Leadership Development

Updated on April 12, 2024
Article byRutan Bhattacharyya
Edited byRutan Bhattacharyya
Reviewed byDheeraj Vaidya, CFA, FRM

What Is Leadership Development?

Leadership development is a process that involves improving the confidence, skills, and abilities of high-performing workers or employees and making them ready for leadership roles in any organization. Besides nurturing effective leaders and ensuring employee satisfaction, it can help businesses retain, develop, and attract talent to boost performance.

Leadership Development

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The set of activities in the process allows employees to enhance their skills in certain key areas, such as project management, decision-making, network building, innovation, strategy, team management, etc. Organizations can choose employees with leadership potential for such a program. The process equips persons with the necessary skills to navigate challenges, embrace innovation and make informed decisions.

Key Takeaways

  • Leadership development refers to a systematic process carried out by organizations to improve the behaviors, competencies, and skills of individuals to help them become leaders who can lead a team effectively.
  • This process includes different activities, such as coaching, mentoring, and assignments to prepare future and current leaders.
  • Unlike management development, leadership development focuses on human behavior’s psychological elements.
  • There are various leadership development benefits. For example, such a process helps attract, retain, and develop employees. Moreover, it enhances inclusion and diversity within a company.

Leadership Development Explained

Leadership development refers to a set of activities that involves honing and enhancing the knowledge, abilities, and skills of persons to help them become leaders within any organization in the future. This professional and personal development journey equips employees with the necessary strategies and tools to lead a team with effectiveness and confidence. 

Businesses have to face different challenges concerning leadership. Without effective leaders steering the ship, productivity and employee engagement are impacted, and the overall performance of organizations is not up to the mark. Hence, leadership development programs are necessary to address such challenges.

Let us understand some of its features to get a better idea.

  1. Leadership Values And Ethics: This characteristic highlights the significance of integrity, ethical relationships and decision-making driven by value. It is essential to develop leaders who give importance to ethical behavior.
  2. Practical Application: Such a process focuses on experimental and practical learning approaches. Moreover, it enables people to use their leadership skills in different case studies and real-world scenarios or via assignments and projects.
  3. Self-Awareness: Such a process promotes self-reflection and enables people to comprehend their weaknesses and strengths, thus allowing them to develop sense-awareness.
  4. Long-Term Perspective: Leadership growth takes place over the long term as the skills required to lead a team are subject to refinement over time as a person gains more and more experience. 
  5. Coaching And Mentoring: Usually, this process involves building coaching and mentoring relationships. As part of the procedures, experts offer feedback and guidance to assist individuals in enhancing their leadership capabilities.

Process Steps

The steps involved in the process are as follows:

#1-Define Good Leadership

First, individuals must define good leadership and uncover the meaning of leadership specifically for their organization. This involves determining the leaders’ responsibilities, the features most valued leaders should share, etc.

#2-Identify The Leaders

It might be clear who the leaders in a company are based on how an entrepreneur organizes their people. That said, note that not every leader is in a managerial position.

#3-Figure Out What Success Looks Like

Business owners must determine what success is for them before they establish achievable and effective developmental objectives. For example, one may define success as higher engagement.

#4-Establish A Framework

The next step involves introducing a framework to facilitate performance and management. Introducing specific ways of thinking regarding the overall performance-related objectives gives all persons within the organization a common nomenclature to utilize as a benchmark.  

#5-Offer Small Development Opportunities

Business owners must take measures to provide training and development opportunities that would help people become better leaders. Hosting seminars on leadership, leadership workshops, and mentorship programs are some straightforward activities that can be organized to boost the development of leadership.

Lastly, gauge the outcome of the process. For this, one can utilize human resources (HR) metrics, carry out surveys, or introduce entirely new systems to track the results. 


Let us look at the strategies involved in this process.

#1-Change Leadership Style According To Certain Circumstances

Individuals must note that people must adapt leadership styles in response to particular situations or scenarios. When doing so, one must consider three things — the situation’s nature, the requirements of the people they are leading, and their preferences, desires, or tastes as a leader.

#2-Create An Empowering Environment

A successful leader within the organization must allow employees to show their leadership skills besides fostering an environment where other people can prosper. This is because the leader has the responsibility to establish and cultivate an where the team members comprehend the business’s vision clearly. Simply put, the leader facilitates goal-setting and ensures that all team members have the required tools to achieve their objectives.

#3-Craft A Compelling Vision

One of the most crucial aspects concerning leadership development is crafting and sticking to a compelling vision. Note that a compelling vision has these characteristics:

  1. Core Values
  2. Aspirational and inspiring
  3. Conscience
  4. Achievable and realistic 


Let us look at a few leadership development examples to understand the concept better.

Example #1

Suppose ABC Company, an organization engaging in software development, offers its own leadership development program. The main purpose of this program is to nurture potential leaders of the future through coaching and leadership training. The activities that are part of the process help in improving strategic thinking in addition to leadership capabilities by integrating an organization-wide growth mindset.

Such a program has played a key role in helping the company maintain a high employee retention rate while its peers struggle. Moreover, the organization’s performance has improved every year since the program’s inception.

Example #2

In 2023, the anticipated worth of the leadership development product market in Europe is $14,810.9 million, and per reports, it is set to climb to $35,187.9 million by 2033. Such estimates are based on the increasing requirements of leadership development programs among businesses. Indeed, organizations are now looking for new leadership and organizational skills in addition to the ones that already have contributed to the success in the past.

To fulfill the requirements and diversify product lines, organizations offering programs related to improving leadership in Europe seek strategic partnerships and alliances with other companies in the same industry.


One can understand the importance of this process by going through the following points:

  1. It can help organizations in the early identification of future leaders. Moreover, it allows business owners to learn about different employees’ capabilities and skills. This helps make clearer promotion choices.
  2. This process increases employee retention and development if carried out efficiently. Moreover, it helps attract top talent.
  3. Programs organized to improve leadership skills open access to people belonging to different marginalized in a company. This improves inclusion and diversity in the workplace.
  4. It sets a clear vision, improves performance, enhances productivity, and aligns teams.
  5. The process improves individuals’ problem-solving and critical-thinking skills. This, in turn, improves decision-making. 
  6. Another key leadership benefit is that it promotes innovation, adaptability, and creativity. 

Leadership Development vs Management Development

Understanding leadership and management development can be challenging, especially for one new to business. That said, one can comprehend their meaning and purpose and avoid confusion by knowing the vial differences below.

Leadership DevelopmentManagement Development
This process focuses on the psychological components of human behavior.Management development helps in upskilling conventionally managerial tasks, for example, organizing, planning, and monitoring.
It does not deal with improving specific management-related aspects, such as execution, planning, controlling, etc.This process deals with improving execution, controlling and other processes related to management

Frequently Asked Questions (FAQs)

1. What is a leadership development plan?

Such a plan is a detailed roadmap outlining the steps and strategies necessary to improve a person’s leadership skills. It consists of a set of objectives, evaluation and reflection, timelines and milestones, action plans, and goals that aim to spot vital competencies required to ensure effective leadership.

2. How can coaching help leadership development?

Coaching can positively impact this process in the following ways:
– Helps identify key strengths and weaknesses
– Improves communication
– Supports leaders in formulating strategies that can improve competencies and skills required to become an efficient leader
– Strengthens emotional intelligence
– Provides a fresh perspective

3. What does a leadership development manager do?

The primary role of a person in this position includes spotting, coordinating, and piloting approaches to execute a leadership development framework on a consistent basis. Other responsibilities include managing the training and development budget, conducting and arranging sessions, etc.

This has been a guide to what is Leadership Development. We explain its strategies, process steps, examples, importance, & comparison with management development. You can learn more about financing from the following articles –

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