Organizations of all sizes and across industries are facing the dilemma of developing effective leaders while training budgets often remain flat at best. As the need for transforming internal candidates into truly effective leaders, for culture, for business growth and for organizational health, organizations must amplify leadership development efforts without breaking the bank. Here are five ways to get started.

The Double-Edged Sword of Leadership Training and Development Budgets

Traditional programs can be expensive, yet the cost of neglecting leadership training and development may be even higher — think disengaged employees, poor performance and high turnover. The challenge lies in finding innovative, low-cost strategies to cultivate leaders from within. The benefits of effectively cultivating internal candidates for formal leadership roles can be better retention of high performers and improved culture.

Companies want to realize the benefit of leaders developed to fit what the organization needs, and balance that with decreasing training budgets. Without careful and deliberate planned, the cost savings of promoting within can end up with a cast of unprepared leaders triggering employee disengagement and turnover, costing more overall.

Cost-Effectively Develop Leaders With a Classic: The 70-20-10 Model

To address the budgetary constraints while still fostering leadership growth, harness the 70-20-10 learning model that purports that 70% of learning occurs through on-the-job experiences, 20% through relationships and 10% through formal training.

Move this from a theory to a practical application for your internal leadership training and development. Lean into your company’s existing resources (i.e., your people, their projects and current processes) to bring out the best in your employees and developing leaders. Focus on practical, on-the-job learning to be the foundation of meaningful leadership experiences that don’t require a massive financial investment.

70%: Empowering Leadership Growth Through Real Experience

The 70-20-10 model puts the greatest emphasis on on-the-job experience. Informally, this 70% of “on-the-job” experience could be called “learn-by-doing” or “learn-by-doing-with-a-great-mentor-guiding you.”

Job Experiences as a Leader

There are many ways to create on-the-job opportunities for hands-on leadership development that put the learning experience directly in the context of real business challenges.

For instance:

• Enable job shadowing.
• Provide constructive feedback.
• Create stretch assignments that challenge skills.
• Allow employees to take on temporary leadership roles.
• Delegate projects specifically aimed at skills growth.
• Encourage the maintenance of learning logs or journals.
• Facilitate peer-to-peer coaching sessions.

By deliberately and consistently creating grounded experiences for future or new leaders, organizations can enable leadership development that has a low cost with high return potential.

Collaboration and Mentorship

Who has more time at work than they know what to do with? Likely, absolutely no one. And Leadership is not a one-person role. In fact, the best leadership happens in a respectfully collaborative environment.

Foster continuous learning through collaboration and mentorship with these approaches:

• Implement informal mentoring programs alongside reverse mentoring to promote mutual learning.
• Create opportunities for personalized, hands-on learning through structured mentorship relationships.
• Establish peer learning circles to facilitate collaborative problem-solving and shared experiences.
• Organize monthly peer leadership roundtables to discuss challenges and share insights.
• Launch “leadership challenges” to encourage innovative thinking and teamwork.
• Designate “meeting captain” roles to empower team members in guiding discussions.
• Encourage peer-led case study discussions to deepen understanding of real-world leadership issues.

By making low-budget investments in coordination and facilitation of these initiatives, organizations can significantly bolster knowledge sharing and promote cross-functional collaboration. Leadership training seamlessly integrated into daily interactions is a means to fast-track development.

20%: Crowdsourcing Leadership Development Tools

While of a lower percentage in the 70-20-10 model, the 20% for relationships is viewed by some as the most fun, as it’s about making connections. This is accomplished in part by a resource your company already has: Its talented people!

Crowdsourcing

Use crowdsourcing of your impressive talent pool to encourage participation in leadership development:

• Invite team members to share their experiences with free resources.
• Promote peer coaching opportunities to facilitate learning and growth.
• Encourage self-learning through online courses or workshops.
• Implement stretch assignments to challenge individuals and expand their skills.
• Foster internal mentoring programs to build relationships and share knowledge.

Fostering an environment of shared knowledge not only enriches the development toolkit but also empowers employees to take charge of their learning journeys.

Self-Guided Leadership With Peers

Great leaders have strong self-motivation. You can tease out that critical leadership skill when you empower employees to take charge of their own learning. It can also demonstrate your company’s emphasis on continuous learning and the all-powerful growth mindset.

Here are some methods to achieve it:

• Curate reading leadership-themed book recommendations with prompts.
• Work with your information technology (IT) team to coordinate access to free online platforms like Google Classes, Coursera or edX.
• Provide leadership development podcast recommendations that align to your company industry and values.
• Encourage attendance and participation in chapters of professional organizations relevant to your company (e.g., business analysis and project management).

By implementing these strategies, organizations can create a culture of continuous growth and development, allowing employees to thrive as leaders.

10%: Formal Training From Budget-Friendly Sources

We round out our 70-20-10 model approach to low-cost leadership development with 10% focused on formal training. That “formal” does not mean being limited to instructor-led live instruction (which is ideal when possible). Rather, have an open mind approach to how you foster continuous learning with training resources of different types.

Utilizing Free Online Resources

Leveraging digital platforms and free content can significantly enhance training opportunities. Consider these activities to build your portfolio of low- or no-cost online training for leadership development:

• Curate valuable content: TED talks, business, industry or leadership-related podcasts, and articles relevant to your industry.
• Host virtual workshops: Organize sessions where employees can present insights from online courses.
• Establish social learning groups: Create forums or discussion groups on platforms like LinkedIn to facilitate learning.
• Engage with online assessments: Use tools like 360-degree feedback platforms to identify personal development areas and encourage reflection.

Rather than sending your leaders out to find whatever they and artificial intelligence (AI) may discover, take the time to vet and curate recommendations to better ensure your leaders in development are focused on the skills most relevant to the organization’s culture and business needs.

Encouraging Mentorship and Internal Growth

Mentorship programs that encourage knowledge exchange are pivotal in driving personal and organizational development. In mentoring settings, employees learning to be leaders or become better leaders gain firsthand experience in self-reflection, active listening and authentic participation in difficult conversations.

Consider the following:

• Set up a mentoring circle: Facilitate small groups where employees can support each other’s growth.
• Implement job shadowing: Allow employees to observe colleagues in leadership roles to learn best practices.
• Create stretch assignments: Encourage employees to take on challenging projects that push their boundaries.
• Foster leadership book clubs: Organize regular discussions around influential leadership literature.
• Involve employees in community projects: Provide opportunities for staff to engage in volunteer leadership roles.

In conclusion, by utilizing available resources and fostering a supportive environment for mentorship and growth, organizations can cultivate a vibrant culture of continuous learning that empowers employees and drives success.

Conclusion

Learning professionals know the reliability of the 70-20-10 model. And creating a very specific and targeted approach from the 70-20-10 model can advance budget-friendly and impactful leadership development opportunities.

Be creative in your proactive, resourceful approach to leadership development to empower individuals and strengthen your teams — all without incurring excessive costs. The commitment to cultivating leadership from within will ultimately foster a more engaged, high-performing workforce ready to meet the demands of the future.