Top 5 Leadership Skills Every Leader Needs to Develop
Successful leadership today is more complex than ever. The rapidly changing business environment, technological advances and the presence of new generations in the workforce are all factors that require leaders to adapt and evolve continuously. Drawing on our research and experience, we have identified five key competencies that are essential for leaders in 2025. Let's also look at the top 5 leadership competencies that every leader needs/will need.
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1. Adaptive Decision Making
Adaptive decision-making ability is perhaps the most critical leadership competence in today's fast-changing business environment. According to McKinsey's 2023 survey, companies whose leaders have high levels of adaptive decision-making skills outperform their competitors by an average of 28%.
What do we mean by adaptive decision-making?
- Quick situational awareness and reactivity
- Flexible mindset
- Considering several alternatives in parallel
- Regular review and correction of decisions
Methods to improve adaptive decision-making:
Scenario planning
- Developing different future scenarios
- Conducting "What if...?" type analyses
- Simulation of crisis situations
- Making decision trees
Developing data analysis skills
- Using Business Intelligence tools
- Learning predictive analytical methods
- Application of data visualisation techniques
Deployment of feedback systems
- Regular performance reviews
- 360 degree feedback
- Tracking key performance indicators (KPIs)
Practical example:
During the Covid-19 epidemic, the head of a technology company reorganised the entire operation into teleworking in a matter of days, and then introduced a hybrid model during the recovery period, constantly taking into account both employee needs and productivity indicators.
The impact of adaptive decision-making on business performance:
| Territory | Rate of improvement |
|---|---|
| Response time | +45% |
| Cost-effectiveness | +32% |
| Employee satisfaction | +28% |
| Market share | +15% |
2. Emotional Intelligence (EQ)
The importance of emotional intelligence is growing every year. According to Deloitte's Human Capital Trends report, teams of leaders with high EQ:
- 67% to manage conflicts more effectively
- 56% higher employee satisfaction
- they produce lower turnover than 41%
Five main areas of emotional intelligence and methods of development:
| Territory | Description | Development method | Expected results |
|---|---|---|---|
| Önismeret | Recognising our own emotions | Regular self-reflection, keeping a diary | Better decision-making, stress management |
| Self-regulation | Managing our emotions | Practising stress management techniques | A more balanced leadership presence |
| Motivation | Internal driving force | Clarifying goals, formulating a personal mission statement | Higher performance |
| Empathy | Understanding the emotions of others | Practising active listening | Better teamwork |
| Social skills | Relationship management | Communication training | More effective cooperation |
Practical steps to develop EQ:
Regular self-assessment
- Keeping an emotional diary
- Completing personality tests
- Participation in mentoring programmes
Developing communication skills
- Practising active listening techniques
- Awareness of non-verbal communication
- Developing a feedback culture
Learning stress management techniques
- Mindfulness exercises
- Time management methods
- Relaxation techniques
3. Strategic Thinking
According to an analysis by the Boston Consulting Group, it is the ability to think strategically that most distinguishes excellent leaders from average ones. 78% of successful leaders regularly take time for strategic planning and thinking.
Detailed steps for developing strategic thinking:
Regular market analysis
- Preparing a competitive analysis
- Identifying industry trends
- Monitoring macroeconomic indicators
Recognising trends and patterns
- Application of Big Data analytical methods
- Monitoring changes in consumer behaviour
- Mapping technological development trends
Setting long-term goals
- Regular review of vision and mission
- Setting SMART targets
- Defining strategic milestones
Developing alternative scenarios
- Best case/worst case analyses
- Risk analysis and management
- Preparing crisis plans
Optimal allocation of resources
- Cost-benefit analyses
- Human resource planning
- Technology investment planning
Tools for developing strategic thinking:
| Tool | Field of application | Expected result |
|---|---|---|
| SWOT analysis | Situation analysis | Overview of the situation |
| Porter 5 power model | Industry analysis | Understanding competition |
| Balanced scorecard | Performance measurement | Balanced development |
| PESTEL analysis | Environmental analysis | Identifying externalities |
Case study:
In 2022, at the start of the energy crisis, the head of a medium-sized domestic company immediately launched an energy efficiency programme. While competitors were reactive to the challenges, his proactive approach resulted in cost savings of 45% by 2023.
4. Digital Leadership Skills
In the age of digitalisation, it is essential that managers understand and use technology effectively. According to the World Economic Forum, by 2025, 85% of jobs will have a significant digital component.
Key areas in digital leadership:
Data-driven decision-making
- Using Business Intelligence systems
- Using predictive analytics
- Real-time data analysis
- Design and use of dashboards
Digital collaboration platforms
- Project management software
- Virtual teamwork tools
- Cloud-based solutions
- Collaboration applications
Cybersecurity
- Data protection protocols
- Managing security risks
- Developing employee awareness
- Incident management plans
Automation options
- Process Automation (RPA)
- Artificial intelligence applications
- Chatbot solutions
- Workflow optimisation
Statistical overview of digital leadership skills:
| Skill level | Ratio (2023) | Expected rate (2025) |
|---|---|---|
| Advanced | 23% | 35% |
| Intermediate level | 45% | 50% |
| Basic level | 27% | 13% |
| To be developed | 5% | 2% |
Success factors for digital transformation projects:
Clear strategy and objectives
- Measurable objectives
- Timed milestones
- ROI calculations
Adequate resources
- Expert team
- Technological infrastructure
- Training programmes
Change management
- Communication plan
- Stakeholder management
- Resistance management
5. Agile Management Methods
The agile leadership is not just a methodology, but an approach. A Harvard Business Review research shows that the projects of managers using agile methods:
- They finish faster with 30%
- 25% are more cost-effective
- 35% result in higher customer satisfaction
The principles of agile leadership and how to put them into practice:
Iterative development
- Sprint planning
- Continuous feedback
- Rapid prototypes
- Adaptive design
Team autonomy
- Self-organising teams
- Delegated decision-making
- Authorised management
- Cross-functional cooperation
Fast feedback
- Daily stand-up meetings
- Sprint reviews-k
- Retrospective events
- Continuous integration
Continuous learning
- Knowledge-sharing events
- Culture of experimentation
- Learning from mistakes
- Best practice collections
Value focus
- Customer-centric development
- Value stream mapping
- Prioritisation techniques
- MVP approach
The stages of implementing agile leadership:
| Phase | Duration | Main activities | Expected results |
|---|---|---|---|
| Preparation | 1-2 months | Situation assessment, planning | Clear goals, timetable |
| Pilot | 2-3 months | Testing with a smaller team | Experiences, lessons learned |
| Extension | 3-6 months | Implementation at organisational level | Full implementation |
| Stabilisation | 6-12 months | Fine tuning, optimisation | Mature agile operation |
Practical implementation:
A financial services manager introduced bi-weekly sprints and daily stand-up meetings. The result: 40% faster product development and 65% higher team satisfaction.
Summary and Recommendations
Developing the five competences above is not optional, but a necessity for modern leaders. Our research shows that leaders who consciously develop these areas, on average:
- With 45%, they lead more effective teams
- 38% to achieve better business results
- 52% higher employee satisfaction
Development of a Development Strategy:
Competence self-assessment
- 360 degree survey
- Determination of skill level
- Identifying areas for development
Setting priorities
- Setting up an emergency order
- Assessment of resources
- Definition of time frames
A personalised development plan
- Setting specific targets
- Choice of development methods
- Timing and milestones
Regular feedback
- Mentoring programme
- Coaching sessions
- Performance assessments
Measuring progress
- Monitoring KPIs
- Competency tests
- ROI calculations
The return on investment for developing leadership skills:
| Area of competence | ROI (1 year) | ROI (3 years) |
|---|---|---|
| Adaptive decision-making | 125% | 245% |
| Emotional intelligence | 145% | 280% |
| Strategic thinking | 165% | 310% |
| Digital skills | 190% | 340% |
| Agile leadership | 155% | 295% |
Putting development into practice:
1. Formal training opportunities
- MBA programmes
- Individual Coaching / Executive Coaching
- Leadership development
- Leadership training
- Professional conferences
- Online courses and webinars
- Professional specialisations, qualifications
- Developing soft skills
2. Informal learning methods
- Building mentoring relationships
- Creating peer-learning groups
- Follow the literature regularly
- Attend networking events
- Best practice sharing forums
3. On-the-job development
- Project management options
- Job rotation programmes
- International postings
- Cross-functional team leadership
- Change management projects
Common Challenges and Solutions
Lack of time
- Solution: using microlearning techniques
- incorporating 15-20 minute learning blocks into your daily routine
- Using mobile learning platforms
- Podcast listening while travelling
Scalability
- Solution: developing a KPI system
- Regular competence assessments
- Tracking performance indicators
- Making ROI calculations
Maintaining motivation
- Solution: incorporating gamification elements
- Celebrating success
- Setting development milestones
- Establishing a peer support system
The Leadership Competences of the Future
They are expected to become even more prominent in the next 5-10 years:
Artificial Intelligence Management
- AI-based decision support
- Human-machine cooperation
- Ethical use of AI
- Automation strategies
Virtual Team Leadership
- Remote work optimisation
- Virtual cooperation platforms
- Digital team building
- Coordination across time zones
Sustainability Leadership
- Integrating ESG aspects
- Circular economy principles
- Carbon footprint management
- Social taking responsibility
Success Stories in Practice
Case 1: Digital Transformation
A medium-sized company with 500 employees led a complete digital transformation in 18 months le. Key elements:
- Competence development programme at all management levels
- Implementation of Agile methodologies
- Designing a digital workplace
Result: 35% efficiency increase, 28% cost reduction
Case 2: Cultural Change
The head of the Hungarian subsidiary of a multinational company focused on developing emotional intelligence:
- 6-month EQ development programme
- Regular coaching sessions
- Conflict management workshops
Result: 45% reduction in turnover, 65% increase in employee satisfaction
Final Thoughts and Recommendations
Developing leadership competences is a journey, not a destination. Our experience shows that the most successful leaders are those who:
- Regularly review their competences
- Open to learning new methods and techniques
- They consciously plan their development path
- Sharing their experiences and learning from others
The key to becoming a successful leader is not to achieve perfection in every area, but to strive for continuous improvement and a willingness to learn. Developing the five key competencies will help you to:
- Navigate the changing business environment more confidently
- Lead your teams more effectively
- Achieve better business results
- Ensure sustainable growth for our organisations
In conclusion, we recommend that all managers draw up a personal development plan that includes:
- Prioritising the competences to be developed
- Specific development targets and deadlines
- Chosen development methods
- Measurement and evaluation criteria
- Regular review points
Note: The statistics and research results in this article are based on the 2023 and 2024 Global Leadership Surveys. When selecting specific development methods and tools, always take individual and organisational characteristics into account.
Frequently asked questions on developing leadership competences
How long does it take to develop the 5 key competences effectively?
Developing key competences is usually a 12-18 month process. The pace of development varies from individual to individual, but our experience has shown that focusing on one competence per month on a rotational basis is the best way to achieve results. With continued practice and application, there is noticeable improvement in all areas after about 6 months.
Which competences should you start developing?
It is worth starting with the development of emotional intelligence (EQ), as this is the foundation for the effective development of other competences. Developing EQ will help to improve self-awareness and identify areas for development more accurately. It is then recommended to develop adaptive decision making skills, after which further competences can be prioritised according to the needs of the individual leadership role.
How can the development of competences be measured?
The development of competences can be measured in several ways: - 360 degree surveys (every six months) - (quarterly (half-yearly)) - by tracking KPI indicators - Analysis of team performance indicators - Employee satisfaction surveys - Employee satisfaction surveys A combination of multi-level measurement is most effective, where both subjective feedback and objective indicators are taken into account.
How often do these competences need to be reviewed and updated?
It is recommended that leadership competencies are reviewed at least every six months, but in a rapidly changing business environment, a quarterly review is preferable. In the area of digital skills, a frequent review (every 2-3 months) is particularly important due to new technologies and trends. And agile management practices should be continuously fine-tuned based on feedback.
What are the most common mistakes in developing leadership competences?
The most common mistakes: 1. Developing too many competences at the same time 2. Inadequate prioritisation 3. Lack of measurement and feedback 4. Failure to put into practice 5. Planning development for too short a timeframe These can be avoided through proper planning and regular review.
How can motivation be maintained during competence development?
A key elements for maintaining motivation: – Mérhető, kisebb részcélok kitűzése – Sikerek és eredmények rendszeres dokumentálása – Fejlődési napló vezetése – Mentor vagy fejlesztő partner bevonása – Rendszeres visszajelzések kérése és feldolgozása A gamification elemek beépítése szintén segíthet a motivation to maintain.
What resources are needed to develop competences?
Key resource needs for competence development: - Time commitment: 4-6 hours per week - Financial investment: cost of training courses - Human resources: involvement of mentors, coaches - Technological tools: online platforms, development software - Organisational support: buy-in from management, team collaboration Investment usually pays back in measurable business results in 12-18 months.
How can competence development be coordinated with daily operational tasks?
Key to alignment: - Incorporating development goals into daily routines - Use of microlearning techniques - Taking advantage of on-the-job learning opportunities - Dedicating blocks of time to development - Immediate practical application of what has been learned It is recommended that development activities are timed to coincide with the most effective working period.
What role do digital tools play in competence development?
The role of digital tools is multifaceted: - Access to online courses and webinars - Access online webinars and online learning - Virtual coaching and mentoring opportunities - Using e-learning platforms - Use of performance measurement software Digital solutions provide flexibility and personalisation in the development process.
How to involve the team in developing leadership competences?
Effective ways to engage the team: - Ask for regular feedback - Setting common development goals - Organising knowledge-sharing workshops - Develop a mentoring programme - Setting up peer-learning groups Team involvement not only helps the development of the leader, but also has a positive impact on the organisational culture.
