The Top 5 CEO Leadership Skills

Summary:

The most important CEO leadership skills go beyond strategy and business expertise. Self-awareness, pausing, empathy, seeking, and decisiveness give CEOs the foundation to make better decisions, build trust, navigate change, and lead their organizations forward.

The demands on CEOs have changed dramatically, but the foundational CEO leadership skills needed for success remain surprisingly consistent. Today’s CEOs are expected to navigate uncertainty, retain top talent, develop future leaders, make high-stakes decisions, and lead through constant change.

Yet many discussions of CEO effectiveness focus on broad capabilities without looking at the behaviors underneath them. The strongest CEOs build their leadership on a core set of skills that shape how they listen, learn, make decisions, and respond under pressure.

DDI’s latest research underscores just how demanding the role has become: Among 233 CEOs surveyed, the top concerns include attracting and retaining talent, slowing economic growth, navigating uncertainty, and developing the next generation of leaders. In fact, 54% rank attracting and retaining top talent as their primary concern for the next five years.

But while the context has changed, many of the leadership challenges behind CEO success—or failure—are remarkably familiar.

What Has Always Made CEO Leadership Difficult

In the 1999 Fortune article Why CEOs Fail, the authors argued that CEOs failed not because they lacked strategies, but because they couldn't get their organizations to execute them. More than two decades later, many of the execution challenges they identified still feel remarkably familiar, including:

• Poor talent management. Specifically, the inability to put the right people in the right jobs or to hold onto poor performers too long.
• Decision and process gridlock. This leads to execution delays, missed market opportunities, frustrated employees, and loss of customers.
• Lack of change energy, focus, and tenacity. This results in needed changes not happening quickly enough.
• Narrow perspective. This can result from limited data or input, rejecting information that doesn't fit an existing worldview, and avoiding market reality.
• Diffused energy. This can happen when CEOs have multiple interests and activities that aren't core to their role.

These challenges may look different today, but the underlying leadership demands remain. And they reveal why certain foundational CEO leadership skills have endured even as the role has evolved.

Why the Fundamentals Still Matter

With so many capabilities competing for attention, it can be difficult to separate the skills CEOs need at their foundation from those they build over time. A look at the current literature on CEO leadership skills reveals two common approaches:

• A laundry list that does not identify or prioritize the core or foundational skills that, if absent, will severely limit a CEO’s effectiveness.
• A research list defining the handful of critical CEO leadership skills that drive success. While the “research” is appealing on the surface, it often relies on examples that support its conclusions and ignores those that don’t. Some research and longitudinal studies are positive exceptions. But even these don’t distinguish between foundational (i.e., critical skill-building blocks) and derivative leadership skills (i.e., those that develop from or build on the foundational skills).

This distinction matters because foundational skills don’t stand alone; they enable CEOs to develop and demonstrate broader leadership capabilities:

In other words, capabilities such as adaptability, strategic thinking, and change leadership don’t replace these fundamentals—they build on them.

DDI research shows that 83% of HR organizations expect the need for new leadership capabilities to increase significantly over the next five years. Yet major gaps remain between the skills leaders say are critical and the development they receive, including setting strategy, managing change, developing future talent, and decision-making and prioritization.

5 Foundational CEO Leadership Skills

These five skills create the foundation CEOs need to lead themselves, their teams, and their organizations effectively:

1. Self-Awareness

Many CEO leadership skill lists include “authenticity” but not “self-awareness.” The problem with selecting CEOs for authenticity without self-awareness is that authenticity alone says little about whether a leader understands how their behavior affects others.

For example, a CEO who is known for “telling it like it is” can also be seen as not listening and talking over people. Without self-awareness, what feels authentic to the CEO can come across as arrogance, impulsiveness, or disregard for others. Self-aware CEOs:

• Know who they are, including their strengths and limitations.
•  Accept who they are and take ownership of their strengths and limitations.
•  Act to leverage their strengths and improve or better manage their limitations.

When self-awareness leads to authenticity, it encourages leaders to become a better version of themselves. Truly self-aware CEOs:

• Admit they don’t have all the answers, so they seek broad and diverse perspectives and are open to new ideas.
• Surround themselves with talented people and effectively leverage that talent.
• Have confidence in themselves and don’t feel the need to defend who they are.
• Have a stronger learning orientation. They are also more open to feedback and more likely to act on it.

But admitting a weakness isn’t the same as being self-aware. An executive may acknowledge limitations and invite feedback while still rationalizing criticism or defending behavior that needs to change. Real self-awareness shows up in what a leader does with insight.

DDI’s research found that self-reflection is the most common strategy leaders use to manage stress, cited by 74% of leaders.

2. Pausing

Pausing may not sound like a leadership skill. But for CEOs operating under constant pressure, deliberately creating space before responding or acting can be surprisingly difficult and powerful. Deliberately pausing before responding helps CEOs:

• Listen: When CEOs fully listen, they can “hear” both the content and feelings associated with what is being said, and in some cases the agenda or intentions behind the words.
• Respond: Pausing before responding provides time to consider the best response. This increases the chance that the response is thoughtful, targeted, and appropriate for the audience.
• Act rather than react, especially under stress: Under pressure, emotions can drive a premature response. Pausing gives CEOs time to process what they’re hearing and choose how to act rather than simply react.

Successful CEOs also pause to reflect on their actions and others' reactions, building self-awareness so they can keep learning and evolving. For example, CEOs should be asking themselves, “What should I keep doing and why?” And, “What could I have done more or less of, and why would that be more effective?”

This habit matters beyond individual moments of stress. DDI’s research found that self-reflection is the most common strategy leaders use to manage stress, cited by 74% of leaders. It can help leaders turn difficult experiences into opportunities to learn and adjust.

3. Empathy

Empathy is one of the most important relationship skills available to a CEO, or any leader. And as leaders navigate rapid change and AI transformation, its importance is only growing. DDI research shows organizations are 9.1X more likely to succeed with AI when leaders combine change readiness with empathy. Empathy occurs:

• Internally: Linked to listening, it is the ability to understand other people’s perspectives. This includes recognizing how others feel about issues. Empathy enables a CEO to understand the impact of words, changes, or actions from another person’s perspective.
• Externally: The outward expression of empathy acknowledges people’s feelings, concerns, excitement, etc. in a non-judgmental way. It helps others feel recognized and “heard.” It is also a key relationship skill and affects a CEO’s ability to lead, motivate, inspire, build trust, network, and influence others.

That connection to trust is particularly important. DDI’s latest research found that trust in senior leaders remains low, with only 32% of leaders expressing confidence in them. Rebuilding trust requires leaders to listen and respond with genuine empathy, encourage people to speak up, and communicate decisions transparently.

Note that these first three skills (i.e., self-awareness, pausing, and empathy) are foundational to effective emotional intelligence and strong interpersonal leadership.

4. Seeking

Effective CEOs rarely make decisions based on instinct alone. They actively seek the data and perspectives they need to understand a situation, challenge their assumptions, and act. Successful CEOs are always:

• Seeking hard data:  CEOs use relevant “facts and figures” to make decisions and take action. This includes asking questions to clarify context and digging into the details to test accuracy and understand what the data really shows.
• Seeking perspective: To take action on hard data, CEOs seek others’ perspectives. They ask questions to increase understanding and focus solutions by getting to the “why” behind the data. They challenge others to generate ideas and options that address problems and capitalize on opportunities.

CEOs who actively seek out these questions are more likely to keep an open mind. They leverage experience, but don’t narrow their options to past solutions that miss critical differences in the current situation.

Seeking also becomes increasingly important as organizations face unfamiliar challenges. DDI’s latest research points to curiosity as one of the human-centered capabilities leaders need to navigate AI and disruption: continuously learning, questioning assumptions, and exploring new possibilities help leaders remain agile as conditions change.

While 60% of leaders identify decision-making and prioritization as a critical future skill, only 39% say they have received development in it.

5. Decisiveness

Decisiveness is seen as critical in almost every article, study, or blog about CEO or executive leadership skills.  But decisiveness isn’t simply about making decisions quickly. Decisiveness and seeking work together to support timely decision-making and action.

Here are some considerations for CEOs when it comes to making decisions:

• There may be no “right” answer.  To seize opportunities or address underlying issues, CEOs often don’t have time to wait for the “right answer.”  They must decide based on the best available data and perspectives.  Waiting for certainty can stall progress just as surely as making the wrong choice.
• Consensus isn’t always possible. Collaboration helps you gain perspective and build support for an idea.  But CEOs also need to recognize when they've heard enough perspectives, and it is time to make the call. Seeking input should strengthen a decision, not prevent one.

Seeking and decisiveness are two skills foundational to the CEO’s ability to develop strategy, make decisions, and take action. And organizations have significant room to develop this capability. While 60% of leaders identify decision-making and prioritization as a critical future skill, only 39% say they have received development in it.

A Note About Adaptability

Nearly every CEO interviewed across much of the research highlighted adaptability as one of the most critical capabilities for success. But adaptability doesn’t exist in isolation. It comes from having the mindset, skills, knowledge, and experiences needed to respond effectively as circumstances change.

For a CEO to demonstrate adaptability, foundational leadership skills are critical. They enable flexibility and confidence to make decisions. Without them, a CEO will struggle with constantly changing demands, reacting to disruption rather than adapting.

The stakes are high: DDI research shows that when organizations manage change effectively, their leaders are 6.5X more likely to be perceived as high quality.

What Does This Mean for Aspiring CEOs?

Aspiring CEOs may already have strengths in some of these areas while carrying habits that work against others. The goal is to understand both and deliberately build behaviors that support effective leadership at the executive level.

Understanding a leadership skill intellectually is one thing. Demonstrating it consistently, especially under pressure, is much harder. That requires insight, deliberate practice, feedback, and opportunities to apply new behaviors until they become habits.

8 Ways Aspiring CEOs Can Build Their Leadership Skills

Aspiring CEOs can intentionally strengthen these foundational skills in several ways:

1. Take assessments. Assessments help to build self-insight into skills and mindset and identify specific strengths and development gaps. DDI research supports using objective, data-driven assessments to provide leaders with specific, actionable feedback for development.
2. Seek feedback. Consider both formal and informal feedback, not justification, and thank people for it. But most critically, act on it.
3. Reflect on the impact of your words and actions. Pay close attention to how others react and adjust your approach.
4. Conduct project and solution retrospectives.  Identify what worked, what you could do differently, and look for trends.
5. Build your “cabinet” of advisors.  Surround yourself with people you trust to challenge your thinking, “hold up the mirror,” and provide candid insight and guidance.
6.  Replace unproductive habits. When you identify a bad habit tied to one of the foundational skills, identify the behavior you want to use instead, then deliberately practice and reinforce it.
7. Take foundational leadership skills training and apply it.  Set specific development goals and create opportunities to practice new skills on the job.
8. Surround yourself with people who have these foundational skills. Watch what they do, adapt it to your leadership style, and apply what works.

The key is not relying on a single development method. DDI research found that organizations using five or more development approaches are 4.9X more likely to report improved leadership capabilities, reinforcing the value of combining assessment, coaching, learning, practice, and other experiences.

What Does This Mean for Selecting CEOs?

When possible, organizations should build CEO succession strategies that develop strong internal candidates rather than waiting until a transition is imminent.

Growing from within enables organizations, over time, to observe and evaluate potential CEO successors’ typical behavior related to the five foundational CEO leadership skills. Organizations should also conduct objective behavioral and personality assessments to gain an independent perspective and reduce individual bias.

The need for stronger internal pipelines is significant. While 75% of organizations prioritize internal promotion for leadership roles, only 20% of HR leaders say they have successors ready for many or almost all critical leadership positions.

In addition, time and focus create opportunities to develop or improve these skills while showing whether a potential successor is willing and able to address limitations and change their behavior.

If an organization sees no clear internal successors, it should use a robust selection system that includes evaluating the five foundational skills to hire external talent into senior roles. Ideally, bring external successors into senior roles well before the CEO transition, giving the organization time to observe their behavior, evaluate fit, and support development.

As with internal CEO candidates, this gives you the opportunity to observe and evaluate external hires’ behavior and their willingness to develop or improve their skills. Keep in mind: But even with more time to evaluate external candidates, past performance shouldn’t be the only consideration. Organizations also need to ensure candidates have the foundational leadership skills and broader capabilities needed to lead their organization, fit its culture, align with it, and navigate the challenges ahead.

Ultimately, CEO selection shouldn’t focus only on what a candidate has accomplished. It should also consider how they lead, how they respond under pressure, and whether they can keep growing as the role's demands change.