Preparing high-potential talent for leadership roles is a key priority for most businesses.
The problem is that organizations struggle to do it well.
In a global study of nearly 16,000 leaders by Development Dimensions International (DDI), more than 50% of CEOs said their number one concern is not being solidly set up to develop their next generation of leaders. This is highly likely why nearly a third of newly hired executives fail within the first 18 months of their role.Lacking a robust leadership pipeline can lead to catastrophic consequences. It is crucial for organizations to prioritize leadership development to ensure intergenerational collaboration and long-term organizational success. According to research from the Harvard Business Review, promoting and hiring of new executives who fail leads to a $255 billion annual reduction in total shareholder returns each year. This represents a significant impact on organizational performance and stability. Leadership development is also a significant opportunity for organizations to invest in mentoring and preparing future leaders for ongoing success.
Leadership development is more than just a buzzword—it’s a strategic imperative for any organization aiming for long-term organizational success. As senior leaders transition out of their roles, the need to develop the next generation of leaders becomes increasingly urgent. In today’s fast-paced business environment, organizations must create a culture that prioritizes continuous learning, emotional intelligence, and self-awareness. By fostering these qualities, companies can ensure their future leaders are equipped with the strategic thinking and adaptability needed to navigate complex challenges. According to the Harvard Business Review, organizations that implement continuous feedback loops and invest in high-potential employee development are far more likely to build a robust pipeline of future leaders. Ultimately, leadership development is not a one-time event but an ongoing process that is critical to the growth, resilience, and success of any business.
Understanding the Next Generation
The next generation of leaders brings a fresh perspective to the workplace—one that is defined by diversity, technological fluency, and a strong desire to make a meaningful impact. These emerging leaders value flexibility, work-life balance, and opportunities for personal and professional growth. To attract and retain this new wave of talent, organizations must cultivate a culture that champions leadership values such as empathy, diversity, and innovation. Senior leaders play a pivotal role in this transformation by rethinking traditional leadership development approaches and embracing new ideas. Providing external exposure, mentorship, and continuous learning opportunities is essential for nurturing the next generation of leaders. By understanding and aligning with the values and aspirations of emerging leaders, organizations can create tailored leadership development programs that foster engagement, innovation, and long-term growth.
Strategic Planning for Leadership Development
Effective leadership development doesn’t happen by accident—it requires a deliberate and strategic approach. Organizations must first identify the skills and competencies their future leaders will need to succeed in an ever-evolving world. This means setting clear goals, defining measurable objectives, and establishing metrics for success. Allocating the right resources and budget to leadership development initiatives is equally important. Senior leaders must demonstrate a strong commitment to the process by offering guidance, mentorship, and ongoing support to emerging leaders. By embedding leadership development into the organization’s strategic plan, companies can ensure they are cultivating a steady pipeline of future leaders who are ready to meet the challenges ahead and drive the business forward.
Building a Strong Foundation
A strong foundation is the cornerstone of successful leadership development. Organizations must create an environment where learning, growth, and development are not just encouraged but expected. This involves providing employees with access to new skills, knowledge, and experiences that will prepare them for future leadership roles. Clear expectations and well-defined goals for leadership development help set the stage for success, while regular feedback and coaching ensure that emerging leaders stay on track. By investing in a culture that values continuous learning and development, organizations empower their employees to grow, succeed, and ultimately become the leaders of tomorrow.
There are several proven strategies companies can take to groom high-potential talent to really hit their stride:
1. Identity who your high potentials are
How do you know which team members have what it really takes to be a successful leader? Identifying these high potential employees can be confusing, as we instinctively look to the workers who perform the best to be the presumed future leaders.
Start with a well-defined profile. Ask your managers and external experts to figure out the key qualities and competencies that drive success in specific functions. The ability to demonstrate resilience, self-awareness, and navigate complex emotional and identity-related challenges is just as important as technical skills. Successful leaders must have a penchant for bringing out the best in others, authenticity as a person, open to feedback, conceptual thinking, adaptable, showcase a strong propensity to deal with change and challenges, and have a passion for results.
2. Supply practical coaching and feedback
The next generation of leaders are yearning for more coaching and feedback. The DDI study found 30% are looking for more coaching than they’re getting today. By arming them with what they want, these go-getters will benefit from hands-on opportunities to ramp up their skillsets and learn directly from the people they will be taking the reins from.
As noted in Forbes by professional business coach and mentor Inga Birlinka, through coaching and mentorship companies “can develop new generations of accountable and courageous managers. Every interaction and feedback may change into an opportunity to enhance the(ir) leadership skills and strategic thinking.”
When it comes to providing constructive feedback, Forbes Coaches Council advises to “highlight precise areas where they are excelling, as well as those requiring attention….(and) offer concrete suggestions for how they can specifically improve. This will help them focus on discrete outcomes as they challenge themselves to embrace new and expanded leadership roles.”
The coaching process should also involve active listening, where coaches not only advise, but engage in two-way conversations, answering questions, listening attentively and inspiring people to maximize their talents. Strong relationships built on trust and emotional intelligence are essential for leadership development, as they foster interpersonal connections and mutual care. Moreover, the earlier coaching and mentoring starts, the better. This allows companies to create coaching plans that focus on leadership blind spots and areas for improvement.
Developing leaders is an ongoing process that requires continuous support, shared values, and nurturing to ensure future leaders are equipped to succeed.
3. Develop robust leadership development programs
To be truly impactful, leadership development cannot be an annual or ad hoc endeavor. Businesses should have well-planned modules that set out frequent, experiential activities and ideally, a workplace environment where development is a core part of the overall company culture. These programs should be designed as a learning process that promotes engagement, critical thinking, and self-awareness through interactive methods and reflection activities.
Chevron has a variety of leadership development programs that cater to where employees are in their careers and tailor activities based on that. For example, the company’s ‘Aspiring Leaders Program’ is geared to early career employees and specializes in developing leadership and managerial capabilities. For managers, Chevron offers the ‘Emerging Leaders program,’ where the focus is on honing more advanced leadership skills like coaching, feedback and delegating. Those in more senior positions participate in learning experiences where the emphasis is on setting strategy and leading innovation. These programs are structured to support continuous development, ensuring ongoing growth and improvement at every stage of an employee’s career.
“We want these leaders to be able to do everything from drive the company’s vision to share inspirational storytelling among their teams,” says Stacy Eng, Chevron’s Chief Learning and Talent Officer.
It’s also pivotal for leadership programs to offer opportunities to gain broad exposure across the business. Speaking with Deloitte, Summer Houchens, an IT executive from Eli Lilly, said she had rotations in numerous areas of the business which made her more well-rounded. “Early on, I was given opportunities alongside my finance and marketing counterparts,” Houchens says. “I also had a mentor who worked with me on my communication skills. As we think about succession planning… think about the training necessary for leaders to help them grow.” These experiences are designed to build leadership capacity, helping individuals develop the skills and agility needed to lead effectively across the organization.
Another critical point is to have the employees play an active role in developing their growth plans so that they align with their career goals and match the succession plans of the organization. Cultivating the right mindset—one that is growth-oriented, adaptable, and committed to continuous learning—is essential for leaders to thrive and inspire their teams.
To stay competitive, organizations should rethink traditional leadership development approaches and adapt them to meet the evolving needs of the next generation of leaders.
4. Foster Emotional Intelligence (EQ)
In business circles, the importance of EQ has grown significantly over the last decade. The pandemic made EQ an absolute must-have for leaders. For future leaders, learning how to show authenticity, empathy and other key EQ hallmarks such as compassion, support and encouraging colleagues to openly express themselves, have now become widely adopted. However, fear—such as fear of being compared, proving oneself, or facing societal opposition—often presents emotional challenges for new leaders and can hinder their confidence and decision-making. High potentials must fine-tune these skills in order to be successful.
Lee Eisenstaedt of the Leading with Courage Academy, says EQ is “a better predictor of success than IQ or technical skills. So is self-awareness. To understand and improve both, all high-potential leaders and managers should have the opportunity to take a 360-degree assessment of their EQ. For those with the courage to ask others how they’re doing, they are game-changing.” Achieving a high level of emotional intelligence is essential for emerging leaders to enhance their effectiveness and impact.
Additionally, developing strong cultural intelligence is crucial for future leaders to foster inclusivity, adaptability, and ethical decision-making in diverse organizational environments.
5. Training on managing dispersed teams
“The future of work (is and will continue to be) filled with technology, data, flexibility, and mobility,” the report authors write. “Companies must design safe workplaces, mobile solutions, and hub work locations that let people move to where work may be, operate in a safe and healthy way, and collaborate easily.” To stay competitive and drive change effectively, organizations and leaders must adapt to new work environments, adjusting to rapid market changes, technological advancements, and new ways of working. Therefore, organizations must train the next generation of leaders to learn how to effectively manage employees working in highly flexible contexts, including a mix of hybrid, fully remote and specially built ‘hub’ offices.
A cornerstone of this is grooming talent to be proactive communicators. That means training them to schedule regular check-ins with team members, particularly those who are remote, to ensure they stay connected, feel a sense of belonging and are fully up to date on what’s going on with and company.
While the data points to remote workers being productive, those preparing to lead remote/hybrid teams must have the tools, metrics and know-how to monitor the productivity of employees wherever they work from. “It’s important everyone understands that his or her flexible work schedule is predicated upon meeting the established goals and completing all assigned tasks,” as noted by The HR Team.
While productivity is pivotal, a good manager of flexible workers will learn to show employees they are trusted to be accountable and take personal responsibility for fulfilling work duties. Next-generation leaders must learn how to encourage collaboration and creativity amongst distributed teams to unify groups spread out across many locations and different time zones.
And of course, when flexible workers deliver, future leaders must be trained on how to appropriately and meaningfully recognize and acknowledge their contributions. Validation is imperative to boosting morale, keeping employees engaged, and enhancing employee retention. Moving forward, continuous progress in leadership development is essential to ensure organizations and their next-generation leaders are prepared for future challenges.
Leadership Culture: Embedding Leadership Values
Developing the next generation of leaders requires more than just training programs—it demands a leadership culture that is deeply rooted in shared values. Embedding leadership values such as empathy, diversity, and innovation into the fabric of the organization is essential for long-term success. Senior leaders must lead by example, modeling these values in their daily actions and decision-making. Creating opportunities for employees to practice and apply these values, supported by regular feedback and coaching, helps reinforce their importance. According to research from the Harvard Business Review, companies that prioritize leadership development and integrate leadership values into their culture consistently outperform their competitors and achieve greater long-term success. By fostering a supportive and inclusive environment, organizations can inspire the next generation of leaders to drive growth, innovation, and positive change.
High potential talent are challenge-seeking and creative people who are bursting with gumption to take on leadership roles. By heeding some of the key strategies highlighted here, they stand a strong chance to be set up to really take off in the future and bring their organizations to the next level.
Creating Tomorrow’s Leadership Today. A Scorecard
Explore ‘what it means to be a leader’ in two parts. Part one is a series of statements that challenge where you are today, and part two provides a simple assessment of the mindset that currently shapes your team’s behavior; and the mindset you need moving forward. Discover actionable insights and practical strategies that will help you transform your leadership approach.
