This is a time of significant change in the utility industry. Many articles and presentations have discussed the challenges that the industry faces, issues such as regulatory constraints, budget limitations, privatization, and employee issues, to name just a few. Overcoming these challenges will require significant leadership. Yet many of those responsible for overcoming these challenges, while they may be very talented managers, often lack the leadership skills to move their organizations through the minefield they are facing. What leadership training they may have had was founded more in a time of stability. These skills may not be suited for today's rapidly changing, transformational environment. TAP Resource Development Group conducted a study of 36 water and wastewater utility managers who participated in a 360-degree leadership assessment process. The study looked at data from the leaders' self-assessment and the assessments of their direct reports. This paper discusses the results of this study which present a number of significant conclusions. The paper also discusses the development of a performance management system and the six steps involved in its design, development, and implementation. Includes 3 references, figures.