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Leadership development expands the capacity of individuals to perform in leadership roles within organizations. Leadership roles are those that facilitate execution of a company’s strategy through building alignment, winning mindshare and growing the capabilities of others. Leadership roles may be formal, with the corresponding authority to make decisions and take responsibility, or they may be informal roles with little official authority (e.g., a member of a team who influences team engagement, purpose and direction; a lateral peer who must listen and negotiate through influence).
Leadership development is thought to be key to business success. A study by the Center for Creative Leadership holds that 65 percent of companies with mature leadership development programs drove improved business results as compared to 6 percent of companies without such a program. Similarly, 86% of companies with leadership development programs responded rapidly to changing market conditions whereas only 52% of companies with immature programs were able to do so.
Developing individual leaders
Traditionally, leadership development has focused on developing the leadership abilities and attitudes of individuals.
Different personal traits and characteristics can help or hinder a person's leadership effectiveness and require formalized programs for developing leadership competencies.
Classroom-style training and associated reading for leadership development may ail from the possible divergence between knowing what to do and doing what one knows; management expert Henry Mintzberg is one person to highlight this dilemma. It is estimated[by whom?] that as little as 15% of learning from traditional classroom-style training results in sustained behavioral change within workplaces.
- Individual learner characteristics
- Quality and nature of the leadership development program
- Support for behavioral change from the leader's supervisor.
Military officer-training academies, such as the Royal Military Academy Sandhurst, go to great lengths to accept only candidates who show the highest potential to lead well. Personal characteristics that are associated[by whom?] with successful leadership development include leader motivation to learn, a high achievement drive and personality traits such as openness to experience, an internal focus of control, and self-monitoring. In order to develop individual leaders, supervisors or superiors must conduct an individual assessment. 
Development is also more likely to occur when the design of the development program:
- Integrates a range of developmental experiences over a set period of time (e.g., 6–12 months). These experiences may include 360 degree feedback, experiential classroom style programs, business school style coursework, executive coaching, reflective journaling, mentoring and more.
- Involves goal-setting, following an assessment of key developmental needs and then an evaluation of the achievement of goals after a given time period.
Among key concepts in leadership development one may find:
- Experiential learning: Positioning the individual in the focus of the learning process, going through the four stages of experiential learning as formulated by David A. Kolb:
- Concrete experience.
- Observation and reflection.
- Forming abstract concepts.
- Testing in new situations.
- Self efficacy: The right training and coaching should bring about 'self efficacy' in the trainee, as Albert Bandura formulated: a person's belief about his capabilities to produce effects.
- Visioning: Developing the ability to formulate a clear image of the aspired future of an organization unit.
- Attitude: Attitude plays a major role in being a leader.
Developing leadership at a collective level
Leadership can also be developed by strengthening the connection between, and alignment of, the efforts of individual leaders and the systems through which they influence organizational operations. This has led to a differentiation between leader development and leadership development.
Leadership development can build on the development of individuals (including followers) to become leaders. In addition, it also needs to focus on the interpersonal linkages in the team.
Following the credo of people as an organization's most valuable resource , some organizations address the development of these resources (including leadership).
In contrast, the concept of "employeeship" recognizes that what it takes to be a good leader is not too dissimilar to what it takes to be a good employee. Therefore, bringing the notional leader together with the team to explore these similarities (rather than focusing on the differences) brings positive results. This approach has been particularly successful in Sweden where the power distance between manager and team is small.
The development of "high potentials" to take over leadership when the time comes the current leadership to leave their positions is known as succession planning. This type of leadership development usually requires the extensive transfer of an individual between departments. In many multinationals, it usually requires international transfer and experience to build a future leader.
Succession planning requires a sharp focus on the organization's future and vision, in order to align leadership development with the future that the organization aspires to create. Thus successive leadership development is based not only on knowledge and history but also on a dream. For such a plan to be successful, a screening of future leadership should be based not only on "what we know and have" but also on "what we aspire to become".
Persons involved in succession planning should include current leadership members who can articulate the future vision. Three critical dimensions should be considered:
- Skills and knowledge;
- Role perception and degree of acceptance of leading role; and,
- Action learning
- Organization development
- Executive development
- Executive education
- Business acumen
- Collaborative leadership
- Leadership Studies
- Trait Leadership
- How to Attack the Business Skills Mismatch, Chief Learning Officer Magazine, by Rommin Adl (August 2013)
- Leadership development: is it worth the money?, Center for Creative Leadership, by Jennifer Martineau, Emily Hoole, and Tracy Patterson
- The Leadership Development Handbook, Center for Creative Leadership and Organizational Behavior, 4th ed, by Stephen Robbins, Bruce Millet & Terry Waters-Marsh, published by Prentice Hall
- See S. Cromwell & J. Kolb 2004, "An examination of work-environment support factors affecting transfer of supervisory skills training to the work place", Human Resource Development Quarterly, Vol. 15 No. 4, pp. 449-71.
- See Baldwin, T. & Ford, K. (1988), "Transfer Of Training: A Review And Directions For Future Research', Personnel Psychology, Spring, Vol. 41 Issue 1, p63-105
- Organizational Behavior, 4th ed, by Stephen Robbins, Bruce Millet & Terry Waters-Marsh, published by Prentice Hall
- ADRP 6-22, Army Leadership (PDF). United States Army. August 2012. p. 7-9.
- Albert Bandura (1977). "Self-efficacy: Toward a unifying theory of behavioral change". Psychological Review. 84: 191–215.