Managing employees does not automatically make one a leader. Effective leadership requires a set of four skills that must be honed, according to Kausik Rajgopal, PayPal’s executive vice president of people and sourcing: perspective, motivation, planning, and renewal. 

Developing good leaders, however a company chooses to define it, rests on HR heads who commonly invest thousands of dollars annually in leadership development training—and for good reason. Successful leaders enhance value creation, boost employee engagement, form more collaborative teams, and see increased employee morale and retention.

Rajgopal spoke with Fortune about the must-have leadership traits execs should exhibit and the business impact amid a shifting talent landscape.

This interview has been edited and condensed for clarity.

Fortune: You said in 2015 that leaders must adhere to four principles. How has your view on leadership changed since taking on the role of CPO? 

I would add some elements that are more rooted in what leaders stand for: authenticity, empathy, courage, and resilience. Those four things have become more important in the last several years. 

The world is now so transparent, and news is so immediate within a company and externally that if a leader is not authentic, people immediately pick up on that. In this era, leaders must be clear about who they are. 

Coming through COVID, empathy has become even more important. People are going through incredible challenges—COVID, existential challenges, health challenges. We are increasingly seeing and investing in support for mental health and wellness in the workplace. 

One of my favorite poets is Maya Angelou, and she famously said that in the long run, people will forget what you said, people will forget what you did, but people will never forget how you made them feel. There is a bigger premium on leaders on not just what they do but how they do it and how they make people feel in the process. The capacity to stand in somebody else’s shoes, which we all commonly think of as empathy, is increasingly important.

How would you describe the other two elements?

Courage is the ability to recognize that you have to think about challenges, make tough decisions, and do the right thing. I don’t think of it as opposed to empathy. You can be empathetic and still figure out the right thing to do and have the courage to communicate it. Great leaders have the integrity to hold both things at the same time. 

The final thing is resilience. Burnout is actually higher among leaders than among employees broadly because leaders take on a lot of challenges. It’s important for leaders to invest in themselves, find the time to reflect, and do things that enable them to live a full life. One tangible expression of how we live our values at PayPal is through a companywide wellness day—we had one last Friday.

How are you thinking about succession at PayPal and scouting future leaders?

Ultimately, great companies don’t just have managers or leaders, they have stewards. Stewards are people who recognize that their time will end and others will carry the baton, so they build processes and systems with enduring impact. 

We’ve invested in a companywide coaching platform for our directors, senior directors, and senior leaders. There was a lot of bespoke coaching previously that didn’t necessarily map back to our leadership principles and how we think about developing leaders, so we’ve partnered with a third-party firm that will consistently manage and support leaders. We’re rolling that out this year. 

We’re also investing in our college graduate recruiting and internship program. We’re one of the few tech companies this year that did not announce a hiring freeze. We’re not overhiring, but we feel it’s important to continue to be able to attract talent, so we’ve actually doubled the size of our internship program.

The third focus area is diversity and inclusion. Our overall aspiration is for our company to look more like the customers and communities we serve. 

How will you lead these ambitious talent goals in light of an oncoming recession?

Recessions come and go, but I think the best companies are built and strengthened during downturns. We’re not any less focused on getting the right talent. Our university hiring team and our diversity recruiting team are integrated.

Amber Burton
amber.burton@fortune.com
@amberbburton

Reporter's Notebook

The most compelling data, quotes, and insights from the field.

Yesterday’s CPI report for October showed consumer prices rose 7.7% from a year earlier, slowing much more than economists expected. Cooling inflation offered hope that Federal Reserve officials will now decelerate steep interest-rate hikes. But the battle against inflation remains far from over. Additional Labor Department data released Thursday revealed only a slight increase in unemployment claims last week, indicating a still-tight job market.

Read some of the corporate reactions here.

Around the Table

- Employees laid off from social media companies are using those same platforms to commiserate about losing their jobs. New York Times

- Amazon CEO Andy Jassy is personally leading a cost-cutting review at the company and closely scrutinizing its 10,000-employee devices department. Wall Street Journal

- KFC apologized after customers in Germany received a promotional message for Kristallnacht, the night of anti-Jewish violence that is widely considered the start of the Holocaust. BBC

Watercooler

Everything you need to know from Fortune. 

Get back here. New Twitter owner Elon Musk announced the end of remote work in a companywide email. Employees are now expected to work a minimum of 40 hours a week in the office. —Kurt Wagner 

That was quick. The CEO of Keurig Dr. Pepper resigned only four months into the job after an undisclosed code of conduct violation. —John J. Edwards

Hard work pays off. Gen Z is working harder than any other generation to secure its financial future, according to a LinkedIn survey. —Megan Leonhardt