Abstract. The importance of leadership capability (LC)and knowledge management (KM) are well recognised in the popular and academic press to achieve competitive advantage. Although organisations are applying many skills and practices to address the problems for the achievement of competitive advantage, but unable to focus on the measurement and relationship aspects of LC and KM. Many organisations are succeeding and achieving their goals and targets generally with their human resource skills, and particularly with LC and KM. But there are no methodologies for their measurement aspects to plan for the required human resource with necessary competencies as per the desired organisational goals.A research is carried out to develop a methodology for the measurement and relationship aspects of the LC and KM. As the main purpose of this paper is to investigate a relationship between LC and KM, a research study is carried out in: (i) development of process models for LC and KM, (ii) developed an instrument for measuring the LC and KM efforts and (iii) investigated for the relationship between LC and KM.Based on the survey of 247 managers in the three major public sector undertakings, the LC and KM skills have been measured, and analysed for their relationship. The analysed data interprets that there is a positive correlation relationship between the LC and KM. Finally, this research limitations and implications have been examined.

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