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Top 11 management skills you need to advance as a business leader

5 July 2022

Managing people is a critical part of any leader’s role. However, managing people is challenging, and many employees are adversely affected by poor management practices. Three in every ten Australian employees dislike their boss, and many more end up resigning due to a lack of respect from those above them.

While no one correct way to manage employees exists, a broad set of management skills are required to succeed as a leader and manager of people. Most people possess at least some of these capabilities on a basic level. However, to consistently lead and support their employees, managers need advanced skills.

Man sitting on couch with laptop open

What are management skills?

Management skills are difficult to define, as they incorporate a whole range of behaviours. Broadly, management skills are the attributes and abilities required to effectively manage people, tasks and problems within an organisation and, importantly, to avoid crisis situations.

Most organisations are hierarchies, and for this reason, once individuals reach management level, they’re likely responsible for not only managing their own tasks but also managing their team’s tasks. Managers are responsible for various functions, including the following:

  • Identifying skill gaps in their team
  • Hiring new staff to fill these gaps or available roles
  • Providing training
  • Coaching, developing and mentoring team members
  • Managing performance, including participating in performance reviews and helping team members manage issues
  • Making important decisions and supporting problem-solving
  • Managing up (for example, communicating effectively with supervisors
  • Translating corporate goals into a vision and mission for their team
  • Managing budgets and finances
  • Reporting
  • Planning and goal setting

To successfully execute these functions, managers need a broad range of skills. Typically, managerial skills come into play on the operational side of the business. Specifically, they apply to effectively and profitably managing the smooth functioning of businesses and teams. Leadership, on the other hand, focuses on the future, with the aim of inspiring and motivating people, and creating a vision and mission that employees believe in.

Warren Bennis, in his book On Becoming a Leader, best articulates this difference between managing and leading in business: “The manager has his or her eye always on the bottom line; the leader’s eye is on the horizon.”

Why effective management matters in business

Effective management in a business setting is key to the success of any organisation. Why this matters can be split into three core areas: communication, setting a strategic direction and motivating employees.


When doing business, communication is paramount. Communication enables managers to share their overarching vision and general day-to-day goals with employees. It’s the channel through which managers share what they expect from their employees.

Managers with good communication skills can also use that expertise to help employees understand their individual roles and their own worth as part of the larger organisation. Managers who clearly communicate to each employee a sense of their value to the company can be motivational leaders in their organisation.

Setting a strategic direction

Setting a strategic direction is another important reason why effective management matters in business. The role of a manager is twofold: managing up and managing down. The term “managing up” refers to doing what’s required to work best with management above you. By doing so, managers learn more about the strategic direction of the company and what their role in it is. They translate this understanding to their team.

All organisations have a strategic direction. A manager needs to understand this direction and communicate it to the team, making it as meaningful and realistic as possible.

Motivating employees

The final reason why effective management matters in a business setting (and why the role of managers and management skills is so important) is that, ultimately, managers play a key role in inspiring and supporting employee morale. Since the pandemic, more is expected of managers than ever before. According to the Harvard Business Review employees now expect managers to be part of their support system to not only improve their employee experience but also to improve their life experience overall.

An essential skill for managers in an organisation is to help motivate employees, and this is one of the most important reasons why effective management matters so much.

Three categories of managerial skills

Managers today need a multitude of management skills to help employees rise to their potential. These skills can be divided into three categories: technical, conceptual and human.

Technical skills

Technical skills are a key component of managerial skills. In a nutshell, technical skills are practical skills that when applied properly, enable managers to achieve their responsibilities. For example, technical skills for an engineer may include the ability to use systems, interpret statistics, use various programming languages, manage processes and use data modelling.

Technical skills may also include understanding how to use people management software.

Why are technical skills an important management skill for all managers? Because managers typically manage employees with technical skills and need to be up to speed on the issues employees face, as well as make decisions on when and how to best support tech initiatives. Also, managers who have technical skills that are on an equal footing to those of their employees give their team the sense that their manager can relate to, and understand the nature of, the technical aspects of their work.

Conceptual skills

Another crucial management skills category is conceptual skills. Managers are key problem solvers in organisations, so they need conceptual skills for abstract thinking, problem-solving, deciding how teams best work together and understanding how to get the most out of individuals. Conceptual skills include strategic thinking, decision-making, analysing and negotiating.

Conceptual skills help managers think broadly about outcomes; for example, they consider how their decisions and actions in response to an issue can have consequences for the entire organisation, not merely how they impact their own team. Conceptual skills help managers analyse problems, find creative solutions, and effectively predict and prevent future problems.

Human skills

The final category of managerial skills is human skills. Human skills, otherwise known as interpersonal or soft skills, are essential when it comes to managing people and teams. Human skills include the ability to feel concerned for others, collaborate effectively with people, communicate clearly and resolve conflict appropriately.

Human skills are essential for managers. This category empowers managers to motivate and inspire others and ultimately help the people in their team reach their full potential and achieve their goals.

Portrait of two businesswomen having a meeting together in an office

Six soft skills of managers

Human skills can be further broken down into soft skills. These skills enable managers to perform the people-related tasks of their job, for example, leading and motivating their team. We explore six examples of business soft skills below.

1. Active listening

Active listening means being completely focused on what a speaker is saying, as well as thoughtfully considering the speaker’s message and truly understanding it. Active listening differs to passive listening, in which someone listens to a message but doesn’t retain it. When managers are actively listening, they’re showing that they highly value what someone else is saying and that they will later recall that information and decide whether to act on it.

Managers who are successful at active listening use verbal and nonverbal techniques to demonstrate that they’re listening and paying attention. These techniques include looking the speaker in the eye and not interrupting. Active listening also involves thinking about what the speaker’s saying, instead of focusing on other things, such as what the manager might say next.

2. Emotional intelligence

Another essential business soft skill is emotional intelligence. Emotional intelligence, otherwise known as emotional quotient (EQ), is managers’ ability to successfully identify emotions in others, as well as manage their own emotions. Emotional intelligence is a critical management skill; it enables managers to understand what drives others and how they can help them overcome challenges. It also helps in resolving conflicts, and it can help avoid workplace stress.

Managers with high emotional intelligence tend to be more successful because they typically develop strong personal relationships with their team, understanding how to best manage team members and get the best out of them and limiting conflict.

3. Mentoring

All managers need the essential business soft skill of mentoring others well. Managers who serve as mentors give employees professional guidance. Throughout the mentoring process, the managers can pass along tools, tips and training. Mentors also act as a support system if the employees they’re mentoring experience any problems or issues.

The mentor relationship between employees and managers can be formal or informal. Because mentors pass on relevant and timely information, mentoring usually involves regular meetings, with the managers helping the employees meet their potential by offering them opportunities, as well as advice and encouragement.

4. Being a role model

An important management skill that’s often not discussed as much as it should be is a manager’s ability to be a positive role model for employees. Managers who are good role models are much more likely to inspire employee cooperation, encourage adaptability and reinforce community in their organisation.

A role model is someone an employee looks up to and tries to emulate. For this reason, if managers are good role models, employees will more likely display best practice professional and leadership behaviours and also try to constantly better themselves.

Managers who are good role models are typically accountable for their actions, positive, persistent and act with integrity and respect.

5. Being outcome-focused

Outcomes are the changes that occur as a result of actions. For this reason, being outcome-focused is an essential business soft skill for managers.

To be outcome-focused, a manager must understand what’s required of the team and must be able to make a plan to ensure that outcome is achieved. For example, a manager may need to interpret a strategic plan, and then translate it into work for everyone in the team, strategising to meet benchmark goals. A focus on outcomes helps managers constantly improve the performance of their team, and ensure that they gain insight from what’s working and what isn’t.

6. Being trustworthy

In business, trust is one of the most important imperatives of all. This is because without trust, it’s difficult for managers to inspire their team and achieve results.

The essential business soft skill of trust empowers managers to execute change within a business. To execute any change, employees must have confidence in the information and guidance they’re receiving from their managers. This can be particularly important if the company structure is changing. A manager can build trust through clear communication and by being an effective role model.

Five examples of management skills in action

To be successful, managers need to not only acquire certain skills but also apply these skills in the workplace. Consider the following five examples of management skills and how these management skills may be applied.

1. Decision-making

Every day, managers have to make decisions, some big, some small, some without consequences and some with very big consequences. Decision-making isn’t always easy, especially when it can affect people within a manager’s team—or indeed even the manager’s own role and career.

An example of an important decision that a manager may have to make at a time when a company is restructuring is who on the team may need to be let go. To make this decision, the manager will need to weigh up everyone’s roles and responsibilities, and which role may not need to be completed or what may be able to be completed by other people. A manager should always make important decisions such as these in consultation with more senior management, as well as human resources.

2. Delegating

An essential management skill for all managers is delegation. This skill is essential firstly because managers can’t possibly complete all the work themselves, and secondly because they can give employees within their team opportunities to learn and grow.

For example, a manager may be training an employee to take a leadership role in the near future. To provide this critical training, the manager may start allocating some parts of the manager’s role, for example, providing skills training, recruiting staff or leading key projects to an employee. In delegating these management responsibilities, the manager will provide effective training for an employee who may soon step into the role.

3. Problem-solving

Problem-solving is another important management skill. This skill is vital because no organisation is without its problems. Managers have to do problem-solving almost daily, so it’s critical they develop this skill.

An example of a problem that a manager may need to solve is an employee who’s suddenly not performing well. Typically, an employee who isn’t performing well will receive performance warnings, followed by termination if the employee doesn’t improve. However, suppose the employee has previously been a good performer. In that case, a manager may need to problem-solve the situation by understanding from the employee and the surrounding team what may have caused a change in their behaviour.

Problem-solving as a manager is all about looking beyond the surface issues and digging deeper to find and solve the root causes of problems.

4. Risk management

No job in any organisation comes without an element of risk. For this reason, risk management is an essential management skill.

Risk management involves identifying, evaluating, prioritising and mitigating risks for managers. Once risks are identified, managers must work to minimise their impact and control the probability that they’ll occur, while also giving their employees and the business ample room to realise opportunities still and succeed.

For example, a manager may need to allow an employee to work from home. This decision may involve some risk; for example, the employee may not be as productive, and may not be mentored or monitored as effectively. However, the manager needs to weigh up those risks against the possibility that the employee may be even more engaged and productive at home and that the employee will be happier due to choosing the way to work.

5. Coaching

The final important management skill for managers is coaching. When managers coach employees, they guide them on their goals and help them create a plan (and acquire the skills) to achieve their goals. Coaching is different from mentoring, as mentoring is more about sharing experience, while coaching is targeted towards achieving certain goals and is one-directional.

Consider this example of coaching in action: An employee from a different department moves into a manager’s team. The manager may coach the employee on the skills required to succeed in the new role and help the employee gain these skills. The manager may also coach the employee on working in the new team setting.

Further resources

To discover more about the skills required to advance as a business leader, please see:

What is really needed to advance as a business leader?

In today’s complex and ever-changing business world, professionals need an array of management skills to succeed as leaders. Managers must wield a combination of technical, conceptual and human skills to meet business challenges large and small.

In summary, ‘manager’ isn’t merely a title. Being an effective manager and leader is a calling. It’s an achievement that people in positions of power should always be aspiring to and working towards, and becoming an expert manager is a career-long endeavour well worth the effort. Learn more with SCU Online's MBA.