5 Foundational Leadership Competencies for Modern Leaders

Andrew Temte, Ph.D, CFA


Talent retention is increasingly important, as the costs of recruiting and training new employees continue to rise and sourcing the right talent becomes more difficult. In addition, employees are more likely to leave their boss than their company: Gallup’s 2015 “State of the American Manager” study found that managers account for 70% of the variance in employee engagement and that only 35% of managers are engaged in their job.

Since 2015, the management and leadership field has rapidly accelerated its shift toward equity, collaboration, agility and inclusion, but we still have a long way to go. Leaders who use rigid, directive, top-down, ego-driven management styles are under tremendous pressure and may be destroying more value than they create, as they are a primary source of engagement and retention challenges. Many such leaders want to adopt new management skills but aren’t sure how to make the necessary changes that may run counter to long-held unconscious biases and belief systems.

To help frame the challenge and bring it to life, leaders should use the concept of balance. Specifically, as leaders, we must strike an appropriate balance between strength and vulnerability, confidence and selflessness, passion and measure, single-mindedness and inclusivity, determination and curiosity, and leadership and followership. But how?

The Top Leadership Characteristics for 2021 and Beyond

A simple internet search of “top leadership competencies for 2021” yields a plethora of articles. It’s easy to experience cognitive overload when reviewing these lists — much like the experience we have in the cereal aisle at the grocery store. There are too many choices and too many things to work on!

Instead of serving up what has become the usual fare, here are several leadership traits that are “gateway” or foundational competencies. They will help open doors for progress toward the more specific leadership competencies that tend to make other “top 10” lists.

1. Vulnerability

Many of us were taught from an early age to strap on a suit of emotional armor when entering the workplace and to never let our guard down. A lack of vulnerability leads to unproductive workplace behaviors, the most significant of which is an inability to admit failure or accept accountability for poor outcomes and performance.

Most leaders would agree that learning from failure is critical for businesses that want to foster an environment of innovation and growth, but team members take their cues from the boss. If the leader never admits to falling down or doesn’t show by example that positive change can result from failure, team members will mimic this behavior. They will obfuscate or blatantly hide challenges, which undermines healthy team dynamics such as trust, collaboration and transparency. Team and organizational trust is difficult, if not impossible, to build and maintain when vulnerability is low.

2. Creativity

I used to raise an eyebrow when I saw creativity in the list of management competencies. My opinion at the time was that you’re born either “right brained” or “left brained” and that trying to grow analytical or creative skills is difficult at best.

It may be true that we’re predisposed to analytical or creative thinking in our natural state, but analytical leaders can build an environment for creativity within their sphere of influence. To promote creativity within an organization, leaders must:

  • Quiet the ego.
  • Hire for diversity of thought, culture and demographics.
  • Make the space in organizational workflow to encourage and test new ideas.
  • Listen carefully to stakeholder and customer needs.

When the ego is quiet, the ears hear more from team members who hold different beliefs and opinions — leading to a richer tapestry of outcomes against which to test and iterate.

When the ego is quiet, the ears hear more from team members who hold different beliefs and opinions.

3. Courage

It takes courage to take off that suit of emotional armor and open our minds to different ways of working. Shedding their armor yields two primary benefits for leaders: Firstly, it will help more of their authentic self to shine through in their work. Secondly, it will give their colleagues and team members permission to bring more of their “whole selves” into the workplace, which will allow for diversity of thought and opinion to flourish, sparking more creativity and driving the business to new heights.

It takes courage to be vulnerable and courage to be creative. It takes courage to delegate authority, empower teams, and foster an environment where failure is viewed as a positive and not a negative. It also takes courage to hold others accountable and speak truth to power so that organizational trust can take hold and bloom.

4. A Continuous Improvement Mindset

Many leaders, especially in service industries, shy away from adopting continuous improvement practices. They believe implementation is too difficult or that the principles only apply in manufacturing or production environments. However, all leaders can adopt continuous improvement practices when they distill it to its core tenets and avoid taking a purist approach.

At its core, continuous improvement means that leaders and their team:

  • Identify and minimize waste.
  • Respect their people resources.
  • Have a maniacal focus on their customer.

Once these three elements come into focus, implementation of tools like the “five whys,” the pursuit of organizational health and trust, and adoption of net promoter scores (NPSs) become natural components of the leader’s management operating system.

5. A Lifelong Learning Mindset

According to the World Economic Forum, we are facing a “Reskilling Revolution” aimed at reskilling up to one billion people by 2030. The job disruption we will encounter due to advances in technology, robotics, machine learning and artificial intelligence is forecast to be pervasive across multiple job clusters and myriad industry sectors.

This disruption will require managers and leaders in almost every organization to model lifelong learning behaviors and foster an environment for continuous learning. Corporate learning opportunities must lean heavily toward experiential models and be designed such that learning can be embedded into the workplace.

Learning must also be valued by both the business and employee, outcomes must be measurable, and stackable credentials must have “currency” both within and outside organizational boundaries. Most importantly, corporate learning agendas must map directly to both short and long-term business goals and the company’s “North Star.”

The old days of earning a degree to check a box on a job description are over. We’re rapidly moving toward a world where validated skill portfolios represent viable signals of workplace competency. To accomplish these big, hairy, audacious learning goals, managers must make learning a priority and create the time and space for it for their team members.

Coaching as a Strategic Enabler

Learning and development (L&D) leaders might look at this list and wonder how to instill and grow these five “gateway” or foundational characteristics into the management ranks of their business. The answer is coaching.

Coaching was once reserved for the elite due to its cost and lack of scalability across the organization. New technology platforms and a plethora of coaches worldwide who are trained in multiple disciplines have significantly improved scalability and reduced the cost to serve.

It is useful to develop and deliver a formal curriculum around the concepts of vulnerability, creativity, courage, continuous improvement and lifelong learning. However, making significant progress at the individual leader level requires personal contemplation and reflection to identify calcified management practices and unconscious biases that are lurking under the surface.

For example, a coach can help explore the “five whys” construct to uncover the root cause of fixed mindsets and help guide leaders toward the adoption and expansion of the five foundational leadership characteristics. To build human skills, we must place leaders within safe boundaries that make them purposefully uncomfortable. Coaches can help managers and leaders become uncomfortable and help them navigate toward that next best version of themselves.

When coaching objectives are aligned with business goals and delivered at scale across, down and through the company’s management ranks, coaching can be the perfect tool to bring learning interventions to life. Investment in coaching to help instill vulnerability, creativity and courage, and develop continuous improvement and lifelong learning mindsets, will drive down the costs of disengagement.

Gallup’s 2017 “State of the American Workplace” report estimates that the cost of actively disengaged employees within the workforce is $483 to $605 billion in lost productivity. Couple this statistic with the need to reskill one billion workers by 2030, and it should become obvious that turning managers at all levels into balanced, agile, learning leaders is critical to unlocking more corporate value and creating healthier teams.

Coaching can be the perfect tool to bring learning interventions to life.