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Talent Assessment | 8 Min Read

Ten key leadership competencies critical to embrace the new business reality

About This Topic


Great leaders create a vision, exhibit influence and inspiration, build relationships, coach others, and demonstrate consistency in various circumstances. However, as organizations worldwide experience transformation at a phenomenal pace, the continual and rapid changes in the business environment have underlined the need to adapt, adopt, and reposition businesses to remain relevant.

This underscores the need for versatile leaders proficient in core leadership competencies and can address a wide range of challenges. These competencies are the sum and substance of effective leadership, and hence, organizations that focus on leadership competencies’ development can make the right decisions on hiring, developing, and promoting leaders.


Types of leadership competencies

Leadership competencies are skills, knowledge, behaviors, values, and abilities that define effective leaders. They define the standards of excellence which organizations focus on to develop a blueprint for identifying leaders suitable for current and potential roles.

1. Learning orientation

Learning orientation refers to a tendency to internalize a learning mindset and constantly seek learning opportunities. It also involves being open to feedback and reflecting on past experiences to learn from successes and failures.

Criticality for business

Learning orientation is a critical competency because it keeps leaders inspired, curious, and well-equipped on the developmental journey. The willingness and intent to continually learn and grow are crucial in the current environment of rapid changes, making it a critical leadership competency. It also helps reduce complexities as leaders learn about different forces of change that create these complexities.

Behavioral indicators at the workplace

  • Openly shares knowledge and actively seeks opportunities to upgrade technical and professional skills while inspiring others.
  • Has the ability to unlearn old models and processes that no longer serve the business.
  • Critically utilizes lessons learned from past successes and failures.
  • Regularly engages oneself and others in training and development opportunities.
  • Actively seeks feedback from others and incorporates them into their behavior

2. Resilience

Resilience refers to the ability to remain focused in the face of adversity and uncertainty. It also involves demonstrating skills to assess difficult situations by effective management of emotions and self.

Criticality for business

Resilient leaders have the grit, courage, and composure to lead their teams in challenging situations. The ability to adapt to changes is one of the most critical leadership attributes. In addition, resilience enables leaders to react calmly and inculcate a positive attitude when faced with challenges.

Behavioral indicators at the workplace

  • Stays calm and demonstrates logical thinking even in adverse or demanding situations.
  • Does not let failure affect self and team and works to overcome them.
  • Makes critical and difficult decisions in the interest of the organization.
  • Manages conflicting pressure.

3. Developing teams

This core competency demonstrates the ability to focus on team members’ professional growth and development by identifying their strengths and development areas. Leaders capable of building and nurturing competent teams tend to create learning opportunities for team members and mentor them to achieve their developmental goals.

Criticality for business

Team members who work well together help achieve organizational goals by maximizing output and productivity. However, leaders need to develop the skills and abilities of team members to build such a team. They are expected to find the gaps, pose challenging tasks, and drive them to achieve targets in a defined timeframe.

Behavioral indicators at the workplace

  • Provides challenging projects to the team, closely monitors their progress and offers constructive feedback.
  • Identifies areas of improvement by working closely with the team.
  • Helps the team troubleshoot and solve problems as needed.
  • Provides timely guidance and constructive suggestions to encourage their ongoing development.

4. Fostering diversity and collaboration

This competency values the importance of diversity and inclusion to lead a team of diverse individuals successfully. It also involves building a collaborative and inclusive team culture and leveraging diversity to work effectively.

Criticality for business

Leaders who value diversity and inclusion anticipate different views and perspectives to make well-informed decisions. They build an inclusive, collaborative team culture, leveraging diversity to work effectively.

Behavioral indicators at the workplace

  • Respectful and sensitive to people from different backgrounds.
  • Encourages and incorporates diverse points of view.
  • Ensures there are no biases in the team and treats everyone equally.
  • Promotes a collaborative approach to fulfilling tasks.

5. Fostering innovation

Competencies around innovation are crucial for effective leadership. It represents the tendency to approach issues differently, think out of the box, and strive for continual innovation.

Criticality for business

With the advent of new technologies and processes comes the need for organizations to think innovatively to stay competitive and plot their path to success. That’s why innovation-oriented leadership has taken precedence over traditional business thinking. This way, leaders can bring new ideas, approaches, and energy to foster a culture of innovation.

Behavioral indicators at the workplace

  • Takes risks and considers taking novel approaches to adapt to the change.
  • Utilizes available resources and makes a remarkable effort to devise new products and services.
  • Encourages the team to ideate and provides the necessary assistance.

6. Navigating ambiguity

Navigating ambiguity refers to the ability to handle ambiguous or unpredictable situations comfortably and demonstrate the capability to manage one’s work efficiently. Leaders who successfully manage ambiguity in unforeseen situations are better equipped to deal with risk and uncertainty.

Criticality for business

Navigating ambiguous situations propels leaders to use the opportunity and take calculated risks to explore new challenges, drive growth and help the organization achieve goals.

Behavioral indicators at the workplace

  • Anticipates the impact of change and accordingly prepares the team.
  • Accepts the change and devises new processes even with inadequate information to maintain productivity levels.
  • Provides necessary support and encouragement to team members in the face of ambiguous situations.

7. Change management

Change management refers to communicating the need and rationale for change and ensuring that all stakeholders are comfortable with it. It also involves minimizing complexities or reducing their impact and smoothening the process of change.

Criticality for business

An organization’s ability to deal with changes will determine if they can achieve their business goals. Leaders with change management competency can help organizations speed up transformation.

Behavioral indicators at the workplace

  • Displays adaptability and openness to change.
  • Finds synergies between old and new ways of doing things to reduce the complexity and disruption to work as much as possible.

8. Strategic thinking

A strategic mindset represents a tendency to think long-term, take a broader perspective, and build a shared vision with others. These professionals tend to formulate strategies to achieve the organizational vision and effectively execute the plan.

Criticality for business

Strategic thinking is a crucial element of the leadership competency model. Due to their knowledge and experience, leaders’ ability to think strategically results in the team’s high-quality deliverables.

Behavioral indicators at the workplace

  • Understands industry and market trends and identifies lucrative business opportunities and potential threats.
  • Considers challenges that are likely to arise in the future and prepares strategies to capture emerging opportunities and handle new challenges.
  • Focuses one’s energy and resources on the effective execution of strategies to achieve the vision of the organization.

9. Leveraging networks

Leveraging networks is the ability to develop networks. It involves building alliances across boundaries to create strategic relationships and effectively leverage them to achieve common goals.

Criticality for business

Leaders can achieve several goals by establishing a robust internal network. Strong relationships with key stakeholders can enable easier approval of projects.

Behavioral indicators at the workplace

  • Establishes positive relationships with colleagues and clients based on trust and mutual respect.
  • Builds a wide range of networks of relationships within and outside the organization to learn and leverage resources.

10. Critical decision-making

Critical decision-making is the ability to solve problems and make crucial decisions after considering available data and derive valid conclusions based on evidence and logical relationships.

Criticality for business

Great leaders know when to move quickly and proceed with the available information versus when to take more time and gather additional information.

Behavioral indicators at the workplace

  • Objectively examines issues, problems, and opportunities and interprets them critically.
  • Critically analyzes the information from diverse sources and differentiates between relevant and irrelevant information


How Mercer | Mettl can help

Mercer| Mettl’s leadership assessment tools help organizations generate a detailed competency profile of the leader, followed by a report and insights on how to undertake individual development plans. The reports offer a description of the competencies and behaviors considered integral to the development of leaders, helping them take on new challenges.

Some of the tools that are part of Mercer| Mettl’s leadership assessments are:

  1. Mercer | Mettl Personality Map (MPM)
  2. Mercer| Mettl Personality Profiler (MPP)
  3. 360-Degree Feedback System
  4. Behavioral assessments



The continuously evolving business landscape requires leaders who are agile in clear thinking, decision-making, and re-strategizing. When leaders consider minor setbacks a learning curve, they instill their teams’ confidence to push boundaries. Therefore, there’s a growing need for a leadership response approach that can be achieved with new-age key leadership competencies.



What are some critical leadership competencies?

Why is change management a critical competency?

Why is effective leadership critical?

Originally published July 17 2020, Updated August 3 2023

Written by

Abhilash works with the Content Marketing team of Mercer|Mettl. He has been contributing his bit to the world of online business for some years now. Abhilash is experienced in content marketing, along with SEO. He’s fond of writing useful posts, helping people, traveling, and savoring delicacies.

About This Topic

A leadership assessment is a type of personality test used to identify and develop the competencies required in a good leader - decision-making, empathy, communication, inspiring others, etc. A leadership test can contribute to organizational planning initiatives, such as promotion decisions, succession planning, etc.

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