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Mentoring: Why is it important to the bottom line?

Updated: Aug 21, 2023

Mentoring importance to the bottom line

Mentoring is a good thing, right? You are unlikely to find anyone who responds negatively to that question. Your next question might ask why it is a ‘good thing.’ At that point, you will receive many and varying responses. Professional development, employee retention, succession planning, and motivated colleagues are among the usual and largely correct responses.

A recent blog by Forbes (Does Mentoring Still Matter For Fortune 500 Companies?, May 2022) concluded that 70% of Fortune 500 companies have mentoring programs (96% of the Fortune 100). It seems that Fortune-listed companies think mentoring is a good thing.

Forbes has also, however, reported that while a majority of people think mentoring is important, only a minority have mentors (76% Of People Think Mentors Are Important, But Only 37% Have One, July 2019). Furthermore, a few minutes of searching with Google (and personal experience) will reveal that a much smaller percentage of small and medium-sized businesses have mentoring programs.

So, clearly, not everyone considers mentoring a good thing. Otherwise, they’d all be doing it. Wouldn’t they? If it is self-evidently a good thing, why do so few individuals engage in mentoring relationships, especially among small and medium-sized businesses?

Perhaps the ‘Why is it a good thing’ question is getting the wrong answers. I don’t think so. It is relatively easy to find research that supports the link between mentoring and employee retention, job satisfaction, career progression, and all those things people easily bring to mind when asked, ‘why is mentoring a good thing?’

Maybe a more prosaic but helpful way of thinking about it is to ask a different question. Why is mentoring important to the bottom line? If more people could make that direct connection, they may be more inclined to put mentoring on the agenda. Or if they are a potential mentee, they will be better armed with arguments to get themselves a mentor.

Linking mentoring to some levers affecting the bottom line

Many factors that affect the bottom line are obvious - the strength of the salesperson, the alignment of the product to customer needs, the ease of doing business with your organization, operational efficiency, and so on. Everyone sees these things as core to the business and easily justifies spending time on them.

Focus On The Bottom Line

However, there are many hidden costs hitting the bottom line, not always so visible in financial or operational terms.

Despite these being well identified in the literature and taught in business schools, correcting these doesn't get the same focus, the same level of enthusiasm, and the same level of management attention.

Using staff attrition as an example, John Hall points out in this article the very real and ‘sneaky indirect costs’ of staff turnover (The Cost Of Turnover Can Kill Your Business, Forbes, May 2019). Attrition negatively affects corporate memory - leavers take their knowledge with them. The knowledge can take years to be recovered. It inhibits activity as the new hire relearns what the leaver took with them.

Experienced mentors know where costs lie hidden. They give mentees license to spend time on these things, often advising on the best approach for doing so. Coaching here can realize value for the business by equipping mentees with the skills and curiosity to seek out the unseen (costs, risks, and opportunities).

Mentee performance

With a good mentor-mentee relationship (the building of which is one of the investments required in any mentoring program), mentoring can dramatically improve a manager’s self-awareness and develop an appreciation of how they are perceived by others. Mentors give feedback in a ‘safe’ environment and teach mentees how to elicit feedback from those they interact with, avoiding costly misunderstandings of goals and expectations with their manager or direct reports.

Speaking of safety, psychological safety is critical to individual and collective performance. “Psychological safety is defined as the belief that one will not be punished or humiliated for speaking up with ideas, questions, concerns, or mistakes.” (Amy C. Edmondson, "The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation, and Growth"). The sad truth is that the concept of psychological safety is not well understood within many organizations. This brings to mind one of the best definitions of Agile software development this author has heard: “Spending less time doing the wrong things.” The psychological safety that mentoring provides can have the same effect - a safe haven for mentees to test out ideas with impunity which allows them to fail fast, admit mistakes and reduce time on less fruitful activities.

Mentee performance is elevated when they, like all of us, have someone interested, listening, and encouraging. People will talk themselves towards a solution faster with a good listener, and a friendly critic, sitting opposite them. And a friendly critic is what we all need to hold us to account for commitments made, even if those commitments are just to ourselves.

Formal training can equip us with skills to do our jobs, but couple training with experience, and you multiply the value of the training. Mentoring allows mentees to accrete skills and experience from mentors - this is advanced training with a density of learning that traditional training often can’t deliver.

Mentors can say the unsayable. This can include a view on the suitability of the mentee for the role they are in or the company they are in. If there is a misalignment between the mentee and their role, mentors can facilitate a move without the pain and cost of performance appraisal hell. It is worth saying that mentoring should not be used as an excuse for poor skills in managers in relation to the professional development of their team, but the reality is that the external dimension of mentoring gives a more neutral perspective of employee/employer fit and can ease the path of corrective actions when needed.

Succession planning is an area where businesses start by identifying successors but then don’t follow through to ensure the successor is appropriately skilled and ready for the role they are lined up for. People in-role are not ideally placed to ensure someone else is ready to take on their job - there is an inherent conflict with the incumbent-successor relationship. A mentor provides the degree of independence needed to lift the chances of the successor fulfilling their new role.

Team performance

Every business owner looks for a strong team at the helm of their business. Individualism rarely works in management, yet many business leaders emerge at the top of their business, having built a mental picture of leadership that requires them to lead alone, with their team just being execution pawns. So often, the dynamics and benefits of high-performance teams are ignored, and while the means to developing them are outside of the scope of this article (some reading on that subject: 14 Characteristics Of High-Performing Teams, Forbes, Sep 2020), some of them are simpler than you’d think to implement (5 Things High Performing Teams Do Differently, Harvard Business Review Oct 2021). Mentors mentor teams, too - not just individuals.

Many societies at a national level now generally accept that any form of inequality, such as racial or gender, or disability-based discrimination, is an act of self-harm by limiting available skills and experience, and yet team inequality is mostly left unchecked. Mentor participation in team settings can teach a team to use all of its skills. Mentees can be coached into bringing their ideas forward, and in teams with some dominant personalities, that can be important in making sure that all skills in a team are being utilized. Team programs and projects find that they progress further and faster (which means better, sooner, and cheaper) when team members are fully engaged and utilized.

Mentors can have a more rounded view of leadership, one where a leader’s priority is to their team - equipping and supporting them in achieving the goals set down by the business.

Dysfunction in teams, causing loss of momentum, slow decision-making, stifled innovation, and many other team performance issues, can lie undiagnosed and unresolved. Mentors will see this more clearly and increase the chances of a fix to this pernicious problem. Moreover, they can equip teams with the means to self-diagnose and self-correct dysfunction in the future.

Business performance

Mentors will often spot problems earlier than those close to the problems, and their interventions can catalyze remedial actions earlier than would otherwise have been the case, lowering the time spent and costs of pursuing the wrong course of action (or indeed speeding up the grasping of an opportunity).

As an example, a specific challenge that organizations are grappling with in the 2020s is that of diversity, equality, and inclusion (DEI). It is easy to find statistics for the underrepresentation of various employee populations in organizations globally. McKinsey published a series of insights, Why diversity matters, Delivering through diversity culminating with Diversity wins: how inclusion matters linking diversity to financial performance. Management teams are, it seems, still not equipped to address this problem. It is more likely to be picked up by an external party than a management team as mentees are more likely to vocalize where lack of DEI is a blocker to them in the safety of a mentor-mentee relationship.

Manager-Mentor performance

We should not limit our mentoring discussions to just those mentors who are from outside of the organization. Mentors can also be insiders. Internal mentors can provide similar value, but additional care is required in formulating the mentoring program to address the potential risks of privacy breaches and environmental bias (lack of independence) of mentors.

Internal mentors may also learn something from the process. As they learn about mentoring and become more experienced, it can make them better managers.

Limitation of Evidence

Finally, there is a need to be circumspect about the returns from mentoring. In a blog post entitled Business mentoring - How strong is the evidence? Eszter Czibor (Department of Economics, University of Chicago) raises a cautionary flag - the evidence supporting business improvement as a direct result of mentoring is limited (in terms of the number of studies), and the evidence can be weak - meaning that observed improvements could just as easily be attributed to a correlative factor, rather than a causal one. The conclusion here is that there is a need to constantly appraise where performance improvements are coming from in any organization. Mentoring should therefore be an active investment, subject to ongoing analysis of returns.

While there remains a large body of anecdotal evidence pointing to the improvements in the bottom line as a result of mentoring - more formal studies are needed to quantify it.


Shifting the angle of observation of mentoring from a purely human performance matter to one that has a viewpoint of the bottom line will provide additional insight and motivation to take mentoring seriously and reap its rewards.

Implementing a wide-ranging mentoring program not only helps mentees but can significantly impact the bottom line.

This doesn’t just apply to the management team’s view of mentoring. Those investors with a track record of fully supported and well-executed mentoring programs in their investments find their portfolio will outperform those that don’t.

Investing in a mentoring program requires the same level of commitment and outcomes analysis that any other type of investment does.

Mentoring is a good thing, right?


About the Author

Neil Walker has over 35 years of information technology experience across varied industries and organizations in Europe, the US, Asia, and Africa. This includes 25+ years leading software engineering, customer service, and infrastructure teams, at commercial and public sector organizations, to IT Director level, including at startups and in large corporations.

Neil has an MSc (Database & Information Systems) from Birkbeck College, University of London, and a BSc (Computer & Management Sciences) from the University of Warwick.


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