Gary, from my perspective there are three implicit assumption in your short comment that I would challenge:

1. Your understanding of Leadership seems to be very leader-centric one. However, some contemporary theories on leadership draw a picture of leadership as being a lot more driven by situation, subordinates and goals (see also: https://youtu.be/XKUPDUDOBVo ). In other words, developing and educating only a part of the organisation always bares the risk of a disconnect.
2. Also the grouping of the three thirds might be questionable. Do you use 360 evaluations or only the good old military format of evaluation by your next superior? The thing is: Are your thirds really performance thirds, or is the top third just more able to please their superiors?
3. Excellence (-> as a prerequisite for being promoted up to the top level) is always inextricably linked to being an excellent leader. I would doubt this. Especially in our highly complex operational environment (comprehensive approach) there is a need for both, managers and leaders in a military organisation. You would need those who are able to create fellowship and enthusiasm amongst their subordinates (leaders) and those who are able to deal with the complexity of planning operations in the VUCA environment…So why just focus on leaders (The book fiasco by Thomas Ricks gives some good reasons to develop excellent managers)?

However, in order to contribute to your question….

1. If you want to develop excellent leaders, these leaders should be identified by 360 degree evaluation on a tactical level (Coy up to Bn).
2. Once you have identified them, you should focus on the top third, because you don´t need all of the group for your top leadership appointments and of course you want to aim at excellence.
3. The not-so-good evaluated leaders are probably excellent managers and can be of more benefit in those positions (could be the same career speed, but a different career-path).
4. Those who are neither evaluated as good leaders, nor as being good managers should probably leave the organisation.

What is you opinion on these thoughts?