Your Leadership Development Budget Is Upside Down

Across industries, leadership development budgets continue to flow generously. Unfortunately, it’s mostly upward. Senior executives reap the benefits of high-ticket coaching programs, executive retreats, and customized development tracks. But what about the frontline leaders and mid-tier managers who shoulder the daily weight of execution, culture, and talent retention? If leadership is the engine of an organization, emerging and mid-level leaders are the gears. And too often, they’re underfunded and underdeveloped. 

The Imbalance in Leadership Spending 

According to Development Dimensions International (DDI, n.d.), 58% of organizations spend over $1,000 per learner annually on senior leaders, but only 17% allocate that amount to individual contributors or emerging leaders. These first-time managers, team leads, and rising stars are usually responsible for guiding and delivering strategic priorities. Yet they only receive a fraction of the resources devoted to senior and executive leadership. It’s a huge, missed opportunity. 

The Power of Middle Management 

Research shows that investing early in training and development yields disproportionately high returns. The Session Research Group found that first-time manager training delivered a 415% ROI annually, with measurable gains in team productivity, retention, and communication effectiveness (Training Industry, 2024). McKinsey (2024) also paints a compelling picture: Companies with high-performing middle managers achieved 3 to 21 times higher shareholder returns over five years. 

These employees aren’t just operational cogs — they’re the cultural stewards, strategic translators, and growth multipliers. 

The Case for Rebalancing 

If companies truly want to foster leadership pipelines, they must stop looking only at the top. Investing in early and middle management isn’t just equitable — it’s strategic. These leaders shape daily employee experience, drive innovation, serve as talent spotters and developers, and are often the first to identify risks or opportunities. 

Neglecting them leads to retention risks, underperformance, and a fragile leadership bench. And in times of uncertainty or disruption, strong middle management can be the deciding factor between adaptation and stagnation. 

What Needs to Change 

To transform leadership from a privilege of the few to a strength across the organization, companies must begin reimagining how they cultivate talent. Too often, leadership development happens reactively — offered to those who have already climbed the organizational ladder. But real transformation begins earlier. It begins with a deliberate commitment to the growth of those still rising. 

Early-stage leaders need more than generic corporate training or LinkedIn Learning subscriptions. They need tailored programs that hone emotional intelligence, build coaching capabilities, and help them learn how to make sound decisions under pressure. These aren't just nice-to-have traits — they’re the very skills that stabilize teams, fuel innovation, and shape workplace culture. 

Funding for leadership development should also reflect impact, not just seniority. Rather than pouring disproportionate resources into those already at the top, organizations must consider the ripple effects that a well-supported mid-level manager can create. 

Finally, leaders need a map. Too many emerging managers are promoted without knowing where they can go next or how to get there. Clear growth paths and ongoing mentorship signal that development is an expectation and a shared responsibility. 

Culture doesn’t change from the top down — it spreads from the middle out. And that’s precisely where organizational investment needs to go.

References 

DDI. (n.d.). ROI of Leadership Development. Development Dimensions International. https://www.ddiworld.com/blog/roi-of-leadership-development 

McKinsey & Company. (2024). Investing in middle managers pays off—literally. https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/investing-in-middle-managers-pays-off-literally 

Training Industry. (2024). Measuring the ROI of Manager Training: A Case Study. https://trainingindustry.com/articles/measurement-and-analytics/measuring-the-roi-of-manager-training-a-case-study/