Steps to build a future-ready leadership development program

Businesses are not the same as they were in 2019.

Between moving to permanent hybrid or remote work setups, prioritizing DEI, and moving towards digital–first business practices – the business world has certainly changed. Around 75% of organizations have experienced five major company-wide changes within the last 3 years, as per Gartner.

Despite the changes, a brutal 70% of transformation programs fail.

If organizations depend upon capable leadership to guide them through unprecedented changes, why do some of the best and most revered organizations fail to adapt to change, implement their strategies, or prepare for an uncertain future?

In essence, while the business world has evolved, leadership practices have remained stagnant.

Many leaders still find comfort in traditional leadership models, which were only historically effective. These may focus on centralized decision-making, hierarchical structures, or command-and-control approaches. Additionally, introduction of many concepts, such as DEI, psychological safety, employee autonomy, mental well-being, and so on require a drastic mindset shift and operational processes. There is a resistance to implementing new leadership styles to adopt these changes. Most importantly, traditional leadership development plans do not consider these gaps, inadequately preparing leaders for the future of business. More than 77% of organizations report that leadership is lacking, but it should not come as a surprise given that 10,000 baby boomers retire every single day.

While there is a necessity for leadership practices to evolve, it begins with redesigning leadership development plans.

Strategy and market shifts: Alignment with leadership development

Why is it important to align leadership development plans with market shifts and company strategy?

First, when you don’t align them with market shifts, leaders will lack the necessary skills, qualities, and competencies to drive the organization forward. Talent gaps will emerge, leaving key areas of the business unsupported, and employee engagement may suffer due to ineffective leadership.

And secondly, without company strategy and leadership development being aligned, leaders cannot be aligned with the organization’s strategic goals. This means that leaders may take actions that are inconsistent with the business direction, leaving the organization stagnant. Eventually, it diminishes the organization’s competitive edge, causing it to fall behind competitors.

Discovering unique strategic drives in the market

A team of experts, who possess an in-depth knowledge of both the business and leadership development process, begins with an examination of the business strategy. The team then identifies “unique strategic drives” that differentiate the organization’s approach from another. These key drivers are critical as they will be what the organization’s leaders will achieve. These become the requirements for new leaders, ensuring that the leadership development plan aligns with the organization’s objectives.

For example, let’s say a team of experts at a leading technology company examined the company’s business strategy. The strategy emphasized customer-centric solutions and global expansion. Keeping this in mind, what would be the unique strategic drivers that differentiate the company from its competitors?

It would be:

• Rapid product development, since the company should be able to bring innovative products to the new markets quickly.
• Designing customer-centric solutions
• Expanding the company’s presence

These strategic drivers become the foundation of the leadership development plan. The experts now outline specific requirements for new leaders, which are:

• Global mindset: Leaders must understand diverse markets and cultures to drive successful international expansion.
• Customer advocacy: Leaders must prioritize understanding customer needs to guide product development and service improvements.
• Innovation leadership: Leaders must encourage teams to experiment and take calculated risks.

These drivers identify the specific leadership behaviors needed to ensure the company meets its objectives.

Company strategy paving way for leadership

To align the leadership plan closely with strategic objectives, organizations need to establish a clear leadership strategy. Similar to business strategies, it defines how leaders should operate, what qualities they should possess, and where they are needed within the organization. It focuses on bridging the gap between the organization’s current state and its desired future state. Once defined, this strategy guides leadership development and helps achieve strategic goals.

In the previous scenario of the leading tech company, keeping in mind the leadership requirements, the company prepared a clear leadership strategy. It defined:

• How leaders should operate
• What qualities they should possess, and
• Where the leader is needed within the organization (customer relations, international expansion teams, and product development)

This leadership strategy bridges the gap between the company’s current state and desired future via tailoring training programs and ensuring leaders are equipped with the right requirements.

Crucial steps to build an adaptive leadership development plan 

Although 83% of businesses understand the importance of developing leaders at all levels, only a mere 5% implement leadership development plans across all levels. This demonstrates the desperate need for businesses to commit to leadership development if they want to adapt to the evolving markets and nurture the next generation of leaders.  

As Nelson Mandela highlighted:  

Leadership is defined by actions, not positions.  

However, despite implementing well-designed leadership development plans, many struggle to apply theoretical knowledge. As Harvard Business Review emphasizes, an understanding of leadership concepts is not enough; it requires practical application in real-world scenarios. Companies that followed this observed a 20% increase in the leaders’ performance and 25% increase in learning capacity. 

Companies encounter two challenges in leadership development: identifying qualified candidates for current and future leadership roles and implementing effective programs to nurture future leaders. This blog focuses on the latter issue, helping organizations implement leadership development plans to prepare leaders for the future. 

Create a succession plan for critical roles

The business must also be prepared for future leadership needs in alignment with its goals. A succession plan helps develop targeted training and personalized development plans, ensuring continuous development and availability of new leaders. This approach not only ensures leadership continuity in the face of unexpected departures or transitions but also helps maintain strategic momentum. 

Develop competency models

Competency models identify the underlying characteristics that predict behavior and performance. They can be used to help leaders reflect and assess where they may need to hone their leadership skills.  

Centuries ago, the Romans recorded the qualities of excellent commanders to select soldiers that fit their conquest and expansion policy. Such competency-based management today can yield desired outcomes, especially when linked with the company’s vision and strategy. Without this synergy, it may increase costs and hinder teamwork.  

These competencies can be categorized into several types: 

• Motives
  Within the technology firm, leaders must be achievement-motivated, setting ambitious goals for product innovation and market expansion. They should drive their teams towards constant innovation and customer-centric solutions.

• Traits
  Leaders should exhibit traits such as active listening to ensure that customer feedback is carefully considered in product design and service enhancements.

• Self-concept
  The firm’s leaders instill confidence and determination in their teams, enabling them to take on complex challenges. This leadership style supports the company’s goals of maintaining market leadership.

• Knowledge
  Knowledgeable leaders within the same firm possess deep knowledge of market trends and industry regulations. It guides strategic decisions and alignment with the company’s expansion into new global markets.

• Skills
  Leaders must be adept in analytic and conceptual thinking and drive decision-making within the firm. They can analyze market trends and customer insights, enabling them to help the company gain a competitive edge in the global marketplace.

To learn more about developing a competency framework, click here. 

Design personalized plans with real-world activities

No two leaders are the same. While some organizations realize this, they remain affixed to outdated leadership development methods that fail to consider the uniqueness of individual leaders.  

Fortunately, this movement is shifting.  

A new survey found that 75% of L&D professionals will be developing more custom learning content in the upcoming years.  

Despite this shift, many development plans still do not integrate real-world activities. These plans rely too much on generic training modules, which are disconnected from the challenges leaders face daily.  

For example, a generic leadership training module might focus on teaching effective communication through lectures and role-playing exercises. On the other hand, implementing real-world simulation exercises can be extremely beneficial. For instance, an exercise where leaders must lead a stimulated product launch under time constraints provides practical experience and immediate application. 

For the technology firm in question, several leaders were identified as needing improvement in areas such as building strong teams, inspiring employees, and leading effectively. The organization developed personalized plans incorporating real-world activities:

TED talk practice sessions: Some leaders (who dealt with communication challenges) were made to participate in a workshop where they delivered short TED-style talks on industry relevant topics or personal experiences. This, in turn, helps leaders become more confident to communicate their vision and inspire their teams.

Cross-functional project teams: Leaders were assigned to cross-functional project teams focused on addressing a specific business challenge. They were to take charge of initiatives and leverage different skills. This allows them to lead diverse teams and understand project management.

Invest in experiential training

Now, it’s time to allow leaders to test new skills in a safe environment and adjust as required. It immerses leaders in hands-on experiences that mirror real-world challenges. One such activity (for the technological firm) could be a simulation of a product launch, where leaders are required to guide their teams through the planning, execution, and post-launch analysis phases. This tests their abilities to manage teams, communicate, and adapt to unexpected challenges. Such an approach immensely bridges the gap between learning and doing, making it easier for leaders to transfer their skills to their everyday roles. 

Implement new leadership integration plan

New leadership integration plans ensure smooth transition for new leaders, making sure they feel connected to their roles and can form strong bonds within the organization. Organizations can design an onboarding program that familiarizes new leaders with their responsibilities and integrates them into the team dynamics. Some points to keep in mind: 

• Involve meetings with key stakeholders 
• Clarify expectations, responsibilities, and KPIs 
• Regular feedback sessions about the integration experience 

In the technology firm scenario, new leaders met with cross-functional teams to further understand their roles in driving technological advancements and customer-centric solutions. The firm conducted quarterly feedback sessions to provide input on their onboarding experience.

Measure progress

Organizations must measure the overall program’s progress to ensure alignment with organizational goals. It shows how well leaders are advancing in their roles and where improvements are needed. While some organizations rely on basic self-assessments, they do not accurately reflect leadership growth. 

A more forward-looking approach would be to leverage performance evaluations, subtly integrating them into the assessment process. It tracks the leaders’ development over time. To do this: 

• Align performance metrics the goals  
• Conduct regular performance evaluations  
• Use 360-degree feedback  
• Develop personalized improvement plans for further growth 

Adapt accordingly

Despite the high stakes – where 70% of transformation programs are said to fail – many organizations may falter by not adapting their programs to changing circumstances or feedback. To adapt means to set new goals or re-evaluate existing ones in response to these challenges.  

Address the leadership gaps that hold you back

Findings from recent research say that up to 70% of CEOs believe their leaders are weak in their ability to build teams and make employees feel valued. There is a noticeable gap between the leadership capabilities needed and the ones the leaders currently possess. Some of the main causes of leadership gaps are: 

• Lack of HR’s role: HR leaders are unaware of how to influence the boards to bridge the leadership gap. 
• Outdated leadership development plans: Leadership programs often focus on copying the style of charismatic CEOs and top leaders who have had remarkable success. This can lead to extra emphasis on what leadership looks like rather than developing leadership skills throughout all levels.  
• Generic leadership models: Additionally, organizations tend to use generic leadership models that stress personality traits over practical skills. While they offer useful insights, they are often too theoretical and do not address the everyday challenges leaders face.  

They focus more on general leadership qualities and not on achieving real business results.

Now, how can organizations address these leadership gaps? 

This simple model below helps capture current leadership capabilities and gaps to prepare leaders to lead the organization through change.  

• Existing leadership skills: This includes areas where leaders have already shown proficiency. 
• Overinvestment in current skills: Evaluating whether the organization is disproportionately investing resources in enhancing skills that leaders are already strong in. This can sometimes neglect the need for further development in other critical areas. 
• Skills to be developed: Skills are pinpointed based on the leadership requirements, challenges, and strategic objectives identified in the first step. When developing new skills, it’s important to set goals and adapt accordingly. These goals should be measurable, customized to fit specific roles, and adjusted accordingly. Most growing organizations use OKR software or a performance management system, like Keka, to take care of their employee performance needs. 
• Investment in critical skills: This helps review whether the organization is adequately investing in developing the above necessary skills. This is important to support leaders in acquiring new competencies aligned with business goals. 
• Tracking progress: Continuously monitoring and adjusting the development of these skills to ensure the leaders are on track to meet the evolving business demands. This includes opportunities for practical application, feedback, and real-world leadership challenges.  

Drawing from the example above, the leaders at the company already excel in technical innovation and project management. However, there’s a gap when it comes to team building and employee engagement. The company identified this and stopped investing heavily in technical training (using the skills snapshot). It identified the following skills the leaders need to develop:

• Team building
• Employee engagement
• Global market understanding of diverse markets and cultures

It then reallocated its resources from areas of overinvestment (in technical training) to ensure balanced development of critical competencies. Through this, the company was able to develop its leaders for tomorrow and achieve real business results. In conclusion, the tech company developed its leadership practices effectively in response to the evolving business needs.