A strongly defined sense of purpose: The hallmark of an effective leader is clear focus and direction coupled with the ability to articulate his/her purpose to outsiders and employees. Successful leaders operate with a vision of where they're going, and they use this vision to inspire their people and their organization. This clear vision and focused direction allows leaders to align and direct the energy and resources of the organization to achieve desired results.

People skills: Leaders must have the capacity to motivate and inspire, to bring out the best in people, even in hard times. Employees' responsibilities vary in terms of complexity and breadth. However, an effective leader conveys the attitude that everyone plays a critical role in the success of the business regardless of what official job title they have.

Business literacy: A leader must know and have a real feel for the business. Leaders must know how to process large quantities of conflicting information and be able to get ahead of the competition by defining what must be done. He or she has to know how to track the company's key financial issues and communicate their importance to others.

Candor: The leader needs candor. That's tough because most organizational studies show that seven out of ten people in organizations don't speak up if they think their point of view will vary with conventional wisdom or their boss's point of view, even if they believe their boss is going to make an error. What the leader needs to cultivate are firm-minded co-workers with the wisdom and courage to say no.

High standards of ethics and integrity: The core competency of leadership is character. As Warren Bennis said in his classic book On Becoming a Leader: "Get a leader with only drive but not competency and integrity, and you get a demagogue. Get someone with competence but absent integrity and drive, and you get a technocrat. Get seduced by someone who has ambition and competence but lacks integrity, and you get a destructive achiever."

Judgment: Leaders must have the ability to make quick decisions with imperfect data. They need to objectively and realistically analyze a problem or situation, which is an important first step in making sound decisions. It has been said many times but it bears repeating: It is not enough for a leader to do things right; a leader must do the right thing.

Select, coach, and develop others: Leaders must have the ability to select the right people, not clones of themselves but people who can make up for their deficiencies. Remember, one of the most important roles of leaders is to generate more leadership within the organization.

Champion and embrace change:  Companies stagnate if they don't change to embrace new technologies, meet market demands, respond to employee needs, or create new business opportunities. Effective leaders seek out, initiate, support, and manage needed change; they are "change champions." They see opportunities for improvement and motivate their staff to seek and implement productive changes.

Constancy: One of the things you hear about least effective leaders is that they do whatever the last person they talked to recommended. Or that they plunge ahead with the last good idea that pops into their heads. To trust a leader, followers have to know what to expect. So sometimes the leader has to put off a grand idea until he or she has had a chance to convince his/her own allies. In business, the effectiveness of a decision is the quality of the decision multiplied by the acceptance.