Leadership Team Development: What Smart Business Owners Do to Build a Self-Sustaining Company

Here’s the truth: every business owner hits a wall where they can’t do everything themselves anymore. Leadership team development isn’t just a fancy business term—it’s your ticket to freedom. It’s the difference between being stuck in your office 12 hours a day and actually having a life while your business grows.

Think about it this way. Right now, you’re probably the go-to person for every big decision. Your phone rings constantly. Your team comes to you for answers about everything from customer complaints to supply chain issues. Sound familiar? That’s exactly where most business owners get stuck.

The smart ones figure out how to build a team that can handle these decisions without them. They create what we call a self-sustaining company—one that runs smoothly whether the owner is there or not. And the secret? It’s all about developing the right people into leaders.

Why Most Business Owners Stay Stuck

Let’s be honest about what’s really happening here. You started your business because you were good at something. Maybe you’re a great salesperson, a skilled contractor, or a brilliant strategist. But being good at your craft doesn’t automatically make you good at developing other people into leaders.

Most business owners make the same mistake. They hire people who can do the job, but they don’t think about whether these people can eventually make decisions and lead others. They focus on finding someone who can answer phones, manage inventory, or handle customer service. But they miss the bigger picture.

Here’s what happens next. The business grows, but everything still flows through you. Your team is great at following instructions, but they panic when something unexpected comes up. They call you during dinner, text you on weekends, and basically treat you like a human Google for business decisions.

This creates a vicious cycle. You’re too busy putting out fires to train your people properly. And because your people aren’t trained to handle problems, more fires keep starting. Meanwhile, your business growth hits a ceiling because you can only handle so much.

The Foundation: Building a Culture Where Leaders Can Grow

Before you can build high performing teams, you need to create the right environment. Think of it like growing a garden. You can’t just throw seeds on concrete and expect them to grow. You need good soil, water, and sunlight.

In business terms, this means creating a workplace where people feel safe to try new things, make mistakes, and learn from them. Most employees are terrified of screwing up because they think it means they’ll get fired. But future leaders need to practice making decisions, and that means some of those decisions won’t be perfect.

The best business owners create what we call a “learning culture.” When someone makes a mistake, instead of getting angry, they ask questions: “What happened? What did you learn? How would you handle it differently next time?” This approach turns mistakes into teaching moments instead of reasons to panic.

You also need to show your team that leadership is something they can grow into. Many employees think leadership positions are only for people who get hired from outside the company. When you promote from within and invest in developing your people, it sends a clear message: “If you want to grow, we’ll help you get there.”

Creating Clear Expectations

One of the biggest problems in most companies is that nobody really knows what’s expected of them beyond their basic job description. If you want to develop leaders, you need to be crystal clear about what leadership looks like in your organization.

This doesn’t mean creating a 50-page handbook that nobody reads. It means having real conversations with your team about what you’re looking for. Talk about the kinds of decisions you want them to start making. Explain how you want them to handle different situations. Show them what good leadership looks like by your own example.

The key is to start small. Don’t expect someone to go from following orders to running a department overnight. Give them small decisions to make first, then gradually increase their responsibility as they prove they can handle it.

Finding the Right People to Develop

Here’s something most business owners get wrong: they think everyone wants to be a leader. That’s not true. Not everyone on your team will become a leader, and that’s perfectly okay. Some of your best employees are happy being amazing at what they do without wanting to manage others or make big decisions. Your job is to figure out who actually has both the potential and the genuine desire to grow into leadership roles.

Think of it like this. You might have a fantastic salesperson who brings in great revenue month after month. They love interacting with customers and closing deals. But put them in charge of training new sales staff or managing a team, and they might be miserable. That doesn’t make them a bad employee—it makes them a specialist who’s valuable exactly where they are.

On the flip side, you might have someone in a support role who’s constantly looking for ways to improve processes, help coworkers, and take on new challenges. These are the people you want to focus your leadership development efforts on.

Key Traits to Watch For

When you’re looking for potential leaders, here are the specific behaviors and attitudes to pay attention to:

• Crisis response: Who steps up when things go wrong? When your computer system crashes, when a big customer has a problem, or when you’re short-staffed, who naturally takes charge?
• Pressure handling: Who stays calm and thinks clearly when everyone else is panicking? These people often have the temperament needed for leadership decisions.
• Question quality: Who asks thoughtful questions that get to the heart of problems? Good leaders are curious and want to understand the “why” behind situations.
• Natural influence: Who do other team members turn to for help, advice, or guidance? Sometimes informal leaders emerge naturally within your team.
• Initiative taking: Who sees problems and starts working on solutions without being asked? Who notices opportunities for improvement and speaks up about them?
• Learning mindset: Who actively seeks feedback and uses it to improve? Who admits when they don’t know something and asks for help?

Testing Leadership Potential

Once you’ve identified some possible candidates, you need to test their leadership potential in low-risk situations. Here’s how to do it effectively:

Start small and watch their reactions. Ask someone to train a new employee for a day. Give them responsibility for organizing a team lunch or planning a small company event. Put them in charge of a specific project with a clear deadline and budget.

Pay close attention to how they handle these situations. Are they eager to start or hesitant? Do they ask smart questions about what’s expected and what they’ll need? Do they finish tasks on their own or require frequent check-ins?

The best candidates will usually:

• Ask clarifying questions upfront
• Create a plan before jumping into action
• Keep you updated on progress without being asked
• Handle unexpected problems calmly
• Give credit to others who helped them
• Come to you with solutions, not just problems

Common Questions About Identifying Leaders

Q: What if my best performer doesn’t want leadership responsibility? A: That’s completely normal and actually a good thing. Forcing someone into leadership who doesn’t want it usually creates problems for everyone. Instead, find ways to reward and retain your top performers in their current roles. Consider creating “senior” or “specialist” positions that recognize their expertise without requiring them to manage people.

Q: Should I only consider people who’ve been with the company for a long time? A: Not necessarily. While experience with your company is valuable, leadership potential can show up quickly. Sometimes newer employees bring fresh perspectives and energy that benefit the team. Focus on demonstrated behaviors rather than just tenure.

Q: What if someone wants to be a leader but doesn’t seem ready? A: Have an honest conversation about what specific skills they need to develop. Create a development plan with clear milestones and timelines. Some people just need training and experience to become effective leaders.

Q: How do I handle multiple people wanting the same leadership position? A: This is actually a good problem to have. Consider creating different leadership opportunities for different people. Maybe one person leads customer service improvements while another focuses on training and development. You can also be transparent about your selection criteria and timeline.

The Power of Observation

Here’s something that might surprise you: the best future leaders aren’t always the loudest people in the room. They’re not necessarily the ones who volunteer for everything or who are always trying to get attention. Sometimes the most effective leaders are the quiet, steady people who consistently do good work and help their teammates succeed.

This is why observation is so important. You need to look beyond the obvious candidates and really watch how people behave in different situations. Some of your best leadership potential might be hiding in plain sight.

Daily Behaviors That Reveal Leadership Potential

Make it a habit to really observe your team during their normal work activities. Here’s what to look for:

Customer interactions: How do they handle difficult customers? How do they handle stress? Do they fix problems themselves or hand them off to others? What do customers think of them?

Conflict resolution: When coworkers disagree or have problems, how do they respond? Do they avoid conflict completely, make things worse, or help find solutions? Good leaders can navigate interpersonal challenges effectively.

Initiative in small things: Do they clean up messes they didn’t make? Do they help new employees feel welcome? Do they suggest improvements to processes? These small actions often predict how someone will handle bigger responsibilities.

Response to feedback: When you give them suggestions or corrections, how do they react? Do they get defensive, ignore the feedback, or actually make changes? Future leaders are coachable.

Teamwork style: Are they collaborative or do they prefer working alone? Do they share credit for successes? Do they help struggling teammates or focus only on their own work?

The Hidden Leaders in Your Organization

Some of your best leadership candidates might not be obvious at first glance. Here are the types of people to pay special attention to:

The problem solvers: These are the people others go to when they’re stuck on something. They might not have fancy titles, but they’re already functioning as informal leaders within your team.

The bridge builders: Some people are naturally good at connecting different groups or departments. They help information flow and relationships stay strong. These skills translate well to formal leadership roles.

The steady performers: While flashy high performers get attention, don’t overlook the people who consistently deliver good work without drama. Their reliability and calm approach can be exactly what your leadership team needs.

The culture carriers: Who really embodies your company values? Who helps new people understand “how we do things here”? These people often make excellent leaders because they understand and protect your company culture.

Having Career Development Conversations

One of the biggest mistakes business owners make is assuming they know what their employees want. You might think someone would love a promotion, but they might actually prefer staying in their current role. Or you might overlook someone who’s been hoping for leadership opportunities but hasn’t spoken up.

Regular career development conversations solve this problem. These don’t have to be formal annual reviews. They can be casual check-ins where you ask about goals, interests, and aspirations.

How to Start These Conversations

Here are some simple ways to open up discussions about career development:

• “Where do you see yourself in our company in the next year or two?”
• “What parts of your job do you enjoy most? What would you like to do more of?”
• “Are there any areas of the business you’re curious about or would like to learn more about?”
• “If you could change one thing about your role, what would it be?”
• “What skills would you like to develop or improve?”

What These Conversations Reveal

These discussions often uncover surprising information:

Hidden ambitions: Someone might reveal they’ve always been interested in management but didn’t think you saw them as leadership material.

Unexpected interests: Your accounting person might be fascinated by marketing, or your customer service rep might want to learn about operations.

Skill development desires: People might want to improve specific abilities like public speaking, project management, or technical skills.

Career concerns: Someone might be feeling stuck or underutilized and considering leaving unless they see growth opportunities.

Creating a Leadership Pipeline

Once you understand who wants to grow and who has potential, you can start building what we call a “leadership pipeline.” This is basically a plan for developing multiple people at different stages, so you always have leaders ready when you need them.

Think of it like a sports team. You don’t just have starters—you have bench players who are developing their skills and getting ready to step up when needed. Your business should work the same way.

Levels of Leadership Development

Consider creating different levels of leadership development:

Emerging leaders: People who show potential but need basic leadership skills and experience. They might lead small projects or mentor new employees.

Developing leaders: People who’ve proven they can handle responsibility and are ready for bigger challenges. They might manage a small team or oversee important processes.

Advanced leaders: People who are ready for significant management roles or could potentially take over major parts of your business.

This approach ensures you’re always developing leadership talent at multiple levels, which protects your business and creates clear advancement paths for your team.

Red Flags to Watch Out For

Not everyone who wants to be a leader is actually suited for it. Here are some warning signs to watch for:

• Credit takers: People who claim responsibility for successes but blame others for failures
• Drama creators: People who seem to be involved in most workplace conflicts or gossip
• Micromanagers: People who can’t delegate or trust others to do good work
• Poor listeners: People who talk more than they listen or dismiss others’ ideas quickly
• Ego-driven: People who seem more interested in the status of leadership than the responsibility

These traits don’t necessarily make someone a bad employee, but they often indicate someone who would struggle in leadership roles.

The key to successful leadership team development is being thoughtful and intentional about who you invest in. Take the time to really understand your people, observe their behavior patterns, and have honest conversations about their goals. This foundation work makes everything else in the leadership development process much more effective.

Practical Ways to Develop Your Future Leaders

Give Them Real Responsibilities

The best leadership training happens on the job. You can send someone to a seminar about delegation, but they won’t really understand it until they have to delegate tasks themselves. Look for opportunities to give your developing leaders real responsibilities that matter to the business.

Start with projects that have clear boundaries and deadlines. Maybe ask someone to lead the planning for your company picnic or to research new software for the office. These projects give them practice making decisions, managing timelines, and coordinating with other people.

As they prove themselves with smaller projects, gradually increase the stakes. Let them handle a key customer relationship or manage a small team during a busy period. The goal is to build their confidence and skills through actual experience.

Create Learning Opportunities

Your future leaders need to understand how the whole business works, not just their little piece of it. Cross-training is one of the best ways to develop this broader perspective. Let your customer service person spend time with the sales team. Have your operations manager work with accounting for a week.

This kind of exposure helps people understand how their decisions affect other parts of the business. It also breaks down the walls between departments and creates better communication across your organization.

Consider setting up regular “lunch and learns” where different team members share what they do and what challenges they face. These informal sessions help everyone understand the bigger picture and often lead to better solutions for company-wide problems.

Provide Mentoring and Coaching

Every developing leader needs someone to guide them through the process. This doesn’t have to be formal or complicated. Sometimes it’s as simple as having regular check-ins where you ask how things are going and offer advice when they’re stuck.

You can also pair developing leaders with more experienced team members. This mentor relationship gives them someone to go to for questions and guidance. It also helps your experienced employees feel valued and engaged in the growth of the company.

External coaching can also be valuable, especially for leaders who are taking on bigger responsibilities. A good coach can help them work through challenges, develop new skills, and gain confidence in their abilities.

Building Systems That Support Leadership Growth

Teaching Decision-Making

One of the hardest parts of leadership team development is teaching people how to make good decisions on their own. Most employees are used to checking with the boss before doing anything significant. But if you want to scale your business, you need people who can make decisions without you.

Start by creating simple guidelines about what kinds of decisions people can make at different levels. For example, maybe customer service can offer discounts up to $50 without approval, but anything bigger needs manager approval. These guidelines give people confidence to act while protecting the business from major mistakes.

As people prove they can handle smaller decisions well, expand their authority. The goal is to gradually push decision-making down to the lowest appropriate level in your organization. This speeds up your operations and frees you up to focus on bigger issues.

Improving Communication

Good leaders need to be good communicators. They need to listen to their team members, share information clearly, and handle conflicts when they arise. These are skills that can be developed with practice and feedback.

Regular team meetings are a great place for developing leaders to practice communication skills. Let them run parts of the meeting or present updates on their projects. Give them feedback on how they did and suggestions for improvement.

Also encourage informal communication. Sometimes the best ideas come from casual conversations in the break room or quick chats after meetings. Create opportunities for people to interact and share ideas outside of formal meetings.

Measuring Your Progress

Track the Right Things

You need to know if your leadership development efforts are working. But don’t just focus on obvious metrics like revenue or profit. Those are important, but they don’t tell the whole story about leadership effectiveness.

Pay attention to things like employee satisfaction, turnover rates, and how quickly problems get solved. How long do employees stay with your company? Do they feel engaged at work? Can they solve problems quickly when they have the authority to act?

Also track how often you’re getting interrupted for decisions. If your leadership development is working, you should gradually get fewer calls and emails asking for your input on routine matters. Your team should be handling more situations independently.

Regular Check-ins and Adjustments

Leadership team development isn’t something you set up once and forget about. People develop at different rates and in different ways. What works for one person might not work for another.

Schedule regular one-on-one meetings with your developing leaders. Ask them how they’re feeling about their progress. What challenges are they facing? What additional support do they need? These conversations help you adjust your approach and keep people on track.

Don’t be afraid to change course if something isn’t working. Maybe someone isn’t ready for as much responsibility as you thought. Or maybe someone is progressing faster than expected and needs bigger challenges. Flexibility is key to successful leadership development.

Advanced Strategies for Building Strong Leaders

Cross-Department Experience

The strongest leaders understand how different parts of the business work together. They know that a decision in one area can affect other areas in unexpected ways. The best way to develop this understanding is through cross-department experience.

Rotate your high-potential people through different areas of the business. Let your sales manager spend time in operations. Have your customer service lead work with marketing. These experiences give people a broader perspective and help them make better decisions.

This approach also helps break down the “us versus them” mentality that can develop between departments. When people understand each other’s challenges, they’re more likely to work together effectively.

Planning for the Future

Smart business owners don’t just think about current leadership needs—they plan for the future. This means identifying people who could eventually take over key roles and making sure they’re getting the development they need.

Succession planning doesn’t have to be scary or complicated. It’s really about making sure your business isn’t dependent on any one person, including you. Cross-train people in critical processes. Document important procedures. Make sure multiple people understand how to handle key customer relationships.

This planning protects your business and gives your developing leaders clear goals to work toward. When people know there’s a path for advancement, they’re more likely to invest in their own development.

Creating Your Action Plan

Start with Assessment

Before you dive into leadership development, take an honest look at where you are now. What leadership gaps do you have? Who on your team shows leadership potential? What skills do they need to develop?

This assessment doesn’t have to be formal or complicated. Sometimes it’s as simple as making a list of key responsibilities and asking yourself who could handle each one if you weren’t available. The gaps you identify become your development priorities.

Take Action Consistently

The biggest mistake business owners make with leadership development is inconsistency. They get excited about developing their team, start strong, then get busy with other things and let it slide. Real leadership development requires consistent effort over time.

Block time in your calendar for leadership development activities. Treat these appointments as seriously as you would a meeting with your biggest customer. Your future leaders need to see that you’re committed to their growth.

Consider working with a business coach who specializes in leadership development. They can help you stay on track, avoid common mistakes, and accelerate the process. Having outside expertise and accountability can make a huge difference in your results.

The Payoff: Freedom and Growth

When you successfully develop a strong leadership team, everything changes. Your business becomes more stable, more profitable, and more enjoyable to run. You get your evenings and weekends back. You can take vacations without worrying about what’s happening at the office.

But the benefits go beyond just your personal freedom. A strong leadership team makes your business more valuable. If you ever decide to sell, buyers pay premium prices for companies that can run without the owner. Your investment in leadership development literally adds value to your biggest asset.

Your team benefits too. People who feel challenged and supported in their growth are more engaged, more productive, and more likely to stay with your company long-term. This creates a positive cycle where your best people help you develop even more leaders.

The time and effort you invest in leadership team development today will pay dividends for years to come. You’ll have a team that can handle whatever challenges come your way, and you’ll have the freedom to focus on the big picture instead of getting bogged down in day-to-day operations.

Ready to start building the leadership team that will transform your business? AMB Performance Group has helped hundreds of business owners create systems and develop teams that drive real results. Contact us today to learn how we can help you build high performing teams that give you the freedom and growth you’ve been working toward.