This paper examines personal challenges that academic leaders face, attributes that institutional leaders should possess to succeed in transforming the university, how institutions of higher education can build the capacity for preparing new leaders, and how universities can respond to the leadership crisis in this time of transformation. Personal challenges academic leaders face include the need for leadership training, lack of administrative experience, role conflict and ambiguity, and lack of recognition of metamorphic changes and of the cost to scholarship of leadership. For many academic leaders, work becomes their entire life. Research shows that academic leaders must manage trade-offs between professional and personal pressures in their lives, though it can be difficult to manage such trade-offs and find balance. The main feature people look for and admire in their leaders is credibility. Six key roles of academic leaders are faculty developer, manager, leader, scholar, boundary spanner, and problem developer. Leadership talent on the global scene is scarce, and the need for effective leadership to transform universities is great. Possible agenda focuses for building leadership capacity include studying leadership skills, attributes, and roles critical to effective reform and creating case studies on institutional successes and failures. (Contains 23 references.) (SM)