Organizations are more aware than ever of the need for strong, capable leaders with outstanding interpersonal skills. Leadership development programs can help provide them.

What is leadership development?

Leadership development usually involves a company nurturing and progressing its senior leaders through a structured program. These programs allow people to improve their leadership skills and can be helpful for leaders and managers at all levels. They’re also crucial for nurturing the leaders of tomorrow.

Programs often include a mix of traditional training sessions and initiatives like mentoring and coaching. A big part of the training focuses on personal development, but there are also elements of organizational development and learning skills like critical thinking and collective leadership.

Organizations recognize the importance of leadership development – most of them invest in it at one time or another. Pre-pandemic, 94% of companies said they were planning to keep or increase their leadership development budget.1 And the need for a strong presence at the helm post-pandemic is likely to push leadership development even further up the agenda.

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But, despite the ongoing investment, some of the programs on offer aren’t yielding the expected results. Harvard Business Review found that ‘more than 50% of senior leaders believe that their talent development efforts don’t adequately build critical skills and organizational capabilities.’

So how can an organization ensure ROI on their leadership team development efforts? Experts think it comes down to a combination of:

  • Highly contextualized and tailored training

  • Making time for consolidating learnings

  • Robust impact measurement

Why is leadership development important?

Why is leadership development important?

Successful leadership development programs can benefit individuals, teams, and companies. They can also map directly back to financial performance. But the impact team leadership development can have on morale, commitment and purpose is even more critical.

Sourcing talent from within the organization

The most successful businesses have a leadership pipeline or leadership bench. In other words, they know how to source talent from within rather than always hiring externally (with all the expense and hassle that brings). To help keep the personnel pipeline healthy, training leaders to identify and nurture internal talent is a significant leadership development goal.

Reducing churn

The churn rates aren’t pretty. Up to 70% of senior leaders placed into new roles fail. This is costly, not just financially, but also because of the burden it can put on staff morale and brand reputation.

Leadership development can help reduce this leadership churn – especially if the program includes mentoring. DDI found a 20% lower leadership turnover when a workplace has a mentoring culture.2 And, of course, having a great leader in place helps organizations hold on to talent at all levels.

Improving financial performance

Leaders that are in tune with people, the broader company and its sector are more likely to deliver financially. So successful operations leadership development programs can have boost financial performance. But it’s not just about developing people in the senior leadership team.

The DDI research found that when companies expand their leadership development programs to lower ranking levels, they’re four times more likely to outperform financially.

Helping steer organizations through times of change

Being able to navigate through times of crisis is in the spotlight following the pandemic. Leadership development programs that focus on collective leadership can help hone this skill.

When you can train leaders in collective leadership, they can work and problem-solve collaboratively. That leads to better decision-making and a greater ability to anticipate and respond to change proactively, not reactively.

Improving leadership diversity

Senior women are more likely to consider leaving their role for another opportunity than senior men - a number that’s increased during the pandemic, particularly among mothers. So developing and nurturing women leaders - and keeping them engaged - should be a business priority.2

Another area where leadership development can help diversity, equity and inclusion, is to help managers learn to look beyond ‘the norm’ when hiring externally and promoting internally. Great leaders tend to sidestep the common trap of only recruiting in their image.

Improving accountability

Leaders need to think of their career objectives the same way they do any other business goal. That means creating a clear, robust development plan, taking responsibility for it, and being accountable for their own leadership development goals. This strategy can increase loyalty and reduce churn too.

Improving employee engagement

Employee engagement and leadership are significantly linked. Essentially, if you have the right managers in place, your employees will feel inspired and engaged. Taking regular pulse surveys can help identify dips in engagement and give leaders the chance to respond quickly and effectively.

What is a leadership development plan?

What is a leadership development plan?

Until recently, corporate leadership development plans were generally a one-size-fits-all model. But the disappointing ROI for these programs shows that you should tailor development plans to individuals. The move towards virtual and hybrid learning programs as a result of the pandemic and wider globalization can make this easier (and make training universally accessible).

It’s also important to tailor your plan to your demographic. Millennial and Gen Z managers, for example, are more comfortable with self-directed learning than previous generations. They’re also keen to try newer methods of learning and development like:

  • Self-paced learning

  • Group learning

  • Immersive learning

  • AI-powered learning

What is a leadership development program?

What is a leadership development program?

So, what does a good leadership development program look like and what skills areas should you include? Here are three of them.

  • Communication skills

    Communication skills are key when it comes to developing inspiring leaders. This has always been the case, but now soft skills like empathy, emotional intelligence and building trust are critical in leadership development.

    Giving feedback is another area that team leaders need to master, particularly for Millennial and Gen Z employees who thrive on real-time feedback and strategic recognition. For example, some people like a quick shout-out on social media when they’ve achieved a goal. A great leader knows how to tailor their feedback for best results.

  • Coaching

    Experts see coaching as a key component of leadership development. Not only does it empower leaders and improve their skill set, it can also increase accountability to the company and decrease leader turnover. Despite its benefits, DDI found that only 11% of companies extensively use peer coaching as a learning method. This presents a clear opportunity for businesses.

  • Mentoring

    Mentoring is another key item in the leadership development toolkit. And that goes for senior managers and junior leaders who may be at higher risk of leaving. Mentoring can work formally – where mentors and mentees sign a contract – and informally.

    But either way, the key is to match people purposefully rather than at random. For senior leaders, matching them with an external mentor has been shown to lead to a lower turnover than with an internal mentor.

Leadership development
5 tips for successful leadership development

5 tips for successful leadership development

So what should you look for in a leadership development program and how do you set leadership development goals? Get started with these five tips:

  1. Think outside the box

    Dare to be different when it comes to the format of the leadership team training. Particularly important if you’re working with Millennial and Gen Z leaders or leaders of the future.

  2. Allocate adequate time and budget for reflection

    Stats show that people forget up to 70% of training content after just one day.3 So make sure you factor in time to allow for the consolidation and embedding of new skills.

  3. To make learning stick, make it radically relevant

    You should tailor it to the specific scenarios and challenges your leaders may face in the business, as well as in your industry, right now

  4. Don’t go for one size fits all

    Hyper-bespoke leadership development plans can help counteract the risk of leaders leaving the organization post-training.4

  5. Measure the impact

    Plan well in advance how you will measure success and don’t just tag measurement on at the end. This will help make sure you stay aligned to business goals and have something to prove the ROI.


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And finally, remember that a great organization nurtures all its staff, not just its senior leaders.

1 "Follow the Leader(ship) Spending" Chief Learning Officer, 2018.
2 "25 research insights to fuel your people strategy" DDI World, 2018.
3 "10 Stats About Learning Retention You’ll Want to Forget", 2017.
4 "It’s the organization that is wrong’: Exploring disengagement from organizations through leadership development" Sage Journals, 2019.
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