Good leadership is not just about having someone to approve budgets or conduct performance reviews. It’s about shaping the future of your organization, inspiring teams, and making tough decisions – with a careful blend of clarity and compassion. Despite its obvious importance, many companies underestimate what it really takes to develop strong leaders. Leadership isn’t something that people automatically excel at when given a title. It’s a skill, a mindset, and, frankly, an art form that needs nurturing.

Leadership has always been critical to organizational success, but it’s never been more evident than today. According to a Gallup study, companies with engaged and competent leaders outperform their competitors by up to 147%. Leadership impacts morale, productivity, innovation, and even employee retention rates.

On the flip side, poor leadership has its costs. A separate study by DDI found that bad leadership contributes significantly to workplace stress. Beyond stress, it stifles growth and pushes high-performing employees out the door. The proportion of high-potential talent considering quitting has increased exponentially to 21% in the last few years, because they don’t get the opportunities for growth and development they expect. Talent is hard enough to find without losing it to poor leadership. Trust in immediate managers dropped to just 29% in 2024, showing how people in leadership positions are not being adequately invested in and supported.

Unfortunately, many organizations fail to focus on the root of the problem. Leadership isn’t just about choosing the right person for the role; it’s about cultivating a culture where leadership qualities are fostered, recognized, and rewarded across the entire organization.

Good leaders share some key traits, including emotional intelligence, strong communication skills, and a strategic mindset. They don’t just issue orders; they mentor, motivate, and empower. Bad leaders, on the other hand, often lead through fear or ego. They command instead of collaborate, and they micromanage rather than trust.

The stakes are high for organizations when it comes to getting leadership right or wrong. Here are six strategies to develop and nurture leadership in your organization.

1. Start with a Clear Vision of Leadership

Before cultivating leadership, define what it looks like for your organization. What qualities are most important to your company’s success? Do you value creativity over structure? Collaboration over delegation? Ensure your leadership vision aligns with your organizational goals and values.

Once defined, communicate that vision clearly. Everyone — from interns to C-suite executives — should understand what “good leadership” means at your organization. Without this shared understanding, you’re working in silos.

2. Invest in Leadership Training

Even the most talented employees need guidance to become exceptional leaders. Relying on instincts alone won’t cut it. Offer structured leadership training programs tailored to your company’s needs.

This could include workshops on emotional intelligence, conflict resolution, strategic thinking, or even improvisation (yes, it can sharpen communication and adaptability). External courses, internal mentorship programs, and executive coaching are all excellent ways to ensure leadership potential doesn’t go untapped.

3. Implement the 9 Box Grid

If you haven’t used the 9 box grid yet, get ready for a game-changer. This simple yet effective tool helps evaluate employees based on their performance and potential. Here’s how it works:

• The vertical axis represents an employee’s leadership potential.
• The horizontal axis measures their current performance.
• Employees are then plotted into one of nine boxes, ranging from “low performance/low potential” to “high performance/high potential.”

The 9 box grid helps identify who is ready for leadership positions, who needs development, and who might require reevaluation. It also helps ensure leaders are chosen not just based on performance but on their capacity to grow and lead.

And here’s a top tip to help your company go further… Don’t reserve the grid for HR teams only. Share insights transparently with employees to encourage self-reflection and growth. Part of a strong leadership culture is that everyone understands what it is and feels invested in it.

4. Create a Culture of Feedback

Leadership development can’t happen without feedback. Frequent, constructive feedback enables employees to understand their strengths and identify areas of improvement.

Feedback shouldn’t just come from supervisors. Peer and even subordinate feedback can provide invaluable insights into blind spots. Leadership 360 assessments are a fantastic tool for this, offering a multi-dimensional view of leadership effectiveness.

5. Recognize and Reward Leadership Qualities

People repeat the behaviors you reward. If teamwork, adaptability, or empathy are qualities you want your leaders to embody, reward them early and often.

For example, an employee who mentors a new hire should be recognized just as much as the one who clinches a big deal. This shows the organization values leadership behaviors, not just results.

6. Lead by Example

This might sound obvious, but it’s often overlooked. Your organization’s senior leaders set the tone for the entire team. If they embody the leadership qualities you’re promoting, great! If they don’t, it’s time to address the gap.

Leadership isn’t immune to the “walk the talk” rule. Employees are far more likely to adopt leadership values if they see them modeled by the current leadership team. No amount of workshops or training can fix a culture where actions don’t match words.

Developing a strong culture of leadership within your organization is no easy task, but it’s one of the most impactful investments you can make. When leadership is nurtured intentionally, it becomes a self-reinforcing cycle. Strong leaders inspire the next generation of leaders, creating a legacy that outlasts any single individual.

If you want to build a robust leadership culture, start by rethinking your current strategies. Implement tools like the 9 box grid, focus on continuous feedback, and ensure leadership is modeled at every level. It could very well be the key for a breakthrough in the performance and culture of your organization.