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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 key to business success. A study by the Center for Creative Leadership revealed that 65 percent of companies with mature leadership development programs effectively 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.
Classroom-style training and associated reading is effective in helping leaders to know more about what is involved in leading well. However, knowing what to do and doing what one knows are two very different outcomes; 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
- the quality and nature of the leadership development program
- genuine 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: 1. concrete experience 2. observation and reflection 3. forming abstract concept 4. 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 between the individuals in the team.
In the belief that the most important resource that an organization possesses is the people that comprise the organization, some organizations address the development of these resources (even including the 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 effectively take over the current leadership when their time comes to exit 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 organization's future and vision, in order to align leadership development with the future the firm 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 be current leadership representing the vision and HR executives having to translate it all into a program. According to Meir Jacob and Amit Cohen (1995) three critical dimensions should be considered: 1. Skills and knowledge 2. Role perception and degree of acceptance of leading role 3. Self-efficacy (Albert Bandura). These three dimensions should be a basis of any leadership succession programme.
- 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
- Best Practices in Leadership Development and Organization Change, Best Practice Institute, by Louis L. Carter, Marshall Goldsmith, and David Ulrich by JosseyutotThe Leadership Development Guide Australian Leadership Development Centre
- 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. United States Army. August 2012. p. 7-9.