Leadership development encompasses all systematic measures designed to strengthen the competencies of current and future leaders. HR coordinates programs such as coaching, mentoring, and potential assessments to secure leadership succession in the long term. Success depends on identifying individual strengths and sustainably transferring what has been learned into everyday work.

Definition: What Is Leadership Development?

Leadership development (also known as management development) refers to the targeted promotion of leadership competencies and is a specialized area of human resource development. It includes all measures and instruments aimed at positively influencing and advancing the thinking and actions of leaders.

Unlike general employee development, which targets all employees, leadership development focuses specifically on individuals with current or future leadership responsibilities. It's not just about technical knowledge, but primarily about personal and social competencies that enable effective leadership.

Leadership development pursues two central goals: First, the continued development of existing leaders so they can meet evolving demands. Second, the identification and nurturing of leadership talent to secure successors for key positions.

Why Is Leadership Development Important?

Good leaders don't develop on their own. In times of talent shortages, it's becoming increasingly important for organizations to develop leadership talent internally rather than searching for them in the external job market. Additionally, demographic shifts mean that baby boomers will be retiring in the coming years, making systematic succession planning essential.

Leadership development also pays off in terms of employee retention. Development opportunities signal appreciation and create career perspectives—both factors that keep high potentials within the organization. Studies also show that leadership quality directly impacts team job satisfaction, productivity, and innovation capability.

Digital transformation and new work models like remote or hybrid work place additional demands on leaders. Traditional leadership competencies are no longer sufficient—modern leadership requires agility, digital competence, and the ability to lead and motivate teams from a distance.

HR's Role in Leadership Development

The HR department is the central hub for leadership development. HR takes on three essential functions:

Supporting: HR helps leaders with their development and supports departments in finding, selecting, and implementing suitable development programs. HR aligns these programs with strategic business objectives.

Facilitating: Leadership development only works through regular exchange between developers and those being developed. HR ensures this dialogue and coordinates collaboration between coaches, mentors, and participants.

Advising: HR provides methodological guidance on which measures are suitable for achieving specific goals. At the same time, HR critically examines whether initiatives make organizational sense and deliver the desired ROI.

What Competencies Do Leaders Need?

Successful leaders require a broad range of competencies that can be divided into four areas:

Technical Competence

Leaders must understand their field and be capable of strategic thinking. This includes industry knowledge, business acumen, and the ability to assess market developments. However, technical competence alone doesn't make a good leader.

Methodological Competence

This includes skills such as project management, structured decision-making, problem-solving, and time management. Leaders must be able to manage processes, plan resources, and monitor results.

Social Competence

Dealing with people is at the heart of good leadership. Communication skills, empathy, conflict resolution, and team leadership are among the most important soft skills. Leaders must motivate employees, provide feedback, and shape different personalities into a functioning team.

Personal Competence

Self-reflection, resilience, and emotional intelligence form the foundation for authentic leadership. Leaders must know their own strengths and weaknesses, handle stress effectively, and serve as role models for their teams.

Methods and Instruments of Leadership Development

Human resource development for leaders offers a broad range of methods. These measures can be categorized by their relationship to daily work:

On-the-Job Measures

These methods take place directly in the work context. They include job rotation (systematic switching between positions), project leadership, deputy roles, or taking on special assignments. The advantage: leadership experience is gained immediately, and transfer to daily work happens automatically.

Near-the-Job Measures

Coaching and mentoring are the best-known representatives of this category. In coaching, an external or internal coach individually supports the leader in their development. In mentoring, an experienced leader shares their knowledge with a less experienced person over an extended period. Peer consulting and leadership circles also belong to near-the-job measures.

Off-the-Job Measures

Seminars, workshops, training programs, and MBA programs take place outside the workplace. They are particularly suitable for conveying theoretical knowledge and methodological foundations. The challenge lies in transferring what has been learned into daily work.

Potential Assessment and Diagnostics

Before development measures begin, it should be clear where strengths and development areas lie. Potential assessments and online assessments help objectively evaluate leadership aptitude. Instruments like 360-degree feedback provide perspectives from multiple angles—supervisors, colleagues, and direct reports.

Objective diagnostics are gaining importance. Digital platforms like Aivy enable scientifically validated potential assessments that reveal strengths and development potential independent of subjective evaluations. This reduces bias in identifying leadership talent and creates a data-driven foundation for individual development plans.

Leadership Development in 5 Steps

A successful leadership development program follows a structured process:

1. Goal Definition: Which leadership positions need to be filled in the short, medium, and long term? What competencies are required? The answers should align with business strategy.

2. Potential Assessment: Which employees show leadership potential? Systematic assessments, performance evaluations, and structured conversations help here. It's important to look not only at past performance but also at future development capability.

3. Create Development Plan: An individual plan is created for each candidate, defining learning objectives, measures, timeframe, and responsibilities. The plan should combine various methods.

4. Implementation: The planned measures are carried out. Continuous support from HR and mentors is crucial to ensure learning transfer.

5. Success Measurement: Were the goals achieved? Metrics such as the internal succession rate, employee satisfaction among developed leaders, or turnover rate in leadership positions provide insight into success.

Frequently Asked Questions About Leadership Development

What's the difference between leadership development and employee development?

Employee development is the umbrella term for all measures to advance employees. Leadership development is a subset that focuses specifically on individuals with current or future leadership responsibilities. The content differs accordingly: while general employee development often covers technical training, leadership development emphasizes social and personal competencies.

How long does it take to develop a leader?

Developing into a leader is a continuous process that can take several years. Structured programs for emerging leaders typically run for 12 to 24 months. It's important to understand that leadership development doesn't end with a single training session but should be viewed as an ongoing process.

Which leadership development method is most effective?

There is no single method that is optimal for all situations. Research shows that a combination of on-the-job experience, structured feedback, and individual support (coaching/mentoring) yields the best results. The key lies in tailoring approaches to the individual's needs and the requirements of the target position.

How do you measure the success of leadership development?

Relevant metrics include: the rate of internally filled leadership positions, turnover rate among developed leaders, results from employee surveys, and performance development of the teams being led. Qualitative feedback from participants and their supervisors also provides valuable insights.

What does leadership development cost?

Costs vary significantly depending on the measure: internal mentoring incurs low direct costs, while external coaching programs or MBA degrees require substantial investments. Typical budgets for structured programs range from €5,000 to €20,000 per person per year. Against this stand the high costs of poor leadership appointments, which can amount to several times the annual salary.

Who should participate in leadership development programs?

Target groups include both current leaders who want to develop further and high potentials being prepared for future leadership roles. Selection should be based on systematic potential assessments—not solely on seniority or past technical performance.

Conclusion

Leadership development is not an optional extra task but a strategic necessity for every organization. Given talent shortages, demographic change, and evolving leadership requirements, companies must systematically invest in their leadership talent.

The key to success lies in combining sound diagnostics, individual development, and sustainable transfer into daily work. HR plays a central role here—as architect, facilitator, and companion of development programs.

Organizations that don't leave leadership to chance but develop it strategically are more successful in the long term. They retain talent, secure succession in key positions, and create a leadership culture that motivates employees and drives the business forward.

Want to objectively identify leadership potential and create a foundation for targeted development? Learn how scientifically validated aptitude diagnostics support leadership development.

Sources

• Führungskräfteentwicklung (Leadership Development). Gabler Wirtschaftslexikon, 2018. https://wirtschaftslexikon.gabler.de/definition/fuehrungskraefteentwicklung-36145
• Bartscher, T., Nissen, R.: Fernkurs HR-Management: Grundlagen der Personalentwicklung. Freiburg, 2017.
• Führungskräfteentwicklung: Trends und Maßnahmen für 2026 (Leadership Development: Trends and Measures for 2026). Brainers Hub, 2025. https://brainershub.com/fuehrungskraefteentwicklung
• Leadership Monitor 2025. HR WORKS, 2025. https://www.hrworks.de