The balance between competing priorities.

I just received the recent HBR for November and saw an interesting article on "What makes Analysts say Buy"?  The article highlights the factors that drive analyst buy recommendations across Asia, Europe, the US and Latin America.  Of the 12 factors that are rated from low to high importance. There were only two factors in the Very High Importance category that were consistent across 3 out of the 4 regions. In Asia, Latin America and the United States it was Projected Industry Growth and for Asia, Europe and the United States it was the Quality of Top Management.  It really highlighted to me the importance of building leadership. 

One of the challenges organisations face at the moment is their need to balance short term priorities such as taking costs out of the business whilst at the same time preparing for the future by building leadership capability. We see organisations at the moment taking costs of the business and one of the first things that is cut is their people development budget.  The implications of this may be a drop off in employee engagement in the short term but longer term there may be a drop off in the quality of leadership. 

Given that the quality of management is an important factor in valuing a business organisations need to get smarter at developing future leaders that doesn't involve spending $.  One key way of doing this and it costs nothing is coaching.  We know from research that most people learn from on-the-job experiences and if managers can be more intentional about their coaching then we know from experience there area a number of benefits.  First, it can result in an increase in the effectiveness of the relationship between the manager and the employee and second, an increase in the employees learning agility.

So even though organisations are taking costs out of the business it does not mean development takes a back seat.  It is equally important to build future capability and one cost effective way of doing that is through coaching process between the manager and staff member.