Why leadership development matters more than ever

Across industries, organisations are rapidly realising that leadership development is no longer a “nice to have”; it is a business necessity. In an environment defined by hybrid work, economic uncertainty, and shifting employee expectations, leaders play a pivotal role in shaping resilience and performance. Effective leadership programs are helping businesses navigate complex change while ensuring their people remain engaged, adaptable, and connected to purpose.

Leadership development is not simply about producing confident managers or promoting high performers. It is about building capacity across all levels of an organisation so that leaders, both formal and informal, can guide teams through ambiguity, collaboration, and transformation. According to people2people’s Employment and Salary Trends Report, 67% of HR leaders across Australia, New Zealand, and the UK have made leadership development their top priority for 2025, reflecting an understanding that talent retention and organisational growth hinge on this investment.

The modern workplace has evolved into a network of interconnected teams. For businesses to thrive, leadership must also evolve from a command and control model to one grounded in interdependence, collaboration, and continuous learning. Leadership development is therefore not a single event, but a continuous process of helping individuals see themselves, their teams, and their challenges through a broader, more adaptive lens.

“The real goal of leadership development is to help people function effectively in a network of teams, not just to give them skills, but to shift their mindset.”

On a recent Through the HR Lens Market Update, Host Leanne Lazarus, Group Specialist Recruitment Manager at people2people, was joined by Guest Keegan Luiters, Presenter, Facilitator, Coach and Trainer, to discuss whether businesses are truly getting leadership development right, and what that looks like in practice. Their discussion unpacked how organisations can future-proof their leadership pipelines by combining empathy, adaptability, and purpose-driven learning.

Keegan explained that traditional programs often focus on technical competencies but fail to address the deeper mindset shifts leaders need. The difference between a “dependent conformer,” an “independent achiever,” and an “interdependent collaborator,” he noted, lies in how leaders engage with others. Interdependence, the ability to collaborate across teams and functions, is what sets resilient organisations apart. When leaders build this capacity in themselves and others, the benefits flow through culture, performance, and innovation.

Leanne highlighted that many HR professionals are now seeing leadership development become a core requirement in generalist roles. This reflects a growing understanding that leadership capability should be embedded across all levels of the business, not reserved for executives. As Keegan pointed out, when leaders can discuss challenges openly with peers rather than relying solely on hierarchy, problem-solving becomes faster, more creative, and more sustainable.

However, challenges remain. Too often, individuals are promoted into leadership roles because of their technical expertise, not their ability to lead people. The transition from individual contributor to leader can feel like a leap into the unknown, and without targeted support, new managers risk reaching what Keegan calls the “Peter Principle” stage, being promoted to their level of incompetence. He stressed that “incompetence is not a permanent state,” but it does require intentional development, empathy, and coaching to bridge the gap.

So how can leaders adapt to a workforce made up of four generations working side by side? Leaders today must develop behavioural flexibility, the ability to adjust their approach depending on the person and the context. Keegan compared this to having fourteen clubs in a golfer’s bag: “You have to know which one to use for each situation.” Leaders who can shift between directive, coaching, and facilitative styles while staying true to their values create inclusive environments that support both performance and well-being.

Crucially, leadership development should not frame empathy and performance as opposing forces. The most successful leaders cultivate relationships that enhance accountability rather than dilute it. Strong connections enable open, constructive conversations about performance, where expectations are clear and feedback is trusted. As Keegan observed, “There’s no such thing as useful feedback from someone you don’t trust.” Building trust, therefore, is not a soft skill; it is a performance driver.

Many organisations also fall into the trap of applying technical solutions to adaptive challenges. Sending leaders on a course or giving them a framework does not always address the underlying beliefs or attitudes that shape behaviour. Effective development programs weave together mindset, context, and capability, focusing as much on how leaders think as on what they do.

Ultimately, the discussion between Leanne and Keegan underscored that leadership development is not about perfection, but progression. The best programs create self-awareness, agency, and hope, empowering leaders to navigate uncertainty and help others do the same.

How can organisations get leadership development right?

• Anchor programs in purpose. Leadership development should be tied to strategic goals and cultural aspirations, not just compliance or promotion cycles.
  
  
• Prioritise mindset, not just skillset. Encourage leaders to reflect on how they think, decide, and influence others, not only what they know.
  
  
• Design for context and diversity. Blend learning modes, leverage cross-generational mentoring, and adapt to different working styles.
  
  
• Build interdependent teams. Encourage collaboration across functions and empower informal leaders to contribute beyond their silos.
  
  
• Embed coaching as a norm. Equip leaders to have performance conversations rooted in trust, curiosity, and empathy.
  
  
• Measure impact through engagement and growth. Track how leadership development influences retention, innovation, and team connection, not just course completion rates.