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The skills that helped leaders succeed five years ago may no longer be enough to keep them effective today.

Artificial intelligence is reshaping job responsibilities, organizational complexity is increasing, and the expectations placed on leaders continue to evolve. Yet many organizations still approach leadership development as a one-time investment rather than an ongoing requirement.

According to Microsoft’s 2025 Work Trend Index, 82% of leaders believe their organizations have reached a pivotal moment that requires rethinking core aspects of strategy and operations. At the same time, 80% of employees report lacking the time or energy to complete their work.

These findings highlight a growing challenge: The demands placed on leaders are changing faster than many of their established habits and capabilities.

Leadership effectiveness is not a permanent achievement. It requires continuous investment in skills that can become outdated, neglected, or insufficient as workplace expectations evolve.

Research from Zenger Folkman reveals three areas where leaders face particularly significant consequences when they fail to maintain and strengthen their capabilities.

1. Digital Fluency: Falling Behind Carries A Greater Penalty Than Getting Ahead
As artificial intelligence becomes embedded in everyday business operations, digital fluency is shifting from a specialized advantage to a fundamental leadership expectation.

Research conducted by Zenger Folkman examining leaders’ digital skills revealed a striking imbalance.

Leaders rated in the bottom 10% on digital skills had overall leadership effectiveness ratings at just the 22nd percentile.

Meanwhile, leaders in the top 10% on digital skills were rated only 17 percentile points above average in overall leadership effectiveness.

The implication is significant. Leaders who demonstrate exceptional digital capabilities may receive a modest advantage in how others perceive their effectiveness. However, those who lack basic digital competence face a much larger penalty.

Strong digital skills are increasingly expected. Weak digital skills can undermine a leader’s overall credibility.

This finding becomes particularly relevant as organizations accelerate their adoption of artificial intelligence.

Microsoft’s 2024 Work Trend Index found that 66% of leaders surveyed said they would not hire someone without AI skills, while 71% indicated they would prefer a less experienced candidate with AI skills over a more experienced candidate without them.

Although these findings reflect hiring intentions rather than actual hiring outcomes, they illustrate how quickly expectations around technological competence are changing.

For experienced leaders, this creates an uncomfortable reality. Years of industry knowledge, strong communication skills, and sound judgment remain valuable, but they may not compensate for an unwillingness to adapt to new technology.

Digital fluency does not require leaders to become programmers or technical experts. It requires understanding how emerging technologies affect their organizations, employees, customers, and competitive position.

Leaders must also recognize that their own attitudes toward technology influence how employees approach change.

A leader who dismisses new tools without understanding their potential may discourage experimentation. Conversely, a leader who demonstrates curiosity and a willingness to learn can help create an environment where employees feel comfortable developing new capabilities.

What effective leaders should do:

Rather than attempting to master every emerging technology, leaders should identify the tools most relevant to their responsibilities and invest time in understanding their practical applications.

They should regularly ask employees how technology is changing their work, encourage responsible experimentation, and seek opportunities to improve their own digital competence.

Perhaps most importantly, leaders need to become comfortable acknowledging what they do not know.

The greatest risk is not being unfamiliar with a new technology. It is assuming that yesterday’s expertise eliminates the need to keep learning.

2. Organizational Effectiveness: Increasing Complexity Requires Better Leadership Systems
Technology is not the only factor making leadership more demanding.

Organizations are navigating growing volumes of information, expanding communication channels, evolving regulations, and increasingly interconnected business processes.

While technology has made many individual tasks easier, it has also created new expectations for speed, responsiveness, and availability.

Research suggests these demands are placing significant pressure on employees and leaders alike.

Microsoft’s 2023 Work Trend Index found that 68% of surveyed workers reported insufficient uninterrupted focus time during the workday, while 62% said they struggled with spending too much time searching for information.

The same research found that employees spent an average of 57% of their time communicating through meetings, email, and chat, compared with 43% spent creating documents, presentations, and other work products.

These findings raise an important question: Are leaders becoming more productive, or are they simply becoming busier?

As responsibilities expand, many leaders respond by working longer hours, attending more meetings, and attempting to personally oversee an increasing number of decisions.

Unfortunately, the habits that made someone successful earlier in their career may become obstacles as their responsibilities grow.

An individual contributor may be rewarded for personally solving difficult problems. A senior leader must increasingly succeed by creating the conditions that allow others to solve those problems.

This transition requires a different approach to organization, prioritization, and delegation.

Effective leaders recognize that their responsibility is not to personally manage every detail. It is to establish clear priorities, build capable teams, and create systems that allow work to move forward efficiently.

One of the most important skills leaders can develop is distinguishing between activities that require their direct involvement and those that can be delegated or eliminated.

Without that discipline, leaders risk becoming bottlenecks in their own organizations.

What effective leaders should do:

Leaders should regularly evaluate how they spend their time and whether those activities contribute meaningfully to organizational priorities.

Meetings should have clear purposes. Decision-making authority should be distributed appropriately. Employees should understand which responsibilities they own and when leadership involvement is necessary.

Leaders should also identify trusted colleagues who bring complementary strengths and perspectives.

Delegation is not simply a strategy for reducing workload. It is an essential capability for managing complexity and developing others.

As organizations become more complicated, leadership effectiveness will increasingly depend on the ability to simplify work rather than add to it.

3. Building Relationships: A 63-Percentile-Point Difference In Leadership Effectiveness
Of the three capabilities, relationship-building may be the most underestimated.

Leaders often devote significant attention to developing technical expertise, strategic thinking, and operational knowledge. Yet the quality of their professional relationships can have a profound influence on how effectively they lead.

Research from Zenger Folkman demonstrates the strength of this connection.

Leaders rated in the bottom quartile for building relationships had average overall leadership effectiveness ratings at the 19th percentile.

Those rated in the top quartile averaged the 82nd percentile.

That represents a 63-percentile-point difference in overall leadership effectiveness.

While this relationship is correlational and does not establish that relationship-building alone causes higher leadership effectiveness, the magnitude of the difference is noteworthy.

Our research also found that leaders with stronger relationship-building skills tended to receive higher ratings across all 19 leadership competencies measured, including communication, inspiring others, setting stretch goals, strategic perspective, and technical expertise.

Why would one competency be associated with so many others?

Because leadership effectiveness is not determined solely by what leaders know or what they accomplish individually.

It is also shaped by how others experience working with them.

Consider two leaders who communicate the same ambitious goal.

One has invested time in building trust, understanding employees’ concerns, and demonstrating genuine interest in their success.

The other has strong technical expertise but maintains distant or transactional relationships with team members.

Although the message may be identical, employees may interpret and respond to it very differently.

Strong relationships create the foundation for communication, collaboration, accountability, and influence.

They also become particularly important during periods of organizational change.

Employees are more likely to raise concerns, share ideas, and engage in difficult conversations when they trust the people leading them.

However, relationships require ongoing attention.

As leaders advance in their careers, they may assume their established professional networks are sufficient. They have trusted colleagues, longtime mentors, and familiar contacts.

But organizations continually change.

Employees join and leave. Teams are reorganized. Responsibilities shift. New stakeholders emerge.

Relationships that once supported a leader’s effectiveness may become less relevant, while new relationships require development.

Even established relationships can deteriorate when leaders stop investing in them.

What effective leaders should do:

Leaders should approach relationship-building as a continuous responsibility rather than an activity reserved for networking events or career transitions.

This includes getting to know new employees, maintaining connections across departments, seeking perspectives from people with different experiences, and regularly checking in with colleagues.

Listening is particularly important.

Leaders who consistently demonstrate interest in others’ ideas and concerns are better positioned to identify problems, strengthen trust, and encourage collaboration.

Relationships should also be developed before they are needed.

A leader who only reaches out when requesting assistance may struggle to establish the trust required during difficult situations.

The strongest professional relationships are built through consistent interactions, mutual respect, and genuine concern for others.

Why Leadership Development Requires Continuous Investment
These three capabilities share an important characteristic: None can be developed once and considered permanently complete.

Digital skills must evolve as technology changes.

Organizational habits must adapt as responsibilities and complexity increase.

Professional relationships must be maintained as people, teams, and organizations change.

Together, they represent the ongoing maintenance costs of leadership.

This creates a challenge for organizations that treat leadership development primarily as a series of isolated training events.

A manager attends a development program, learns new skills, and returns to work. The organization may consider that investment complete.

But the environment in which that manager operates continues to change.

Without opportunities to practice, receive feedback, and strengthen capabilities over time, the value of that initial development investment may diminish.

The same principle applies to experienced executives.

A successful track record does not guarantee continued effectiveness. In some cases, past success may even make leaders less willing to question established habits or recognize emerging weaknesses.

One of the most valuable questions leaders can ask is not simply whether they are effective today, but whether they are developing the capabilities they will need tomorrow.

That requires a willingness to seek feedback, identify areas for improvement, and invest consistently in professional growth.

It also requires recognizing that leadership development is not limited to formal programs.

Learning a new technology, improving a delegation process, or strengthening a relationship may seem like a relatively small activity.

But these actions can produce meaningful benefits when practiced consistently. READ MORE

By Joseph Folkman

Source: forbes.com