Leadership Skills

The 8 key leadership skills you need to know in 2022

Last update: August 2022

Anyone can be placed in a leadership role, but to be good and thrive in that position requires solid leadership skills. Good leadership skills are top of the list of competencies that recruiters need to focus on when hiring people or when managers promote leaders from within the organization.

The highest ranking companies hunt for people with well-honed leadership skills to fill their most sought after executive positions.

The 8 key leadership skills you need to know:

  1. Relationship building
  2. Agility and adaptability
  3. Innovation and creativity
  4. Employee motivation
  5. Decision-making
  6. Conflict management
  7. Negotiation
  8. Critical Thinking

1. Relationship building (the foundation of a high-performing team)

Some leaders will say they that they do not need to be loved in the workplace to succeed. This may be true, but to build a cohesive and more engaged team, great managers need the leadership skills to forge strong working relationships with their employees.

Leaders with strong, trusting and authentic relationships with their teams know that investing time in building these bonds makes them more effective as a leader, and creates a foundation for success.

Good working relationships increase employee engagement and according to Gallup’s meta-analysis of employee engagement, business units with good employee engagement have 41% fewer quality defects and 37% less absenteeism. A 21% increase in productivity was also seen to result from higher employee engagement.

So even if you think you don’t need to be loved in the workplace, you will definitely need to be skilled in building good relationships in order to be an effective leader. 

If your team is highly engaged and happy in the workplace, you are likely to be well respected as a leader with employees who love what they do, and hopefully the strong relationships you cultivate will help your team perform at their highest level.

Tips for leaders to navigate relationships in the workplace »

2. Agility and adaptability (stay at the cutting edge as a leader)

In a study conducted by Development Dimensions International in 2008, one of the most important leadership qualities, was the ability to facilitate change. Fast-forward to 2022, adaptability is  one of the most important leadership skills. 

Leaders need to contend with a hyper-competitive business environment, geo-politics, climate change, the changes advanced by the COVID-19 pandemic and many more factors, all of which require leaders to adapt and develop agility.

Effective leaders must be able to adapt to both internal, and external changes – even if that means working outside of your comfort zone. As a leader you need to develop a lifelong learning mentality to ensure that you are not left behind by shifts in your industry, and can give your business the competitive edge. This is where as a leader you need to be agile and adaptable, which is easier said than done.

One key way to develop leadership agility and adaptability is to be accountable and assume your responsibilities, making sure that you have laid out a plan on how you should respond to change.

This plan should contain an achievable timeline, allowing you to constantly check your progress on how well you are adapting to the change and how you are exemplifying this to your team.

3. Innovation and creativity (learn to push your boundaries)

Innovation in leadership is of utmost importance for every company. Successful innovation begins with ideation — the phase where outstanding ideas are developed and become the foundation of innovation success.

Consider some of the industry leaders, what did it take for Apple to become a leader technology industry? They made innovations to products with their customers in mind.

Steve Jobs, and perhaps even more so Tim Cook led the innovation and creativity for Apple Inc. by continuously forging ahead of the competition, and this probably made them some of the most innovative leaders within the tech industry.

The increasing demand for creativity and innovation will continue to be a driving force for executives, as  who must harness their leadership skills in these areas to be effective and competitive.

4. Employee motivation (improve engagement and efficiency)

In close connection with relationship building, the ability to motivate your workforce is as important as keeping employee engagement high. One of the most effective leadership skills is knowing how to continuously motivate employees, which requires leaders to be connected to their teams and attentive to what is going on around them.

In a study done by the firm Interact on 10,000 employees in the US which cited that the number 1 complaint (63%) from employees concerning their managers is lack of appreciation, and, conversely, when managers appreciate their contribution, their engagement increases by 60%.

In another study by Westminster College, it was found that boosting morale is the top (32%) motivational technique employees prefer. If employees are not motivated, the company can be negatively affected (financially) with absenteeism, attrition and low productivity.

Motivated employees are much more engaged, they are also more self-confident in what they do, and can do. This leads them to know how to react in difficult situations and develop innovative ideas that could help optimize business performance.

5. Decision-making (leading with conviction)

A leader is tasked with making decisions all the time. To be an effective leader, those decision making skills need to be top notch. Critical decisions affecting your organization on a large scale need to be sound, rational and solid.

In reality, your decisions as a leader will determine your – and potentially your organization’s – success. Making decisions, however big or small, are a fundamental part of Leadership, as a leader you need to develop strong decision-making skills and have the conviction to stand by your decisions, whilst also recognizing the need to adapt when those decisions do not lead to the desired outcome. It is a unique balancing act.

Remember, some decisions may not always be favorable. Making an unpopular but necessary decision is probably one of the most difficult tasks as a leader, but it is vital that as a leader you are able to recognize your responsibilities and make clear decisions for your team or organization.

📝 Try an exercise for better decision making »

6. Conflict management (keeping the peace)

According to the American Management Association, managers spend at least 24% of their time managing conflict. Conflict can happen in any area of business.

A conflict is considered to be any issue between two or more individuals that can potentially disrupt work. Conflict in business may go beyond the workplace as it can involve customers, suppliers and even competitors.

When a conflict arises, an effective leader should be able to jump in and resolve or at least mitigate the conflict before it affects the business negatively. When properly dealt with, a conflict may even turn out to be positive for your organization, as it can often lead to stronger bonds or new ideas.

To be effective as a leader, you must be good at identifying conflict, and have foresight on how to resolve it. It is also essential to be rational when faced with confrontation. Conflict management is no doubt one of the most important leadership competencies but Robyn Short cited a study that found 60% of U.S. employees have not received any conflict management skills training.

As a leader, it is important that you are able to manage conflict, but developing these same skills in your team can help avoid conflict altogether.

7. Negotiation (winning the game)

Negotiation is a process where two parties with different ideals get together and mutually agree on what an outcome should be. According to Skills You Need, the process of negotiation involves 6 stages:

  1. Preparation
  2. Discussion
  3. Clarification of goals
  4. Negotiation towards a Win-Win outcome
  5. Agreement
  6. Implementation of a course of action

Good negotiations can be beneficial to an organization because they will build better relationships, both internally and externally. They will also help find the best long-term solution by getting the most out of two different sides. An effective leader must be well versed in his negotiation style to move an organization forward.

As a leader, negotiation is used to understand the interests of your employees and to find ways of satisfying those interests, in order to achieve organizational goals.

8. Critical Thinking (understand the links between ideas)

Leading a business is unquestionably very challenging. To be successful, a leader must make a lot of difficult decisions. Research by the Brandon Hall Group shows that critical thinking is the most important skill required of leaders to successfully lead an organization.

Critical thinking is the ability to think clearly, whilst building a logical connection between different ideas. Critical thinkers are intelligent decision makers, highly analytical and generally always rational. These attributes are essential to lead an organization towards achieving its goal.

Typically,  critical thinkers will rigorously question ideas and assumptions, they will always seek to determine whether the ideas, arguments and findings represent the true picture and are commonly able to recognize inconsistencies and errors in reasoning to achieve the desired outcome.

Get the latest insights by IMD
Leading a High-Performing Team: What You Need to Know

Do you want to lead a high-performing team but don’t know where to start? It’s no secret that developing and leading a high-performing team is essential for success in any field. However, many people feel overwhelmed when it comes to this task. But don’t worry, we’ve got your back. You can quickly develop and lead […]

Everything you need to know about Digital Ecosystems

An introduction to digital ecosystems A digital ecosystem is a combination of technologies that allow you to access information in real time. It’s a big buzzword today, but it’s not a new concept. The first digital ecosystems were built around the turn of the 20th century by British scientist Dr Alexander Graham Bell, who invented both […]

How to build efficient Digital Partnerships

Stay ahead in today’s digital age To stay ahead in today’s digital age, businesses must form efficient digital partnerships. By working with the right partners, you can create a robust digital ecosystem to help you reach new markets and grow your business. The last decade has seen the rise of a host of new technologies […]