How to Develop a Leadership Competency Framework: Step-by-Step Guide

Leaders are crucial to an organization’s success. They drive performance, inspire teams, and shape an organization’s future. The best way to ensure their effectiveness is with a robust and well-designed leadership competency framework. However, developing a leadership competency framework is not an easy task. A good framework requires careful planning, thorough assessment, and strategic implementation.

This guide will lead you through designing, building, and implementing an effective leadership competency framework. Our step-by-step approach will help you create a framework that’s clear, actionable, and aligned with your organization’s goals.

Step 1: Assess organizational needs

The first step in developing a leadership competency framework is to evaluate your organization’s leadership needs and goals. Ask yourself the following questions:

• Do you need to hire or promote someone to a leadership role? If so, why?
• How is poor leadership impacting your company’s performance?
• How effectively are your managers leading remote teams?
• How well do your leaders relate competencies to performance appraisals?
• What leadership skills are missing or need improvement to help your organization reach its goals?
• Are your leaders promoting a healthy work environment that supports today’s diverse workforce?

Assess the skills and abilities of your people to identify performance gaps. Look at your company’s past leaders to highlight where the gaps may be.

Gather insights using:

• One-on-one interviews
• Surveys and questionnaires
• Focus groups
• External agencies to analyze your organization’s performance and suggest where training or leadership changes may help

Step 2: Assess existing resources

Next, consider whether your company has an existing competency model, which will help lay the foundations for your leadership competency framework. If so, analyze it to uncover insights about the leadership competencies that your organization lacks.

Additional questions to consider are:

1. Do you have any other competency resources?
2. Are they adequate, or are there gaps?

You may have a core competency framework covering various roles across your organization. As changes occur or your company expands, you can shift your focus toward leadership development. Add leadership competencies to your new company-wide framework(s).

But what if you don’t have existing competency resources? In this case, you can take one of two approaches:

1. For a comprehensive competency framework, start by developing the core competency components that will apply to your whole organization and then move to the leadership competency components
2. For a framework geared toward developing your leaders without the need for a comprehensive framework, skip the core competencies and focus on the leadership competency framework

Whichever approach you take, collate information on your organization’s business goals, KPIs, and company values—this will help shape how you define your leadership competencies.

Step 3: Engage stakeholders

From the outset, engage key stakeholders, including senior management, Directors, and employees, to ensure buy-in for your framework.

Engaging stakeholders helps guide the design of your framework and cultivates trust in its approach, goals, and role played by your human resources division. It also promotes transparency and helps build consensus around the framework’s formulation.

To get the best engagement from your stakeholders, remember to:

• Involve them early in the development process
• Communicate the benefits of the proposed framework
• Demonstrate how the framework aligns with your organization’s strategic objectives

Step 4: Identify core leadership competencies

Core leadership competencies combine the knowledge, skills, and abilities leaders need to help organizations toward their goals. Some commonly referenced leadership competencies include:

• Strategic thinking
• Communication
• Emotional intelligence
• Decision-making
• Team management

Tip: Leverage Lominger competencies to guide you through critical leadership attributes.

The core competencies your leaders need may vary considerably depending on your organization. Here are some examples:

• Technical expertise, problem-solving, collaboration, and fostering a culture of continuous improvement are essential competencies in technology companies where leaders need to drive agile change through innovation and strategic foresight
• In software companies, leaders rely on similar competencies to tech companies but with a deeper understanding of software development, project management, and user-centric design
• In manufacturing, competencies in supply chain management, lean production methods, strategic planning, and interpersonal skills help leaders excel in process optimization, quality control, operational efficiency, and motivating a diverse workforce
• Consultancies need leaders with competencies in strategic problem-solving, analysis, communication, and stakeholder management to drive strong client engagement through innovative solutions
• Not-for-profits are focused on mission-driven objectives and need resourceful leaders who engage with communities and have competencies in fundraising, advocacy, strategic partnerships, and mobilizing stakeholders toward social outcomes

To identify your organization’s core leadership competencies, follow these steps:

Collate your organizational values and goals

Review your organization’s mission, vision, and strategic objectives to identify the required skills and behaviors.

Consult your key stakeholders

Gather insights from your leaders, managers, and employees to understand which competencies are crucial for success in your industry. Ask questions like:

• What are the most essential skills and behaviors that help you excel in your role?
• Are there any competencies unique to your role or function?
• Can you give examples of particular skills or behaviors that showcase exceptional outcomes?
• Are there any competency gaps that need attention in your role that are critical for effective leadership?

Review industry standards and best practices

Benchmark against competitors’ competency frameworks, metrics, and best practices to identify common or emerging skills that provide a competitive advantage.

Conduct a job analysis

Review job descriptions and performance criteria across the roles in your organization to identify the specific competencies that make effective leaders.

Validate and prioritize

Use surveys, focus groups, and performance data to validate competencies, understand how to customize them to your firm’s circumstances, and prioritize them based on impact.

Step 5: Design the framework

Once you’ve identified the core competencies most relevant for your organization, start building your competency framework using the following steps:

1. Define competency levels

Construct a tiered leveling structure (e.g., basic, intermediate, advanced) to categorize competencies and provide a clear progression path. Leveling helps your leaders understand expectations for roles in your organization at each career stage.

2. Craft detailed competency descriptions

Develop clear, specific descriptions for each competency. Outline the required knowledge, skills, and behaviors and ensure the descriptions align with your organization’s goals. Bring the descriptions to life by including examples of how each competency contributes to job performance.

3. Define measurable performance indicators for each level

Create specific, observable, and quantifiable indicators for each competency level. These indicators outline the actions or outcomes demonstrating proficiency, facilitating consistent evaluations and performance tracking across your organization.

An example leadership competency

Let’s illustrate the design process by considering the competency ’decisiveness.‘

Competency definition: Decisiveness is the ability to make timely and sound decisions based on analyzing the available information in ambiguous or conflicting situations or when there is an associated risk.
Decisiveness contributes to job performance by helping to reduce delays, maintain momentum, and support effective decision-making. It also fosters confidence, ensures clear direction, and minimizes uncertainty.

Competency levels:

1. Basic, e.g., individual contributor
2. Intermediate, e.g., team leader
3. Competent, e.g., manager of team leaders
4. Advanced, e.g., senior leader
5. Expert, e.g., executive leader

Performance metrics (customize these for your industry):

• Number of successful decisions made
• Percentage of decisions made within a specific timeframe
• Percentage of conflicts resolved through effective decision-making
• Number of high-priority tasks completed
• Number of stakeholders involved in the decision-making process
• Number of decisions that are consistent with legislation, precedent, and established policies and procedures

Differentiating between leaders who contribute individually vs. people managers

A common misconception is that leadership competencies apply only to leaders who manage people. But this isn’t true. As Hera McLeod, a senior leader in the technology sector, emphasizes: “You don’t have to manage people to be a leader.”

Leadership competencies apply to all those senior enough to exercise meaningful influence at an organization, whether they manage people or not.

Senior roles require leadership competencies such as strategic thinking, decision-making, and influence. These individual contributors drive projects, shape organizational culture, and guide teams toward achieving strategic goals, regardless of whether they have direct reports.

But how do you differentiate between individual contributors (i.e., leaders who don’t manage people) and people managers in your competency framework? The key is to design the framework to emphasize the competencies most relevant for each type of role, i.e., individual contribution leaders vs. people manager leaders.

Consider this example of leadership competencies for marketing roles:

Notice how the competencies differ to emphasize the most important aspects for each type of leader, particularly the additional leadership competencies for the CMO.

Tip: Use competency mapping to identify and allocate competencies for individual contributors and people managers.

Step 6: Implement and communicate the framework

Once you’ve designed your leadership competency framework, implement and communicate it to bring it to life and maximize its potential. Do the following:

1. Engage stakeholders early

Involve your key stakeholders—senior leaders, managers, and employees—in your framework’s development process. You will cultivate buy-in and promote familiarity with the framework before it rolls out.

Use several forums for engagement, including workshops, focus groups, and feedback from employees and team members during performance discussions.

Learnings from these will help inform and align the framework with your organization’s goals. Engagement fosters ownership from your people and strengthens their commitment to your framework’s success.

2. Develop a comprehensive communication plan

Formulate a communication plan explaining the framework’s rationale, purpose, benefits, and practical applications. Use various channels, including:

• Emails
• Your organization’s intranet
• Town hall meetings
• Webinars to reach all your people, in-person and remotely

Describe how the framework will impact your people’s roles, development plans, and performance management. Articulate how it benefits overall company performance and organizational goals.

Highlight success stories and provide real-life examples of how the framework promotes company values and elevates proficiency levels at your organization, encouraging a sense of shared goals.

3. Provide training and resources

Train all your people in leadership positions and your HR professionals on how to use the framework effectively. Empower them to leverage the framework by learning its strengths and capabilities.

Run training programs and workshops, create online resources, and produce checklists to help your leaders understand how to:

• Assess competencies
• Identify skills gaps
• Develop targeted development plans

Give your people the tools and resources to self-assess and enhance their leadership competencies in alignment with the framework.

4. Integrate with your organization’s HR processes

Embed the leadership competency framework into key HR processes such as recruitment, performance appraisals, talent management, and succession planning. Ensure job descriptions, performance reviews, and development plans reflect the identified competencies to reinforce the framework’s relevance and promote its consistent application across your organization.

An effective leadership competency model provides:

• A clear roadmap of expectations for leadership roles
• An objective structure
• Clear developmental milestones

Integrating it with other HR processes will facilitate a seamless experience for your people as they pursue their leadership performance and career goals.

Step 7: Monitor and evaluate effectiveness

Establish mechanisms for continuous feedback and evaluation of your framework.

Conduct a post-implementation survey, for instance, to gauge your people’s view on the framework’s design, whether it’s effective at cultivating good leaders, and whether stakeholders consider the identified competencies relevant.

Collect input on an ongoing basis to identify areas for improvement and adjust the framework as required.

Examples of leadership competency models

We have included some real-world examples of competency models by organizations that have successfully implemented leadership competency frameworks:

GitLab

GitLab’s leadership competenciess form the foundation of effective management, complementing the company’s values, remote work, and functional competencies.

The core leadership competencies are:

• Emotional intelligence enables leaders to manage their emotions and understand others, fostering a supportive environment
• Modeling a culture of feedback emphasizes continuous, real-time feedback, promoting transparency and improvement
• Coaching is essential for guiding team members’ growth and accountability
• Conflict resolution skills are vital for maintaining team harmony by addressing disagreements effectively
• Building high-performing teams involves holding team members accountable and managing performance actively

These competencies align with GitLab’s values, such as collaboration and diversity, and remote work practices like effective communication, ensuring leaders can create a high-achieving, inclusive work environment.

National Education Association

The National Education Association (NEA) competency model lists seven competencies, from advocacy to social and emotional intelligence, across three levels, i.e., foundational, mobilizing, and agenda-driving.

The NEA model was developed through engagement and consultation with leaders across the Association. It aims to highlight the social and emotional intelligence skills needed by its leaders and facilitate the integration of these skills with the association's culture and workplaces.

Wilson Learning

Wilson adopts an approach to leadership competencies based on its 50 years of experience helping clients develop their leadership. The Wilson competency model balances Essence, i.e., the character of leadership comprised of values, characteristics, and clarity of purpose, and Form, i.e., the execution of leadership supported by relevant skills and knowledge.

The Wilson model identifies 18 Essence competencies, grouped into personal, social, and organizational character, and four Form competencies organized into core roles, as follows:

• Visionary: Setting direction by translating strategy into work requirements
• Tactician: Achieving results through effective planning, delegating, and reviewing
• Facilitator: Creating an environment of collaboration and partnership
• Contributor: Ensuring the application of leaders’ talents, experiences, and abilities toward organizational success

TATA Power

TATA Power evaluates the future growth of its people based on competencies identified in its leadership competencies model known as Aspire-Motivate-Perform (AMP).

The AMP model identifies six competencies that all leaders must have:

• Being agile
• Energizing customers
• Delivering results
• Fueling excellence
• Being purposeful
• Being good learners In addition, senior leaders should have business acumen and competencies to drive success and power people.

California Department of Human Resources

The California Department of Human Resources (CalHR) leadership competency model identifies the following competencies:

• Business acumen: Demonstrating sound judgment, fiscal competence, and organizational business knowledge to optimize the quality of operations and services
• Inspirational leadership: Creating a sense of direction, purpose, excitement, and momentum for the organization’s mission while creating a positive work environment offering clarity of goals and objectives and promoting collaboration
• Results-orientation: Focusing efforts to efficiently achieve measurable and customer-driven results consistent with the organization’s mission and objectives
• Stewardship: Managing resources and exercising influence to serve the long-term collective good of the public
• Talent management: Recruiting and developing world-class employees
• Vision and strategic thinking: Promoting alignment with the organization’s vision and values and creating a compelling future state based on understanding internal and external trends and influences

KIPP

KIPP, a US network of public charter schools, has developed a leadership competency model organized into four core categories and additional role-specific competencies.

The core categories are:

• Drive results: Achievement orientation, continuous learning, critical thinking, decision-making, and planning and execution
• Build relationships: Stakeholder management, communication, impact and influence, self-awareness, and cultural competence
• Manage people: Direction-setting, team leadership, performance management, and talent development
• Student focus: Setting high expectations, understanding the needs and motivations of students, establishing a culture of respect, and building solid relationships The role-specific competencies vary, but all encompass instructional leadership and operational management components.

Create leadership frameworks with unprecedented ease with Deel Engage

A robust leadership competency model is essential for developing your leaders into effective and capable managers and promoting your organization’s long-term success. However, designing a model that identifies, assesses, and cultivates these competencies is complex and time-consuming. For many organizations, it can take 16 months or more.

Organize your competencies efficiently and comprehensively and set a clear path forward for your leaders and people with Deel Engage. Our all-in-one talent development suite offers:

• Competency-based career progression frameworks: Provide your leaders—individual contributors and people managers alike—clear descriptions of their current competency expectations and what they need to get to the next level
• Competency-based performance assessments: Measure performance at a competency level using well-defined performance indicators and a competency-based performance management system to identify skill gaps and growth opportunities
• Competency-based training: Offer hundreds of world-class learning resources organized by competencies so your leaders understand what training materials are relevant for their roles, aligned with their development plans
• Seamless connectivity: Integrate easily with communication technologies using Slack HR plugins, including PTO, Kudos, Referrals, Org Charts, and more
• AI assistant: Fast-track leadership competency framework creation using cutting-edge AI tools

Talk to our experts about creating a custom leadership competency model for your organization.