Future-proofing an organisation is not an easy task for UK business leaders, particularly with Brexit looming on the horizon and the implications of leaving the EU still relatively unclear. To make matters worse, the country is in the grips of a long-standing skills and productivity crisis, further threatening the stability of organisations and the wider business environment. “Why good leadership is essential for managing change” – Contributor David Willett, Corporate Director – The Open University.
The Chartered Management Institute recently found that poor management could be costing the UK as much as £84 billion in lost productivity every year. This figure is particularly worrying when served with the reminder that the Institute for Fiscal Studies predicted a loss of £75 billion a year if the country were to leave the single market.
It’s clear that increasing leadership and management skills is crucial to our economy, but strong leaders are also essential for steering organisations through this uncertain and trying time – only those that invest in their workforce can survive and thrive.
The key to effective leadership
Many roles in the UK jobs market are expected to change over the next few years, which means that business leaders must become all-rounders; able to adapt to changing economic, political and technological climates.
Increasing automation and digitisation are likely to have the most significant impact on the workforce, with the Institute for Public Policy Research recently suggesting that machines threaten jobs worth up to £290 billion in UK wages, both creating new roles and making others redundant. An agile business must be led from the top, with those in leadership positions being capable of implementing new technology, processes and procedures, and also communicating change effectively to staff without damaging motivation, retention and productivity.
This requires an understanding of project, operations and organisational management, change management, finance, marketing and managing people – skills that can be difficult to obtain from on-the-job learning alone. And yet, the nature of many organisational structures sees that many talented and experienced workers are promoted to management positions with little or no training in leadership.
While it may seem reasonable to reward hard work and dedication with promotion, the effects of giving responsibility to an employee without adequate training could be detrimental to both the individual and the organisation as a whole. Even with years of experience, there are likely to be areas of leadership where an employee is lacking. For example, for those in more practical roles, finance and marketing knowledge is unlikely to be gained on-the-job, making further training in these fields imperative to protecting and growing a business.
Well-trained and experienced leaders can relieve pressure on other teams too, such as Learning and Development or Human Resources. Strong leaders will be able to highlight training needs in more junior members of staff and lead by example, to teach them skills and build knowledge, bringing potential cost savings to their organisation.
Meanwhile, poorly trained leaders can hold back ambitious organisations, limiting their agility and ability to embrace new advancements. A price not worth paying, particularly when opportunities like the apprenticeship levy make the decision to invest in leadership training an easy one.
The apprenticeship opportunity
Since April 2017, large employers have had to spend 0.5 per cent of the total cost of their payroll on the apprenticeship levy, which can be recouped for apprenticeships in their organisation. Undoubtedly, the levy provides the opportunity to develop the skills that are currently lacking in the workforce, but a significant number of organisations believe this training is limited to the junior members of a team.
With new degree and master’s-level apprenticeships, funding can be used to grow the skills of those already in the workforce who are working towards senior management and leadership roles. And there is a proven financial benefit to developing existing talent, as recent research from Pearl Meyer revealed that CEOs from FTSE 100 companies who were promoted internally added six per cent more value to the business, while earning 20 per cent less than those who were hired in. People are more engaged and are also more likely to be loyal to their employer.
Work-based learning also allows staff to apply their new knowledge directly to their organisation, which means they will be able to develop new ideas and strategies throughout their training – benefitting the organisation right from the start, while a new hire would still be learning the ropes.
While work-based training has traditionally been inflexible, with lectures and sessions restricted to certain times or days, the Internet and technology-enabled learning means that future leaders can access training more readily. This allows apprentices to fit learning around other commitments, ensuring that they are able to learn while maintaining their productivity and effectiveness within the organisation.
So, in practice, apprenticeships provide the best of both worlds for conscientious employers, looking to draw upon the experience of valued and loyal employees, but developing their skills to ensure they are capable of driving the business forward and adapting to change. Through training, organisations can strengthen their leadership capabilities, future-proofing them against the challenges ahead.
 Chartered Management Institute (2017) Management Manifesto