7 Steps to Create a Leadership Development Plan

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A leadership development plan is a useful tool to ensure that your organization has a strong pipeline of future leaders. The continuous evolution and success of any organization are linked to the continuous growth and evolution of its leadership. Creating a solid leadership development plan helps outline detailed steps to identify and nurture the next generation of leaders within your organization.

Contents
What is a leadership development plan?
Why create a leadership development plan?
Steps to creating a leadership development plan
Challenges to creating a leadership development plan

What is a leadership development plan?

A leadership development plan is a strategic plan designed to help employees gain and develop leadership competencies and prepare them for management and leadership roles within an organization.

This plan is usually structured, long-term and personalized for the unique needs of an employee and the organization. It outlines learning objectives and activities an employee is going to undertake to reach their goals.

Why create a leadership development plan?

Leadership development plans are critical to business continuity in times of crises and in competitive markets. Such a plan has the potential to keep your most valuable employees engaged with the organization and dissuade them from seeking alternative job opportunities with competitors. What’s more, the stronger your leaders, the greater your organization’s potential to differentiate itself and remain viable in a constantly changing marketplace.

The pace of change before 2020 was challenging to keep up with, but the COVID-19 pandemic accelerated this change to a speed most couldn’t have fathomed. Most notably, it highlighted the need for leaders to manage more aggressive crises, navigate greater ambiguity, and ensure business continuity through digitization of its operations.

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Many HR Leaders truly functioned as strategic business partners, whether or not they were recognized as such before. In 2021, the top five priorities for HR Leaders, according to a recent survey by global research and advisory firm Gartner are:

  1. Building Critical Skills and Competencies – 68% of HR leaders consider this a priority
  2. Organizational Design and Change Management – 46%
  3. Current and Future Leadership Bench – 44%
  4. Future of work – 28%
  5. Employee Experience – 26%

Two of these priorities are connected to creating a leadership development plan for your employees.

Building critical skills & competencies

According to the HR Leaders Gartner surveyed, they don’t know what skill gaps current employees have. There is little effective integration of learning into employee workflows. What’s more, they can’t create skills development solutions fast enough to meet the evolving skill needs.

Current and future leadership bench

The challenges HR Leaders expressed in the Gartner survey are that their leadership bench is not diverse. Their succession management processes do not yield the right leaders at the right time, and as a result, they struggle to develop effective midlevel leaders.

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Developing essential leadership competencies and building a diverse leadership pipeline are the key goals for your leadership development plan.

Furthermore, such a plan helps engage your employees and provide them with continuous learning opportunities.

Steps to creating a leadership development plan

1. Assess and identify talent

Some organizations have a formal leadership development program and talent pools from which they can select talent for a specific leadership development plan. However, some organizations do not have formal talent identification or assessment procedures.

For those organizations, we would recommend a simple 9 Box Grid. A 9 Box Grid measures potential (future performance capacity) vs. performance (present performance). Ideally, you should select High Potentials, Stars, and High Performers for a leadership development plan.

9 Box Grid for Leadership Development Plan

2. Obtain buy-in from key stakeholders

For a leadership development plan to work, there must be buy-in from senior leadership, the manager or supervisor of the targeted employee(s), and the employee.

  • A leadership development plan often requires more significant investment into that employee. This usually includes allocating a budget for it to be successful. The budget would need to be approved by senior leadership before proceeding. A consideration Senior Leadership may have before approving the budget is the degree to which the plan aligns with the organization’s strategic objectives. The Senior Leadership may also want to be the final approver on who is selected to participate in the leadership development plan.
  • The manager/supervisor also needs to be engaged in this process. The reason for this is that the targeted employee may need to take on additional projects and attend training that divides the employee’s focus from current work commitments. They may also be temporarily assigned to another team to develop additional competencies. Unless the manager/supervisor has bought into this plan, it is hardly likely to succeed because the employee will feel torn by these different demands.
  • The employee(s) targeted for this plan also must want to participate. While this may seem like a great opportunity, there may be an employee or two who may not want to participate or wish to postpone participation for another time. This may be due to other personal commitments, or the employee may not be interested. Not every employee wants to be in a leadership position, even if they may have the capacity to be a leader.

An agreement among the senior leadership, the manager/supervisor, and the employee about the plan’s objectives, how it will be achieved, by when, and who will participate is essential for a successful leadership development plan.

3. Identify the leadership style

There may be an overarching leadership style within the organization that is expected of potential leaders. This may be based on the organization’s culture and business needs. According to American Express Business Trends and Insights, there are seven different leadership styles. An eighth style, transformational leadership, has been gaining traction.

Autocratic  Authoritative
Democratic Pacesetting 
Coaching Affiliative
Laissez-faire Transformational

An organization may prefer one or two of these styles. However, the current uncertainty and volatility of business environments require leaders to function effectively in several of these, depending on the situation.

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This degree of agility may not come naturally, but it is an essential skill now that must be acquired. According to American Express Business Trends and Insights, “an agile leadership style may be the ultimate leadership style required for leading today’s talent.” 

4. Determine the key leadership competencies

Identifying key leadership competencies needed for the organization’s current and future success is essential to carrying out a successful leadership development plan. These competencies become the foundation of the developmental plan. Developing them means ensuring the next generation of leaders are ready for current challenges and unknown crises yet to be encountered.

According to Gartner survey findings, “currently, only 21% of HR leaders say peers share accountability or partner with HR to determine future skill needs.” To be ready for another year like 2020, there needs to greater partnership and shared accountability with HR Leaders.

SHRM categorizes leadership competencies into three groups:

  • Competencies for leading the organization
  • Competencies for leading others
  • Competencies for leading the self

These are 15 key leadership competencies every HR professional should know:

Types of leadership competencies

Moreover, there are three additional competencies to highlight:

  • Cultural Intelligence (CQ) – It measures a leader’s capability to relate and work effectively in culturally diverse situations. It is the drive and knowledge leaders have and the strategy and action they take to understand and intergate into different cultures to achieve business objectives. Organizations and stakeholders are becoming more and more diverse, and therefore leaders need to be culturally competent. Cultural intelligence and competence are foundational to leaders developing a diverse, equitable, and inclusive environment.
  • Digital Intelligence (DQ) – According to the DQ Institute, DQ is “the sum of social, emotional and cognitive abilities that enable individuals to face the challenges and adapt to the demands of digital life.” DQ also “involves understanding customers and how they’re using your website, mobile site, or mobile app, then using this data to optimize their experience no matter when, where or how they interact with you. In today’s mobile, multi-device and multi-channel world, digital intelligence is the ability to transform digital data into real-time, actionable, customer-centric insights.”
  • Agility – The book ‘Imagine It Forward’ (Comstock, Raz 2018) says, “good leaders absorb the shock waves and anxiety in moments of radical change.” Good leaders have the ability to use these moments of radical change to propel their organizations forward. The Forbes Coaches Council identified several characteristics that distinguish the Agile Leader, including resilience, collaboration and being curious.

5. Assess key leadership competencies 

To understand what the leadership development plan will entail, the organization will have to assess the selected employee(s) against the critical leadership competencies identified. The results of this assessment will highlight where the competency gaps of the employee are. Then, use these gaps to identify and/or design the most suitable developmental opportunities for the employee to bridge those gaps.

A few Leadership Assessment Tools that can be considered are:

  1. APTMetrics LeadIN Leadership Assessment Suite
  2. CCL’s Benchmark for Executives
  3. DDI Leadership Mirror

6. Design the leadership development plan 

Consult your organization’s Learning & Development subject matter experts to develop the appropriate learning opportunities for the employees. Incorporate as many of the learning solutions as possible listed below to provide a rich learning environment for the employee:

  1. Self-paced micro-learning – Similar to LinkedIn Learning and Google Grow.
  2. Complementary leadership mentoring – This type of mentoring pairs potential leaders with leaders who are strong in the competencies they are weak in.
  3. Job shadowing – This allows the employee to get a realistic view of how a job flows. It also presents an opportunity to meet key stakeholders, and understand the challenges on the job.
  4. Job rotation – The employee assumes new roles for a period of three to six months, often for a temporary period.
  5. Professional development course – These are usually 2-3-day offsite training for a particular skill or competency.
  6. Professional certifications – Employees may need to acquire and maintain professional certifications to perform in certain roles and be deemed credible by their peers.

This is, of course, not an exhaustive list. You should combine the learning strategies in a way that helps your employees meet their goals.

Gartner’s report recommends, “organizations should take a dynamic approach to reskilling and redeploying talent in which all impacted stakeholders work together to sense shifting skill needs and find ways to develop skills at the time of need. With the dynamic approach to reskilling, employees apply 75% of the new skills they learn (far more than with other approaches), and learning begins sooner, as needs are identified faster.”

Combining the right learning & development methods in your organization’s leadership development plan will help your employees succeed.

7. Conduct continuous 360-degree leadership assessment

You want to know if your leadership development program is effective and reaches its goals. That’s why you need to create a way to monitor the employee’s progress during and to determine readiness after completion of a leadership development plan.

One of the ways is a 360-degree leadership assessment from key stakeholders. Continuous feedback and engagement ensure the success of the employee and the plan. Engagement during the process provides an opportunity to tweak the plan’s objectives to mirror organizational changes in real-time. Ultimately, the employee becomes the leader the organization needs.

For example, OPM Leadership 360™ or RightPath 360 assessment may be good options.

Challenges to creating a leadership development plan

There are potential challenges to successfully executing a leadership development plan. For example:

  1. Limited resources such as a designated budget and allocated time.
  2. Lack of commitment from the leadership, managers, and the organization in general not having a culture of learning.
  3. Inability to create skills development solutions fast enough to meet the evolving skill needs.
  4. Ineffective succession management programs and initiatives that fail to produce the right type of leaders.

However, knowing the challenges enables leaders to take preemptive action to avoid potential obstacles to the plan’s successful implementation.

A final word

HR and business leaders will be playing catch-up with all the changes that have happened because of COVID-19. However, leaders must press ahead by adapting proven processes, relinquishing those that do not meet the demands of the times, becoming more agile, and acquiring digital and cultural intelligence to face these challenges.

Most importantly, leaders cannot lose sight of employees and the next generations of leaders who want to be equipped to meet the challenges ahead. They may be intimidated by the volatility of the times, but they are also excited about the opportunities that arise during times of crisis.

Invest in your future leaders by creating leadership development plans and ensure the needed skills are identified and developed in real-time.

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