What kind of magic does the Walt Disney Company use to keep its large and sprawling staff of smiley, friendly, and competent workers all on the same page ... and keep them all smiling?

Contrary to popular belief, it's not the pixie dust. What's actually responsible is a robust and internationally recognized leadership program that aims to carry on the virtues first established by Walt and Roy Disney 80 years ago.

"Our guests are more likely to return based on our interactions with cast members who are more prepared, more willing, if they have great leadership that supports them," says Bruce Jones, the programming coordinator for the Disney Institute, which started as in-house training for Disney company staff and has expanded to offer training and development for outside organizations.

In other words, Disney learned quickly that internal leadership development was crucial to success.

What kind of leadership program is right for your business? Experts say internal development is often something that gets axed as businesses look for ways to save money.  But they say overlooking the value of cultivating your own in-house talent can be a fatal mistake. Leadership programs help ease the chain of succession, make employees feel more connected to the business, and can transfer good ideas from one section of your company to the whole organization.

Creating a Leadership Development Program: Assess Your Goals

Before you start a leadership development program, you have to make sure your business has a clear vision and stated goals. It seems like a no-brainer, but experts say many companies discount this critical first step, which makes it harder to inspire new leadership.

"These questions cannot be taken for granted: what do you value and what do you believe in and what behaviors would you want to reward and recognize when people are observed doing it right?" Jones says.

A simple way to go about this is to ask yourself: What do we want our future leaders to accomplish? At Disney, for instance, there's heavy emphasis on the interactions between its crew and customers, so that anyone who encounter an employee from the front-desk clerk to the ride operator walks away with a pleasant experience.

Mark Murphy, chairman and CEO of Leadership IQ, a training firm based in Washington, D.C., that has worked with GE, Time Warner and Coca-Cola, says there aren't universal values that apply to everyone. The goals needed in a turnaround situation are different from the ones needed in a high-growth organization or a highly collegial, collaborative one, he says.

"One of things that hurts the leadership industry is the idea that there are 10 or 12 skills that magically work for everybody," he says. "That's not how the world works. It's a variety of skills, a variety of styles."

The goals and vision you create should also be believable, or you risk compromising  employee trust. After all, the most successful companies create objectives that they can – and do – clearly act on, says Harold Scharlatt, a senior enterprise associate for the Center for Creative Leadership, a research and leadership-training firm based in Greensboro, N.C.

"At others, you'll find it's a little bit more of a poster than it is a reality," he says. Another reason to embrace setting leadership goals, experts say: Treat it as a change initiative, and it can reprioritize your business strategy. People have to be willing to invest in new approaches to a job, and updating your company's core goals is a good place to start.

If your business is still reeling from the recession, putting employees through leadership workshops can help re-motivate them, boost camaraderie, and create new challenges that have the potential to stimulate creativity.
Dig Deeper: How to Set Business Goals

Creating a Leadership Development Program: Identify Leadership Candidates

Identifying the employees best suited for leadership can be tricky, and theories vary on how to best identify those candidates within your organization. Disney focuses its development programs largely on promoting from within, and more than 60 percent of its management comes from its existing staff, Jones says. The company also keeps an informal, hands-off approach to its succession program by setting goals and then standing back.

"Those that we believe are going to be the great leaders in this organization are going to be the ones who rise above in this environment," he says.

Other companies simply put their entire staff into development programs with hopes of making everyone more effective. But identifying the employees who bring the most energy, ambition and success into your company is a smart way to focus development dollars, says Tommy Daniel, senior vice president of PDI Ninth House, a global leadership development and consulting firm. While leadership training can potentially benefit every employee, some positions will only result in a small revenue bump for the whole organization, while other positions can garner a huge return, he says.

At the same time, you should be conscious that the best employees don't always make the best managers, Murphy says. "The skill sets are about 180 degrees away from each other," he says.

Murphy's company sometimes recommends a "manager-for-a-day" program, where a promising employee can shadow or work alongside a manager to get a real sense of what their job entails. "It doesn't take a six-month curriculum necessarily," Murphy says. "Sometimes it's a simple as identifying your best people and giving them the job and seeing how they perform."

If it doesn't work out, well, you saved yourself a promotion; if it does, you've got someone who is able to ease a bit more quickly into a new role.

Leadership instructors say an easy way to lose promising employees is to think that because you have no positions available, you have no need for staff development. "Your future leaders want to be developed whether you have a space for them or not," Murphy says. "If you don't develop them they're going to go somewhere else to get developed."

Sure, it's about feeling nurtured and appreciated for employees, but experts also say that when employees feel like they're not growing any more in their job, they get irritated and their quality of work suffers.
Dig Deeper: Should Job Promotions be Random?

Creating a Leadership Development Program: Use Real-World Examples

A leadership development program is only as good as its practical applications.

Disney doesn't just tell its employees about customer service values established in the 1960s; it gathers good customer service stories from around the company to share with its leadership classes, and takes employees backstage at its parks to see its complex support environment. When on the road doing classes for outside organizations, instructors create a virtual experience using film and photographs.

"We want those case studies to be as current as possible, as relevant as possible," Jones says. "We're always careful to make sure what we're talking about is not just baked in historical context." Disney treats itself as a living laboratory to see what approaches work, and shares those successes in its classes.

Businesses should also pick instructors for the program who have a track record of good leadership. Otherwise, employees won't embrace the message.

"Leadership is as much performance art as much as it is everything else," Murphy says. "They can talk a good game, but if they go out into the real world and an employee starts talking to them and they roll their eyes, well, they haven't learned much."

Even in a struggling business, some pockets of the organization are usually still doing well, leadership instructors say. Staff development allows organizations to extrapolate lessons from those pockets to the whole company.
Dig Deeper: What They Do (and Don't) Teach You in Business School

Creating a Leadership Development Program: Leading in a Global Economy

Remember when a manager was someone who worked in an office with 20 employees sitting outside the door? In today's world of a global workforce, virtual offices and digital conferencing, managers may have employees they don't see for months at a time.  How can you still develop leaders for a decentralized workforce?

Experts say this challenge means you have to train leaders to be more purposeful in establishing personal relationships with staff.

"Developing relationships with people is sort of the first step to developing enough trust with someone so they will willingly invest in your leadership," says Daniel of PDI Ninth House. That means being able to pick up the phone every now and then instead of just relying on what some experts call a "concurrent monologue" of e-mail.

"There's nothing harder than to develop a relationship with someone than when you're only communicating with shorthand and e-mail," Daniel says.

Part of the challenge of leading in a digital world is the need to be more clear and direct in your conversations with employees, Scharlatt says.

"Communications have to be clearer, more helpful, more on target," he says. Leadership programs in a decentralized workspace should also has focus on the value of sharing information and transparency through social media and virtual office sharing systems, Murphy says. 

Dig Deeper: Working With a Global Workforce

Creating a Leadership Development Program: Additional Resources
The Disney Institute offers public workshops and customizable private leadership development classes at its Walt Disney Resorts, in addition to classes in New York, Washington D.C. and other cities around the world.
Leadership IQ offers live programs, teleconferences and webinars in addition to researching and producing white papers about workforce productivity trends.
The Center for Creative Leadership offers a variety of leadership programs along with other materials to facilitate in-house staff development.
PDI Ninth House, based in Minneapolis, offers development assets, executive coaching and e-learning and other customizable packages
TrainingIndustry.com ranks the best leadership programs in the country.