The Definite Guide to Leadership Development

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Leadership development is big business and an essential part of many organizations’ human resources. In the US, over $15 billion is spent by companies on leadership development programs. But what is the practice about? In this guide, we’ll look at the definition of leadership development and the reasons you should take it seriously.

As well as examining these obvious benefits, we will also study the possible drawbacks of implementing leadership development programs, before introducing the two most common approaches used within the field. Finally, we’ll outline the five key steps you and your organization should take when considering leadership development.

THE DEFINITION OF LEADERSHIP DEVELOPMENT

To understand leadership development, it’s essential to examine what the concept means. You can understand leadership development by analyzing the two separate concepts at play here. First, the concept of leadership refers to, “the ability of a company’s management to set and achieve challenging goals, take swift and decisive action, outperform the competition, and inspire others to perform well”, according to Investopedia. Essentially, it is about a team of people or individuals being able to provide the motivation and inspiration for subordinates to achieve specific objectives. You then have the concept of development, which is about “the act or process of growing or causing something to grow or become larger or more advanced’.

Therefore, leadership development is about expanding a person’s ability to perform as a leader. It’s about teaching a person about leadership and the skills and qualities required to be an effective leader. Therefore, the focus is on essential leadership skills such as the ability to communicate, motivate and inspire others. It will provide the person with new resources and tools to use in order to lead and manage a group forward. In leadership development, people are provided with the tools to make better decisions and to take accountability of their actions.

As we will discuss later in the guide, leadership development can technically be about personal growth, achieved through self-awareness and study. But more commonly, leadership development refers to specific programs, organizations provide for their employees. These programs can be provided for individual employees or whole groups and often are provided to employees at different stages in the organizational hierarchy. Typically, the programs are aimed at employees who are not yet accustomed to leadership and who have not held leadership positions in the past.

WHY DOES LEADERSHIP DEVELOPMENT MATTER?

Leadership skills are not a magical trait you either have or you don’t. More importantly, efficient leadership is not something you can read a book about and after you’re done, claim you know everything about leading. Therefore, development of leadership is essential and unavoidable.

If you are to become a great leader and to achieve your vision, you need to continue on the path of leadership development. To understand the importance of leadership development on a personal level, watch the short clip below of leadership coach Lee Ellis describing the challenges of leadership development:

Aside from the obvious personal need for leaders to focus on leadership development, there are underlying business benefits to the use of the training within organizations. In its essence, leadership development is vital for business success. The statement isn’t just hot air either, as studies back up the idea that you can improve your business performance through leadership development.

A report, conducted by the Center for Creative Leadership, identified four key benefits to establishing a leadership development program. These include: boost in financial performance, enhanced ability to attract and retain talent, creation of a better performance culture, and increased agility within the organization.

Boosts financial performance

The study examined organizations that used leadership development programs and compared the results with organizations that didn’t have these programs in place. According to the findings, 65% of businesses with on-going programs showed improvement in business results. The study also highlighted the impact of leadership development programs to a company’s bottom line.

The positive effect has also been proven in 2007 by Laurie Bassi and Daniel McMurrer. They showed in a study published by Harvard Business Review how there’s a positive link between leadership skills and the business’ financial performance. The businesses, which focused on the development of personnel, delivered stock market returns around five times higher compared to companies that didn’t place as much emphasis on leadership development.

Enhanced ability to attract and retain talent

The report highlighted leadership development programs positive impact on the hiring of talent. According to research by Bersin & Associates, identified by the report, developing internal candidates through these programs is more effective than simply trying to find external talent. The internal development is beneficial because the candidates are already accustomed with the business and this can cut overall costs by limiting the need of training and recruitment.

The programs can have an impact on both attracting and retaining talent. Existing employees might be more interested in staying committed because the business shows real commitment in keeping them in. Furthermore, leadership development will help the employee gain access to new positions within the organization, providing new challenges that help motivate the employee. Essentially, these programs can act as a powerful tool to engage the workforce more. It can help clarify the company’s vision and give the employee a stronger sense of being part of the vision for the future.

Having a leadership development will also make recruitment of new talent easier. Talented individuals are given an extra incentive through these programs because it can match their career ambitions. Again, the knowledge of the company showing interest and commitment can be a strong motivator for applying for a position.

Drives a better performance culture

Aside from the above, the implementation of leadership development programs can enforce a stronger performance culture within the organization. The report quotes the study conducted by Bersin & Associates, which states:

Leadership development is not just about developing leaders – it is about creating a culture of performance. There is a relationship between good management and employee commitment. Great leaders attract, hire and inspire great people. A mediocre manager will never attract or retain high-performing employees.”

An organization that focuses on leadership development will also show enhanced understanding of leadership culture. Having a program to develop future leaders, the organization is also creating a framework of leadership, which will strengthen the business culture. It focuses the organization’s vision and therefore, helps create processes and functions that work towards the objectives in both short- and long-term.

The implementation of leadership development programs can create a culture of coaching, which will further the performance of the organization. The participants of these programs will learn new skills, which they can share with their subordinates or team members and therefore spread the message even with people who might not currently be part of the program. Being coached can instill a spark of teaching others.

Increased agility within the organization

Finally, the report identified the benefit of improved organizational agility. 86% of organizations, which are implementing leadership development programs, are better equipped to respond to market changes. On the other hand, within organizations that don’t have these systems in place, only 53% can respond rapidly to turbulence.

These programs boost agility because they provide organizations with keys to respond to challenges internally. Finding a new leader to takeover a new project will be quicker internally than starting a recruitment process externally, for example. Having a strengthened workforce, in terms of skills and leadership abilities, will give the organization more resources to respond with ease.

The leadership development programs tend to focus on strengthening people’s individual talent and leadership qualities. Therefore, they are not going to provide homogenous leaders, but a group of leaders with a wide-ranging ability and philosophy of leadership. This type of diversity can further boost an organization’s agility, as it creates more innovative ideas and solutions. The internal options for combating a problem or responding to a new challenge are varied and the collaborations between these new approaches can be fruitful to an organization.

WHY ARE BUSINESSES THINKING TWICE ABOUT IMPLEMENTING THESE PROGRAMS?

While there are obvious advantages to leadership development programs, plenty of organizations are still not convinced about implementing them. The organizations tend to quote the following three as the main cause for concern: takes time to implement, it adds additional cost, and ineffective results.

The program takes time to implement

Perhaps the strongest argument against leadership development programs is the time it takes to properly implement one. An effective program is not something a company can achieve overnight, especially in terms of when the benefits become apparent.

A 2013 survey by Brandon Hall Group, entitled Leadership Development Benchmarking, showed that only 18% of leadership development programs in place for less than two years were considered to provide effective results. The percentage increased to 38% when the programs were in place over five years. Therefore, the programs are not a quick fix to company problems and the benefits are not short-term advantages.

The program adds additional costs

Companies always need to consider the bottom line and any additional costs must always be carefully taken into account. Therefore, leadership development programs tend to cause concern for organizations because they can be seen as another avoidable or unnecessary cost. If you consider the point above about the benefits taking a long-time to kick in, organizations can be wary of the initial cost.

A study from 2012 showed how American companies spent nearly $14 billion every year on these types of training schemes. In another study done by The Association for Talent Development in the US, the 340 organizations examined spent, on average, $1,208 per employee on different training and development schemes.

The program might provide ineffective results

Finally, implementing a leadership development program within an organization doesn’t automatically guarantee effectiveness. Having a training scheme in place doesn’t mean the employees participating in it are going to learn or be able to use the knowledge for the benefit of the organization.

This becomes evident if you consider the findings of one study, which found adult learners forgetting almost 50% of what they learn in a lecture setting after just two weeks. Since the program takes time to provide results in the first place, not receiving any long-term results can be devastating for the organization in terms of financial cost and wasted talent.

The above concerns are not automatic disadvantages of leadership development programs, but the possible consequences of improper implementation. Therefore, if a company wants to avoid and overcome the above problems, it has to focus on what type of program it is using and how it is implementing it.

For example, in terms of costs, different leadership development programs can differ greatly. Things such as the type of program and the size of the group can cut down or increase the costs in an instant. By planning and researching the program, the organization can influence the amount of money it has to spend. If proper care is taken in terms of choosing the right program, carefully implementing it, and continuous evaluation of the impact the program is having, the organization can overcome the above three challenges.

TWO APPROACHES TO LEADERSHIP DEVELOPMENT PROGRAMS

There are essentially two major approaches to leadership development and the training programs. You can either opt for individual leadership development or for collective leadership development of people. We’ll examine both of these approaches and discuss the benefits and drawbacks of each.

Developing individuals

Focus on individual leadership development has been the preferred option for a long time. In this traditional model, the leadership development is based on an individual, with the aim being the strengthening of the person’s skills and traits. It’s about changing the person’s attitudes and abilities in terms of leadership and helping them become a better leader through personal coaching.

Individual leadership development can use tactics such as one-to-one mentoring, questionnaires, the use of books and other such resources, as well as attending different workshops. The key to these types of leadership development programs is its focus on the individual. The objective is to identify the person’s strengths and weaknesses, finding a leadership style that suits the person’s traits.

The advantages and disadvantages of the approach

The focus on developing and coaching an individual does have it’s own set of challenges and advantages.

The benefits

The biggest benefit of utilizing individual development plans is its ability to provide undivided attention to the person. The enhanced focus means the person has better access to resources and can have more time with the coach, which can help develop the person’s skills quicker. If the person has questions or problems, these can be dealt with a more personalized approach and often quicker than if a whole group is being developed.

Furthermore, the program will always be tailored around the specific needs and requirements of the person. Therefore, attention is given to the weaknesses the person has and less time is spent on improving leadership areas the person is already good at. For example, if the person has great communication skills, but lacks in confidence to speak out, the leadership development can better identify this and then focus on improving the traits that require improvement.

Overall, the program will help the person develop a leadership philosophy and approach that suits their skills and personalities. Not all leaders are alike and you can be an effective leader even though you implement different strategies to other leaders. An individual leadership development plan will better able the person can pursue a style that fits them rather than opt for a blanket framework, which might not complement their current abilities and personality.

The drawbacks

But the individualistic approach can have its drawbacks as well. Implementing an individual program within an organization can be a cumbersome process, as well as complicated to administer. If a number of employees are involved, it will require a lot of planning and resources to provide them all with individual leadership development. The amount of administrative work will be rather high, with the cost of individual training schemes often being higher than group schemes.

In addition to the difficulties in implementation and higher costs, the individual leadership development plan could potentially lead to mixed messages within an organization. Since each participant will develop a leadership approach that fits his or her personality and traits, the organization doesn’t create a continuum of leadership culture. Different leadership styles will create different types of business cultures.

For example, autocratic leadership will have a more hierarchical view to decision-making than laissez faire. Therefore, the leaders the programs develop might have a different view on how the organization should develop. This can be challenging for an organization to handle and deal with.

Developing people collectively

A more modern approach is to implement an organization-wide program. The collective leadership development programs don’t look at individual employees, but provide training for a whole group at once. It doesn’t mean there is no attention to an individual’s strengths and weaknesses, but instead of emphasizing the training of these traits, the focus is on developing the interpersonal abilities to get the group working appropriately.

The advantages and disadvantages of the approach

Similar to the individual leadership development, collective programs have their strengths and weaknesses, which the organization must carefully consider beforehand.

The benefits

Compared to the individual training schemes, collective leadership development programs are much easier to implement. You don’t need to do as much assessment or planning, as you are simply implementing a single program within the organization. The cost of these programs can be smaller since you don’t need to provide as much individual training.

The other major benefit is the creation of a common business culture in terms of leadership. The collective approach will help the organization develop more easily a coherent look of what kind of leadership they want. The organization’s vision, values and goals will be at the centre of the leadership development and at the heart of personal development. In the long-term, this type of approach can yield strong results in terms of leadership succession.

The drawbacks

The downside is the lack of individual focus, which means people’s specific skillset and personalities are not necessarily used. This means a person might end up developing leadership skills that don’t fit their personality or which won’t take advantage of the person’s strengths and weaknesses. Therefore, people might end up focusing on aspects they are already rather skilful or create strategies, which they don’t necessarily fully subscribe to in terms of their personal values.

Finally, a blanket solution can increase the risk of wasting resources without receiving efficient results. As discussed in the previous section on the concerns companies often have, opting for a collective approach to leadership development can place the organization’s eggs in a single basket, so to speak. You are hoping to develop a group of future leaders, but if the program doesn’t work, you have just created a group of ineffective leaders. Opting for a collaborative program will require careful planning to avoid this drawback.

HOW TO APPROACH LEADERSHIP DEVELOPMENT

To make the most of leadership development, you need to plan for it carefully. As mentioned in the earlier section, you can minimize the risk of failure with a leadership program if you take the appropriate steps beforehand. In the final section, we’ll provide you the five essential steps you need to take to guarantee your leadership development is effective in achieving the benefits.

Step 1: Define your business’ understanding of leadership

Before you Google ‘leadership development programs’ and pick one for you or your organization, you need to consider what leadership means. It is essential to outline the importance of leadership, the meaning of leadership and the objectives of leadership development before signing up with a specific course.

While leadership development is about enhancing your understanding of leadership and the skills required to lead, you need to have an organization-wide understanding of it before you can start with improving your knowledge on the topic.

Defining how your business understands leadership is best achieved by answering the following questions:

  • What does the business value the most? Outline the key values that define your organization and the work that you do.
  • What is the business culture you want to build success on and what are the behaviors you think will help in achieving this? Every business needs to have a set of beliefs guiding its work and you must be able to identify this and figure out the behaviors and actions that deepen this culture instead of hindering it.
  • What does leadership mean to the business? You need to define the behaviors and actions that show leadership in your business context. You can consider this both in terms of the current leadership and the ideal leadership.
  • What does good and effective leadership look like? The question looks deeper into your business’ ideal leadership framework. Don’t answer the question generically, but focus on looking at the models of behavior and the processes needed to create an effective leadership in your specific organization.
  • What do you want to achieve with the leadership program? You also need to outline the objectives you want to achieve with leadership development. Go into detail and set tangible goals, rather than overall aims such as “improving leadership”. Focus on facts and numbers of what improvement looks like. For example, you might want to improve retention rates by 5% after implementing the leadership development plan.

You need to essentially define what the journey will look like and where the end station is before you take the first step. You can’t expect positive results from any type of development plan if you aren’t even sure what these results would look like. Furthermore, defining leadership and the leadership development objectives will make it easier to find a suitable program. If you are aware of what leadership looks like and you know what the organization is looking for, you can pair up with a service provider (a mentor or a training scheme) that is able to provide you help with these specific objectives.

In addition to an overall definition of leadership and leadership development ideals, you also need to consider the specific needs of different levels of the organization. If you are looking to implement an organization-wide leadership development plan, the different parts might have varying needs.

As an example, the middle management level would probably focus more on pragmatic and result-driven goals compared to the executive level. Therefore, the ideal leadership can look different depending on the hierarchy and the specific company position and you need to consider this when defining what effective leadership development would look like.

Step 2: Pick the tools that support your goals and define objectives

Once you’ve defined leadership and briefly examined the objectives your organization has for leadership development, you can delve deeper into finding the right resources to support your goals. Before you start looking for resources, ensure you have written the objectives down. To help define your objectives, answer the following questions:

  • What are the key things you want future leaders in your organization to accomplish?
  • What are the main behaviors you want the future leaders to show?

Remember the answer to the above questions, as well as to your business’ values, is not a list of universal points. Each organization will want different things from leadership development, just as each individual will get different things out of the programs. Therefore, a start-up would most likely what to achieve something different to an established business struggling to stay relevant.

Furthermore, the business culture is often built on different things. One company might put customer satisfaction at the centre, while another might be all about sustainability and eco-friendly solutions. The two first steps are something each company has to do on their own. Mark Murphy, chairman and CEO of Leadership IQ, perfectly captured this idea in an Inc. interview on leadership development. Murphy said,

One of the things that hurt the leadership industry is the idea that there are 10 or 12 skills that magically work for everybody. That’s not how the world works. It’s a variety of skills, a variety of styles.

When you are defining the objectives for the organization, you need to consider the specific aspects of the business and the industry. Don’t set goals that are not achievable for your organization. Setting sustainable and achievable leadership development goals is similar to setting business goals. You can use the below image as an example:

SMART Goal Setting in 5 Easy Steps
StepMnemonicDescriptionSmart GoalCriteria met?
1SpecificWhich, what, who, where, when, whyIncrease sales turnoverYes
2MeasurableHow much or how manyto a minimum of $1000 per monthYes
3Action orientedDescribe a resultSales turnover increasedYes
4Realistic & RelevantRealistic and relevant to the individuals business?Determined by the business owner. This decision would need to take into account current sales turnover and the time frame between now and the target date to achieve the desired increase.Yes
5Time basedBy whenBy 15.03**Yes

Source: Network Marketing blog

With the goals defined, you can start looking into the different leadership development options available. As mentioned above, the most common options are individual-focused programs and organization-wide programs. Depending on the size of the organization, you could also integrate a leadership development program into the fabric of the business and have in-house staff as coaches, but it’s also possible to hire an external training scheme.

The leadership development programs also range on the length. Certain organizations implement these practices in the long-term, while others might opt for a limited time period. It’s essential to examine the different options and find the one that best suits the organization’s objectives. Finally, the resources and tools also include things such as books, questionnaires, monitoring software and so on.

Step 3: Get top-level to buy-in on the program

For organizations, one of the key components to successful implementation of a leadership development plan comes from getting everyone involved. Not only does this mean identifying the right people to participate in the program, but also getting the top-level executives to buy-in in the training scheme.

First, let’s look at the importance of having the leaders involved with the scheme. The leadership development plan has to be part of the CEO’s or leader’s priority and not implemented by lower level management. If the leader isn’t interested or involved, then it’s hard to guarantee results.

The difficulties of not having a buy-in will manifest in two ways.

First, if the top-level executives are not involved, the program will face difficulties in terms of time and money. Getting the top-level executives involved can guarantee more time is allocated to leadership development because the organization’s top leaders feel the project is an important part of improving the business’ bottom line. Commitment to the cause will also be likely to provide more resources for the program. When leaders are committed to the development scheme, they understand the value and are, therefore, willing to invest resources to it.

The second crucial reason involves setting an example. Leadership is always about setting an example and not simply telling others what to do. When employees are led by strong example, they are more likely to copy the behaviors and actions as they can see the results and the value of doing things in the specific manner. If you are looking to create a successful leadership development program, then you need the current leaders to attend and guide the future leaders. The ability to learn from people that are currently leading will be a valuable lesson for the employees. Not only is this important in training the future leaders of the organization, leadership development program will be useful in offering a fresh perspective to the leader as well. Leadership is a continuous path of development.

Dan McCarthy, a leadership expert, has written an informative post on how CEOs should stay involved with leadership development. McCarthy proposes 10 essential ways to show more commitment towards the program and to get results:

  1. Don’t get caught up in the process, but fix your attention on the well-defined results.
  2. Expect quality results from your Human Resources team.
  3. Lead by example.
  4. Focus on the actual ways leaders are developed – new challenges, other people and solid resources.
  5. Remember to focus on long-term objectives and vision.
  6. Assess talent properly.
  7. Implement proper accountability structures within the organization.
  8. Maintain involvement in leadership development programs.
  9. Get the board to sign up for the training schemes.
  10. Act swiftly when results are not achieved.

The second aspect involves identifying the right candidates for the leadership development program. Your training scheme can be tailored around the top talent instead of blindly picking trainees for the schemes. Identifying the most suitable candidates can in some cases be left to the training company or you could have the human resources scout the employees that’ll most benefit from the scheme.

Step 4: Implement practical solutions

Similar to focusing on realistic objectives, leadership development should always be based on practical solutions. The key to leadership development isn’t just to tell about the good practices you’d want them to do as leaders, but show through real life examples what the objectives are. Leadership is about leading through example and if you want to raise future leaders that are effective, you need to show them what is expected of them.

In the Inc. article, Disney’s programming coordinator for the Disney Institute, Bruce Jones, said the company uses case studies as part of their leadership development. “We want those case studies to be as current as possible, as relevant as possible,” Jones explained, stating that the organization is always testing different approaches and then sharing the results with its leadership development program. In the same article, Murphy went on to state,

Leadership is as much performance art as much as it is everything else. They can talk a good game, but if they go out into the real world and an employee starts talking to them and they roll their eyes, well, they haven’t learned much.

The behaviors and actions you teach as part of the training scheme must have context in a real-life situation. This is also why having the top-level executives to buy-in in the program is vital. It provides the trainees a chance to talk to leaders who are out there right now and learn from their behaviors in dealing with issues.

When you are picking out a mentor or selecting the trainers for the leadership development scheme, emphasis must be on this practical application. You want to pick people who have leadership experience, either as a leader or a long-term career in mentoring leaders. Experience in terms of teaching about leadership is crucial because it is one area, where time often makes the biggest difference. Leadership is definitely not an act you can learn overnight, even if you show the signs of being a true leader right from the start.

Step 5: Measure performance

Finally, once you’ve implemented a program and embarked on the journey to leadership development, you need to start focusing on the outcomes. As mentioned in the guide before, you can have ineffective results if you don’t plan your program carefully. But in addition to planning, you can also guarantee success by measuring the plan’s performance at every step of the way. By being aware of how effective the program is you are able to correct issues on the go.

Be aware of the short- and long-term objectives and implement a progress assessment method to regularly measure how these objectives are being approached. The assessment should be about the specific tools and resources, asking the participants to analyze their effectiveness with the goals in mind. But you also need to regularly obtain feedback from the participants to ensure you know what they are learning and the improvements they might be looking for.

Naturally, you should also keep an eye on the financial impact of the program: Are you increasing productivity since the leadership development? What has it done to your succession rates? Is employee satisfaction increasing? Effective leadership development will provide benefits to an organization and the training scheme can and should be measured to ensure the organization is enjoying these advantages.

THE BOTTOM LINE

Leadership development is a natural occurrence because even the most experienced leaders are constantly developing their craft. Leadership is not easily mastered and therefore, you should always be willing to learn more about it. It’s also a skill that once gained should always be shared and passed on because it can help create the next generation of leaders. Therefore, leadership development – the process of improving one’s ability to lead – should be at the heart of every organization.

Organizations can be wary of leadership development programs, as they can easily be seen as ineffective and costly ventures. But the drawbacks are generally tied to lack of preparation and planning. You can’t start leadership development without understanding your options in terms of the tools and resources, but also without carefully defining what leadership looks like for your organization.

Understanding your leadership needs and defining the outcomes you want to achieve through leadership development is more important than deciding whether you want to opt for an individual or collective approach. Once you are aware of the organizational and personal requirements, then finding the right development training schemes is easier since you know what you need.

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