate2Grow Leadership Coaching Founder and Vistage speaker Tracy Winkler argues the opposite: when done well, leadership development is one of the highest returns on investments a CEO can make — precisely because it targets your most expensive and most powerful lever: your people.

“First, I think it’s one of the highest returns that we can get,” she says. “Our people are our No. 1 asset and our top expense.”

For Steve Van Remortel, a Vistage speaker and Founder/CEO of MyTalentPlanner Growth Accelerator System and Growth Coach at Stop The Vanilla, LLC, leadership development is not just about sharpening employee skills. It is also about attracting and retaining the people a company needs to stay competitive.

“To me, leadership development ROI is not only about retention, but also about creating a culture that is seen in the community as a great place to work,” he says. “Attracting and retaining talent is going to 10x in importance the next 3 years.”

Emma Doyle, Vistage speaker and founder of Coach EM and the Coaching Leadership Academy (CLA), adds that leadership development across teams helps decision-making move faster. It also spreads across the team, allowing the business to move more quickly.

“The impact shows up in stronger productivity, healthier margins and better retention,” she says. “When leaders coach effectively, good people stay and internal capability grows. Over time, better decisions compound into real business results.”

The question shouldn’t be: Is leadership development worth the investment? Instead, it should be: Are you getting a measurable return on the strategic investment?

“Leadership development only produces ROI when it increases an organization’s ability to diagnose, decide, and execute,” Winkler says.

The Real ROI of Leadership Development

Organizations that invest in leadership development can realize ROI in multiple ways. Van Remortel sees the value of leadership development less in short-term performance gains and more in business continuity amid a shrinking workforce. As the “demographic cliff” reduces the pipeline of college-educated workers over the next 15 years, companies that fail to invest strategically in leadership development may face growth constraints regardless of market demand, technology, or capacity.

“The last four generations, from the Baby Boomers down to Gen Y’s and Gen Z’s, there have been approximately 70 million people in each of those generations,” he says. “Gen Alpha, which is 0 to 15 years old right now, only accounts for 38.5 million people.”

Doyle adds that the true ROI is when leaders think better and coach more; they can multiply the capability of the people around them.

“The ultimate ROI is when leaders develop other leaders, reducing dependency on the CEO and increasing capability throughout the organization,” she says.

In her work, she focuses on helping leaders coach for retention, productivity, and growth. When leaders learn how to coach rather than control, people stay longer, decisions get made faster, and capacity grows across the organization. That’s the real return: better decisions, a stronger culture, and leaders who develop other leaders.

“When leaders share the same tools, language and decision frameworks, things move faster,” Doyle says. “Leaders stop waiting for permission and start making thoughtful decisions closer to where the work is happening, which naturally reduces pressure on the CEO.”

When leaders shift from solving every problem themselves to coaching others to think, delegation improves, ownership spreads, and the organization builds real momentum, she adds.

Winkler adds that leadership development only produces ROI when it increases an organization’s ability to diagnose, decide and execute. If that capacity does not increase, the investment becomes enrichment, not scalable capacity growth.

In her work with executives, she focuses on three tightly connected outcomes:

• Decision Velocity: How quickly and effectively decisions are made.
• Alignment and Commitment: leaders pulling in the same direction.
• Accountability and follow-through: ensuring what’s decided happens.

Leadership development that doesn’t move the needle on these 3 levers quickly becomes a sunk cost: people feel inspired for a day or two, then drift back into old habits.

Why Some Leadership Development Investments Underperform

Most underperforming leadership development efforts do not fail because of bad intent. They fail because of weak design.

A common pattern is to send one or two leaders to an excellent external program and expect the benefits to spread naturally throughout the organization. Or they send the wrong team members. Van Remortel agrees and encourages CEOs to invest in employees beyond the senior leadership team. Without leadership development for every single team member, you will see turnover in underdeveloped roles, he says.

“In a manufacturing company I ran, our market differentiation was our ability to switch packaging lines faster than anybody else,” he says. “So, where did we invest in leadership development? In job floor leadership, because our competency, differentiation and strategy came from the shop floor group.”

Despite heavy investment in leadership training, many programs fail to deliver meaningful change because they rely too heavily on subjective judgment rather than objective data.

“One of the strong beliefs I have in leadership development is that a lot of leadership development is subjective, and I believe that leadership development needs to be based around objective data,” Van Remortel says. “Behavioral science gives us the data to put a development plan in place that’s going to address the greatest growth opportunities that this person has, professionally and personally.”

Like Van Remortel, Winkler integrates multi-science behavioral analytics to translate insight into practical leadership action across hiring, promotion, succession, and change. This multi-dimensional lens examines behavior (how someone acts), motivation (why they act), acumen (how clearly they see the world), emotional intelligence (how they manage themselves and relationships) and competencies (what they can actually do).

“When execution stalls, the breakdown is rarely effort. It’s almost always a design problem,” she says.

The 5 Drivers of High-ROI Leadership Development

If CEOs want a greater return, they need to structure leadership development around five key factors.

1. Clear Strategic Alignment

Leadership development works best when it is tied directly to where the business is going next. Effective programs ensure:

• Development is tied to the company’s growth stage.
• Defined leadership capabilities required for next-level scale.
• Focus on enterprise thinking, not just functional excellence.

“When leadership development aligns with strategy, more conversations become relevant to the real challenges leaders are facing,” Doyle says. Instead of abstract theory, leaders apply tools directly to growth priorities, operational challenges and culture goals. That alignment focuses energy on what truly moves the business forward.”

CEO takeaway: You get ROI when development aligns with strategy.

2. Applied Learning (Not Passive Consumption)

Leaders need opportunities to apply new frameworks to live challenges, not just hear good ideas in a conference room. Stretch responsibilities, structured decision-making and real-time business issues all make development more useful because learning connects to action.

Strong leadership development programs ask leaders to:

• Work on real business challenges.
• Apply frameworks immediately.
• Include stretch responsibilities through the development program.

“Ongoing leadership development provides a rhythm where leaders practice, learn and adjust over time,” Doyle says. “This cadence allows leaders to work through issues step by step. That sustained structure turns ideas into habits, and habits are what create lasting ROI.”

CEO takeaway: Learning must connect to decisions.

3. Peer Challenge & Accountability

The right peer environment gives leaders room to test assumptions, hear how others approach similar issues and be challenged by people outside their own function or company. That exposure helps them think more broadly and behave more intentionally. Winkler emphasizes the value of hearing other people’s perspectives, how they face different challenges, and what they would do differently.

“I’m a big believer in peer groups. Every month, once a month, I meet with nine other software founders and I learn more than anything in that environment than any other,” Van Remortel says. “The strongest learning in my career comes from the peer groups I’ve been in.”

Peer groups also provide:

• Safe environments to test thinking.
• Exposure to leaders outside their function.
• Constructive challenges accelerate maturity.

“Leadership improves when leaders are challenged by other leaders, which is essentially what happens inside Vistage groups every month,” Doyle says. “Peer accountability encourages people to act on insights and report back on results. When leaders share decisions, actions, and outcomes with peers, thinking sharpens and blind spots become visible.”

CEO takeaway: Peer accountability increases behavioral change — and therefore ROI.

4. Ongoing Structure (Not One-Time Events)

There is value in a boot camp, workshop, or short, intensive program. Those formats can create momentum, establish a shared language and spark awareness. But they are rarely enough on their own. Habit formation, identity shift, and consistent execution require repetition, reinforcement, and accountability over months — not days.

“I love a boot camp at first, but have to experience it in person, and it has to be interactive,” Winkler says. “The issue with single-day events is that everybody leaves charged up, but then nothing is done after. If it isn’t measured and no one owns KPIs to make it executable, it is an expensive experience that wastes people’s time.”

One-off workshops with no reinforcement have:

• Generic content not tied to company strategy
• No behavioral accountability
• Development divorced from real business challenges
• No measurement of capability change

“I see speaking and two-day workshops as a way to build trust to continue than working with an organization over a longer time,” Winkler says. “For learning to stay sticky, we have to have KPIs and build the muscle memory over time.”

CEO takeaway: Compounding requires time.

5. Measurable Outcomes

Leadership development becomes more credible when CEOs define success up front. But those outcomes must connect to the organization’s goals.

These are examples of metrics CEOs can use to track effectiveness and ROI:

• Reduction in decision escalations
• Faster cross-functional alignment
• Increased internal promotions
• High-potential retention rates
• CEO time reclaimed
• Higher retention rates
• Less turnover
• Higher quality decision-making

Doyle encourages leaders to think beyond ROI and also consider IOR (Improvement on Relationships). Stronger relationships build trust, improve communication and lead to better decisions, which ultimately drive financial outcomes. For leaders who like numbers, the formula is simple: the ROI percent equals the net gain divided by the investment cost, multiplied by 100.

She offers this example: if a $50,000 leadership investment generates $200,000 in measurable value, the return is 300%.

Winkler adds that, “If leadership development is working, dependency on the CEO should shrink quarter over quarter.”

CEO takeaway: Encourage CEOs to define success up front.

Calculating the Hidden Return

Identifying the return on investment in leadership development can sometimes be hidden. But consider the cost of replacing a senior leader. Van Remortel encourages CEOs to think about ROI in terms of retention as much as growth.

He offers this example: The cost of 1% turnover to an organization is estimated at $35,000. In industries like manufacturing, the U.S. Bureau of Labor Statistics says turnover is 39.9%.

“If we round the salary to $40,000 and round the turnover to 40%, that is $1.6 million in turnover costs,” he says.

As illustrated, replacing any staff member can easily cost more than their annual salary, and the cost increases with seniority. But that’s not the only hidden cost of employees not receiving leadership development.

“A CEO bottleneck delaying a key initiative can result in significant lost revenue,” Doyle says. “When CEOs view leadership development through this lens, the conversation shifts from expense to exposure.”

The CEO recruitment process can cost $300,000 to $600,000, according to Winkler. Beyond the expense, if succession is not handled well, it can jeopardize the company’s future or cut out family members who may want to step in, putting them out of the picture.

“Coming from a third-generation family, a billion-dollar company that did not have a succession plan for how the transition was going to go, did not end up well,” she says. “Leadership development helps create a successful succession.”

CEO Self-Assessment: Are You Maximizing Your Investment?

Before investing in a new leadership development program or scaling back an existing one, CEOs must conduct an honest assessment of whether they are maximizing their investment.

Ask:

• Is development tied to your strategic growth plan?
• Is it structured and sustained?
• Does it include peer accountability?
• Is learning applied to real decisions?
• Are you seeing measurable capability shifts?

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A lot of leadership development programs will focus on the professional person, but they don’t bring in the personal aspect of it,” Van Remortel says. “We hire the whole person, so why don’t we develop the whole person. The younger generations expect you to invest in their professional and personal life, and if you don’t they will go to another company that does. Watch retention increase when you help them accomplish something important to them outside of work. Leadership development that doesn’t include the whole person just isn’t as effective.”

Leadership Development Investment Is a Force Multiplier

The strongest case for leadership development is not that it feels good or checks a box. It is that, when designed well, it multiplies organizational capacity. The question isn’t whether you should invest in leadership development. The question is whether you’re investing effectively.

When structured correctly:

• Leadership capability compounds.
• Risk decreases.
• Growth accelerates.
• CEO capacity expands.

Invest Wisely and Effectively in Your People

The real question is not whether leadership development deserves investment. It does. The more important question is whether companies are investing effectively. When leadership development is structured well, leadership capability compounds, risk decreases, growth accelerates, and CEO capacity expands. Business outcomes depend largely on leadership strength.

For CEOs seeking a structured, peer-driven approach to maximizing their leadership development investment, Vistage Leadership Development Programs offer applied learning, strategic alignment, and peer accountability that translate directly into stronger decision-making and execution. By turning leadership development into an intentional, measurable system, CEOs can transform investment into sustained organizational capability.

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