How to Build a Leadership Training Program for Emerging Leaders in Small Businesses

As your small business grows, you’ll need leaders who can guide teams, solve complex problems, and steer your company toward its future goals. Developing leadership internally can be a highly cost-effective and impactful strategy, ensuring that your most talented employees grow into the management roles they’ll need to fill as the business expands.

This guide will walk you through the steps to identify high-potential employees, create hands-on leadership opportunities, and build a structured leadership development program using mentorship, stretch assignments, and accessible learning resources. By investing in your emerging leaders, you’ll build a pipeline of skilled managers ready to lead your business to new heights.

Leadership training isn’t just for large corporations; it’s critical for small businesses too, particularly as they scale. When your business is small, leadership roles tend to be informal, with one or two people making most of the decisions. But as the company grows, those informal structures can become bottlenecks that slow down progress. This is where leadership training comes in—it helps create a stronger foundation for distributed leadership, where multiple people can take on responsibility and lead different parts of the business effectively.

Leadership development also boosts employee retention. High-potential employees who see a path for growth and development are more likely to stay with the company long-term, reducing costly turnover. Moreover, having a leadership development program gives your company the ability to promote from within, saving the time and expense of hiring externally.

Before you can train emerging leaders, you need to identify who they are. Not every high performer is suited for leadership, so it’s important to differentiate between employees who excel at their current roles and those who have the potential to lead others.

• Initiative: Employees who go beyond their job descriptions to solve problems or take on new challenges without waiting for direction.
• Emotional Intelligence: Individuals who demonstrate self-awareness, empathy, and strong interpersonal skills.
• Collaboration and Influence: Employees who work well in teams and influence others positively, without relying on authority.
• Adaptability: People who thrive in changing environments and are able to pivot when faced with challenges.
• Vision: Individuals who demonstrate an understanding of the company’s long-term goals and align their work with those objectives.

1. Performance Reviews: Use performance reviews to spot employees who consistently exceed expectations and demonstrate leadership traits.
2. Peer Feedback: Gather input from peers and supervisors on how well an employee collaborates, solves problems, and takes initiative.
3. Observation: Watch how employees handle difficult situations, whether they take ownership, and how they respond to constructive feedback.

Example: In a small marketing agency, you might identify a graphic designer who frequently takes the lead on projects, mentors junior designers, and communicates effectively with clients. This employee may have the potential to lead the creative team in the future.

Once you’ve identified potential leaders, the next step is to provide them with leadership opportunities. The most effective leadership training happens on the job through stretch assignments—projects that challenge employees to operate outside their comfort zones and develop new skills.

• Leading a Cross-Functional Team: Assign employees to lead teams made up of individuals from different departments. This helps them build the coordination, communication, and decision-making skills needed to be effective leaders.
• Managing a New Project: Give high-potential employees ownership of a project, from planning to execution. This encourages them to develop their project management skills, problem-solving abilities, and accountability.
• Taking on a Mentor Role: Ask emerging leaders to mentor more junior employees. Mentorship is a great way for potential leaders to develop their coaching and communication skills while helping the company grow its talent base.
• Participating in Strategic Decision-Making: Involve emerging leaders in high-level meetings where key business decisions are made. This exposure to strategic planning helps them develop a broader understanding of the business and its long-term goals.

1. Delegate Leadership Tasks: Start small by delegating leadership tasks to potential leaders, such as running team meetings or overseeing specific parts of a project. Gradually increase the complexity of the tasks as they gain confidence.
2. Provide Feedback: Regularly check in with employees during their stretch assignments, offering feedback and guidance to help them develop their leadership abilities. This feedback should be specific and actionable, focusing on both strengths and areas for improvement.

Example: In a tech startup, an emerging leader could be tasked with managing a new product launch. They would need to coordinate with marketing, sales, and development teams, while also reporting progress to the company’s executives.

A structured development path is key to ensuring that your emerging leaders have the resources and support they need to grow. This program should be a blend of formal and informal training opportunities, ensuring that employees have the chance to develop both their leadership skills and their technical competencies.

1. Online Leadership Courses: Many online platforms, such as LinkedIn Learning, Coursera, and Udemy, offer leadership courses tailored to small business environments. Courses on topics like communication, conflict resolution, and decision-making can be valuable tools for developing foundational leadership skills at a low cost.
2. Mentorship Programs: Pair emerging leaders with senior leaders or external mentors who can provide guidance and help them navigate complex situations. Mentorship programs should include regular check-ins and set specific learning objectives.
3. Workshops and Seminars: Host in-house leadership workshops or send employees to external leadership seminars. These can be focused on practical skills like time management, negotiation, and team-building.
4. Leadership Books and Articles: Provide employees with access to books and articles on leadership development. For example, “Leaders Eat Last” by Simon Sinek or “The Five Dysfunctions of a Team” by Patrick Lencioni can offer valuable insights for aspiring leaders.

1. Create a Leadership Development Curriculum: Design a leadership curriculum that outlines the skills and competencies your leaders need to develop. Include a mix of online courses, mentorship opportunities, and hands-on leadership experiences.
2. Set Development Goals: Work with each emerging leader to set personal development goals, such as improving communication, learning conflict management, or mastering delegation.
3. Track Progress: Use regular performance reviews and feedback sessions to track each employee’s progress in the program. Make adjustments as needed to ensure they’re developing the skills necessary for future leadership roles.

Example: In a growing small business, you could establish a leadership development program that includes quarterly leadership workshops, a mentorship program with the company’s executives, and an online learning component where employees complete one leadership course per quarter.

Mentorship is one of the most impactful ways to develop leadership skills in emerging leaders. Pairing employees with experienced leaders inside or outside the company provides them with invaluable guidance and insights that are difficult to gain from formal training alone.

• Real-World Guidance: Mentors can offer advice based on their own experiences, helping mentees navigate the challenges of leadership in real time.
• Accountability: Mentorship relationships offer a level of accountability that helps emerging leaders stay on track with their development goals.
• Soft Skills Development: Mentorship is particularly effective for building leadership soft skills such as emotional intelligence, active listening, and team motivation.

1. Match Mentors with Mentees: Assign mentors based on the mentee’s specific leadership goals. If the mentee wants to develop strategic thinking skills, pair them with someone who excels in long-term planning and vision-setting.
2. Set Clear Expectations: Outline the goals and expectations for both the mentor and mentee. How often should they meet? What specific leadership skills should be the focus of their sessions?
3. Regular Check-Ins: Ensure that mentors and mentees meet regularly (bi-weekly or monthly) to discuss challenges, track progress, and refine development strategies.

Example: A small retail company might pair a store manager showing leadership potential with a regional manager. The mentor can help them navigate difficult staffing decisions, learn how to improve store performance, and plan for long-term growth.

For small businesses that lack the budget for expensive leadership courses or seminars, online platforms can offer a wealth of leadership training content at a fraction of the cost. These platforms provide self-paced courses and curated learning paths that can develop leadership skills in communication, project management, and strategic thinking.

• LinkedIn Learning: Offers comprehensive leadership development courses that are easy to access and affordable. Topics include emotional intelligence, managing virtual teams, and decision-making.
• Coursera: Provides access to university-level courses on leadership, including programs from prestigious institutions like Yale and Stanford. You can find both free and paid options.
• Udemy: Offers affordable courses covering leadership fundamentals, team management, and personal development. These courses can be purchased individually, making it a flexible option for small budgets.

1. Curate a Course List: Select courses that align with your company’s leadership development needs. Focus on topics like team-building, conflict management, and strategic planning.
2. Incorporate Learning into the Workweek: Encourage employees to complete one leadership course per quarter. Provide time during work hours for online learning if possible.
3. Create Learning Goals: Set clear learning goals for each employee, ensuring they focus on leadership competencies most relevant to their roles.

Example: A growing e-commerce company might implement LinkedIn Learning courses for team leads to develop skills in managing remote teams, strategic decision-making, and performance reviews.

Building a leadership training program for emerging leaders is one of the most impactful investments a small business can make. By identifying potential leaders early, offering them challenging projects, and providing ongoing mentorship and learning opportunities, you create a sustainable leadership pipeline that will drive your business forward.

While budget constraints may limit your options for expensive leadership programs, cost-effective solutions such as stretch assignments, mentorship, and online courses offer powerful ways to develop leadership skills internally. These programs not only help retain top talent but also ensure that your business has the leadership capacity to grow and succeed in the long term.

Ready to build your leadership program? Contact HR Launcher Lab to create a customized leadership development plan for your small business and ensure your emerging leaders are ready to drive your company’s success!