How Leadership Development Will Make or Break Your Business—And the Gen X Leadership Effect

If you’ve been wondering whether leadership development is still worth the investment in 2025, the answer is: only if you care about survival.

Let’s start with the blunt truth: 75% of organizations say developing leaders is critical to their future, yet only 11% feel they have a strong bench of ready leaders (DDI Global Leadership Forecast 2023). It’s a leadership drought, and it’s hitting just when we need rain the most.

Companies are facing a triple-whammy: economic pressure, relentless change, and the largest workforce transition since the boomers left disco. In the eye of this storm stands Gen X—yes, the “forgotten generation”—quietly holding up the tent.

And here’s where it gets interesting.

The Gen X Factor: Overlooked, Overdue, and Overqualified
Gen X (born 1965–1980) is the leadership backbone of today’s organizations. They hold over 50% of leadership roles, yet they receive significantly less leadership development than their Millennial and Boomer counterparts (Harvard Business Review). They're often viewed as the 'safe pair of hands'—so they get left alone while we obsess over onboarding Gen Z or ushering Boomers out the door.

But Gen X isn’t just competent—they’re uniquely positioned to lead in today’s chaotic climate. Here's why:

• Resilient: Raised on latchkey independence, recessions, and analog-to-digital transitions, they’re adaptable by nature.
• Skeptically optimistic: They won’t drink the Kool-Aid, but they’ll build the distribution system if the vision is sound.
• Tech-aware, not tech-obsessed: They can bridge the AI-native Gen Z and the digital-immigrant Boomers.
• Team-first mindset: They lived through toxic hierarchies and know the value of psychological safety.

But here's the rub: if organizations don’t invest in developing this generation now, they’ll lose a key stabilizing force just as Millennials and Gen Z clamor for leadership roles they may not yet be ready for.

The Cost of Ignoring Leadership Development
Leadership development isn't just a nice-to-have. It’s a performance lever. According to McKinsey, companies that invest in leadership development are 2.4 times more likely to hit their performance targets. Conversely, poor leadership is the top reason employees quit—and turnover is getting costly.

A recent Gallup report pegs the cost of replacing an employee at 1.5 to 2 times their annual salary. Multiply that by a disengaged team? You’re bleeding money.

And here’s the kicker: 70% of the variance in team engagement is tied to the manager. (Gallup again. They’re kind of the Beyoncé of workplace stats.)

So, when we say leadership development will make or break your business—we mean it literally.

The New Mandate: Human-Centered, Performance-Driven Leadership
In an AI-enhanced, hyperconnected workplace, technical competence is table stakes. What separates effective leaders now? Empathy (make that professional compassion.) Communication. Psychological safety. Decision-making in ambiguity. Leading across generations and difference.

This isn’t soft stuff—it’s power skills. And Gen X leaders, given the right support, are primed to model them.

But support is the key word. That’s where most organizations fumble. Too many leadership programs focus on content over context, one-off workshops instead of long-term behavioral change, or confuse coaching with therapy.

To build leaders who can actually lead, organizations need to:

1. Invest early and often – not just for the next generation, but for your current ones.
2. Provide actionable tools, not vague inspiration.
3. Create communities of practice, where leaders can reflect, experiment, and grow together.
4. Hold leaders accountable—because if you don’t measure leadership, it won’t matter.

What High-Performing Companies Are Doing Differently
Organizations winning the leadership game share a few key practices:

• They embed leadership development into everyday work. It’s not an event—it’s a habit.
• They connect it to culture and strategy, not just competency models.
• They use leadership cohorts to break silos and build cross-functional trust (hello, LEAP!)
• They develop middle managers as multipliers, not bottlenecks.

As for Gen X, smart companies are doubling down on their development—not because they’re the squeaky wheels, but because they’re the engine. They’re the mentors Millennials need and the role models Gen Z deserves. And with the right investment, they can be the glue that holds your culture together in times of turbulence.

Your Leadership Future Starts Now
If leadership is your competitive advantage (spoiler: it is), then waiting to invest is like watching your roof leak and saying, “We’ll fix it when the weather clears.”

Leadership development isn’t a luxury line item—it’s your organization's life jacket. And Gen X may just be the crew that gets you through the storm, if you equip them well.

So here’s the call to action:  Develop your leaders like your business depends on it—because it does.

Want to learn how to activate the Gen X (Gen Y or Gen Z) effect and build a leadership culture that scales? Join our next LEAP cohort or attend our Executive Briefing: Operationalize Professional Compassion. Because thriving organizations don’t just have competent managers—they have courageous, compassionate leaders.