To perform at their best, organizations need great leaders.
As key decision-makers and definers of culture, there’s a clear correlation between the strength of an organization’s leadership and its performance in the market. High-growth companies continually strengthen their talent by providing enhanced leadership development; an industry valued at a whopping $366 billion.
This ultimate guide tells you everything you need to know about leadership development plans - what they are, why they’re important, what they should include, and how to create one.
Let’s jump in!
What is leadership development?
Leadership development is a long-term strategy for organizations to develop existing talent into future leaders.
It’s a set of activities that enable current and aspiring leaders to improve their skills, abilities, and confidence. But the impact of a leadership development strategy is totally dependent on its quality.
A good-quality leadership development plan is personalized to the individual, either supporting existing leaders to enhance their performance or nurturing high-potential employees to ensure a strong pipeline of future leaders. The plan itself can be formal or informal, but it is usually structured with long-term goals and development methods for the individual.
Why is leadership development important?
Let’s cut to the chase - research clearly shows that higher leader capabilities increase the likelihood of both employee engagement and performance. And organizations with highly engaged, strong performers are almost twice as likely to report growth in revenue and profitability when compared against those with low performance and engagement.
Here are just some of the many ways in which leadership development benefits an organization:
✅ Increased agility and innovation
✅ Better business results including higher revenues
✅ A positive culture of learning, development and growth
✅ A more engaged workforce, with lower attrition and absence
How to set leadership development goals
An effective leadership development plan needs to include clear goals, set at the beginning of the process.
We suggest breaking the goals down into these 3 levels:
- Individual leader
Goals that align with the organization’s overarching strategy, vision, and mission. If the company is forecasting a year of growth and diversification, it will need leaders to have goals focused on business expansion or network building. The specific goals will depend on the strategy and direction of the organization.
Goals that the organization wants all of its leaders to work towards, aligned with its values. This is the magic dust that help build a company culture, and what people think of as “our way of doing things around here”.
Individual leader goals
Goals that are specific to each leader, often discussed during performance management conversations. For example, building a new skill that’s required for an upcoming promotion.
Company-wide goal example
Diversify knowledge of a certain industry or sector
When an organization’s strategy is focused on growth, it may require its leaders to develop their knowledge of a new industry or sector that it plans to diversify into. Alignment with the company’s strategic objectives is key.
All-leader goal example
Improve communication skills
A leader is only as good as their communication, and a company’s communication strategy is only as good as the leaders that adopt and cascade it amongst their teams. Our TeamTalk™ feature helps leaders improve their communication skills and build stronger connections between colleagues.
Individual leader goal example
Build active listening skills
We’ve all come across colleagues who are great at talking, but not so great at listening! Cultivating active listening skills is an important goal to develop as a leader.
So what actually is a leadership development plan?
Ok - we understand the importance of effective leadership development, and we’ve got a good idea of leadership development goals. So now what?
A leadership development plan is the practical articulation of how these goals are put into action.
Put simply, it is a roadmap that helps an employee set their career toward advanced leadership roles and senior management positions, aligned with the requirements of the business.
Why create leadership development plans?
Its benefits are twofold.
At an individual level, the leadership development plan supports those who want to progress. And at a company level, it enables the development of a pipeline of business leaders who have built the specific skills and capabilities required to drive the organization forward. It’s a win-win!
On top of having a pipeline of highly-motivated, skill-specific talent ready to progress into leadership positions, there are numerous other benefits to leadership development plans, including:
✅ Greater buy-in to the strategic direction of the organization
✅ Improved employee engagement right across the organization
✅ Closer alignment with, and communication of, the strategy, vision, and mission
How do you write a leadership development plan?
Let’s put what we’ve explored so far into action.
The process of creating a leadership development plan can be broken into 4 steps:
- Step 1 - Identify leadership candidates
- Step 2 - Assess their capabilities
- Step 3 - Develop leadership plans
- Step 4 - Measure the impact
Step 1. Identify
The first step is to identify leadership candidates, and then assess their current capabilities.
Successful organizations such as IBM, Sony and Fidelity identify potential leaders early in their careers so they can provide the necessary backing for them to blossom as strong leaders. To do this, an organization must understand the type of leaders that it needs by considering what skills, personality traits and specific roles align with the business strategy for future success.
Step 2. Assess
Once the candidates and leadership requirements have been identified, the next step is to assess the current capabilities within the organization.
Backed by the list of required skills, traits, and future roles, a leadership assessment will enable the organization to understand where its leadership currently is at both a company and individual level.
A leadership assessment can be carried out via a variety of methods, but should aim to identify the development needs by highlighting the gaps between existing and desired capabilities. A 360-degree assessment provides a comprehensive view of a leader's strengths and opportunities for growth by systematically collecting feedback from peers, direct reports, colleagues, and superiors within the organization.
Step 3. Develop
Following the assessment, specialized career pathways and development plans should be created for each leadership candidate. This step includes defining the leadership development goals for each individual, discussed earlier in this guide, and identifying which methods of development will be used.
The most appropriate development methods will be dependent on the specific goals but could include a combination of formal training, mentorship programs, volunteering, and leading committees. PepTalk Paths have been created to provide a clear route to develop skills and build confidence, so can be a good option to consider.
Step 4. Measure
After a set amount of time, it’s important to measure the efficacy of the leadership development plan by reviewing progress. The plan must be measurable in order to quantify its success. This can be done by re-running the leadership assessment and adjusting the goals or development methods, as needed.
So there we have it! Your ultimate guide to leadership development plans.
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