Research has shown that 80% of every organization investments is spend to improve the human capabilities and promote their interests and 20% of the investments are spend for technological upgrading and production improvements. Entering today the new advanced management practices of knowledge management, investment through people is divided to three general categories.

1. LEARNING ON THE JOB: To develop leadership on the job requires that employees take jobs or project assignments that include leadership responsibilities. Early in a person’s career, working as an individual contributor on team projects provides many opportunities for learning effective leadership. Being a project leader allows an employee to use different types of power and observe how people react to employees attempts to influence them. Team leaders can also ask team members for candid feedback and suggestions for improvement. The rest of the team members can also learn, by observing the relationship between the leader and the team and by practicing the use of referent and expert power.

2. FORMAL ASSESSMENT AND TRAINING: Many organizations ensure that their most talented employees receive formal leadership assessments and attend leadership training programs. These can be conducted in the organization’s own educational facilities, at a college or university, through a computer simulation program managed by human resource companies that play the trainers’ role. Regardless of location, formal assessment and training programs include evaluation of the individual’s current approach to leadership and provide educational experiences designed to improve the individual’s effectiveness as a leader.

3. COACHING AND MENTORING: Whether held at a college campus or at corporations’ premises, most formal leadership development programs take place in traditional classroom settings. Leaders who prefer a more personal approach can hire a personal leadership coach or work with a mentor. Personal coaches can provide an intensive leadership development experience. But they can be quite costly. Few people can afford this method of leadership development. For many managers, having a mentor is more feasible. Mentors are often supervisors or senior colleagues in an organization who provide advice and guidance about a variety of career-related concerns. They can help a manager understand how others respond to his or hers behaviors and point out weaknesses or blind spots. They also serve as role models that a manager can emulate and provide valuable advice concerning the styles of leadership favored in an organization. Finally, they assist a manager in developing leadership capabilities by helping the manager find assignments that will foster on-the-job learning.