Exodus 18:19-20 ASV, Exodus 18:21 ASV and Exodus 18:22 ASV

There are two odd things about this passage in the midst of Exodus. The first is that Moses sends Zipporah and his children away. Why? The text does not tell us. They do not appear to have a strained relationship (they speak when they come to visit with Jethro). Perhaps Moses realizes he will not have time for a family in his position of leadership. It is rather interesting anyway that Moses apparently has children so late in life with Zipporah; he is 80 when he returns to Egypt, but Gershom is still young, and based on his name-meaning, Eleazer is not born until after the deliverance of the people!
Anyway, the second odd thing is that the advice comes from Jethro. Every other teaching in Exodus comes directly from God to Moses. But the system of judges comes from Jethro, who has been a priest of some sort, but only after the deliverance becomes convinced that "God is greater than all the other gods" and offers sacrifice to Him. Does this mean the judge system has less weight than the other commands that are divinely revealed? Perhaps we are to take it that God does not intend to give a divinely ordered system of government.
In any case, all evidence in the text is that we are to consider Jethro correct in the advice he gives to Moses, and thus as leaders if we are to be wise we ought also to follow his counsel.
And that counsel first and foremost is, you can't lead alone. Leadership is weight, and no one can carry all of it. It has to be shared, or it wears the leader out. Jethro is keenly aware of the finite supply of human energy, and a leader's responsibility to manage that energy, for his own sake and for that of the people.
Second, Jethro's advice deals with focus. If the leader spends all day administering trivia, not only will he sap his energy he will also divide his focus from what is most important. "You need to be the people's representative to God," Jethro says. The people are bringing their individual cases against one another to Moses; who is bringing the collective case of the people to God? Who is pleading for them and interceding for them? This is the first call of the leader: to pray for the people, and advocate for them before God.
The second call of the leader is to teach. Moses has been teaching the people God's rules through one-on-one counseling sessions: "I judge between a man and his neighbor and make known the statutes of God and His laws." Jethro's advice is to work more broadly. Teach all the people "the statutes and laws," and then he adds two other things: "make known to them the way in which they are to walk and the work they are to do." This appears to be more than an unpacked definition of statutes and laws. It seems to me to say, don't just tell them the rules: give them a vision for the right kind of life. Not just the boundaries they can't cross, but the centerline they should be aiming for. This is also very practical: how we walk and how we work. Discipleship and ministry. It covers all aspects of day to day life. Moses, he says, teach the people how to live their lives and do their work, and you won't have so many disputes to judge. Unaligned people bump into each other more often.
Notice how similar this is to the experience of the apostles that led to the appointment of deacons. Disputes were arising between the people. The apostles were trying to take care of it themselves. They realized they needed help, not only to get the job done but more importantly so they could focus on two things: prayer and teaching. Just like Moses.
The solution is a system of men. The men are given no technical qualifications. They don't have to have previous experience as leaders, or be heads of households. Instead, the qualifications revolve around character and motivation. There are three: 1. Fear God. 2. Men of truth. 3. Hate dishonest gain. Again, this could be a distilled version of the list of qualifications given first in Acts and then again in I Timothy and Titus of the characteristics of an elder or a deacon. Very early in the cycle for both Israel and the Church, the time comes to move leadership beyond the annointed leaders who speak directly for God to a larger circle of men of good character who can bear a portion of the administrative responsibility.
These men are not already in place. As stated, they are not automatically the heads of tribes and clans. Moses must "select able men." Timothy is sent to select and ordain elders and deacons. Leaders must actively begin to look around and say, who can I bring onto my team? Who can I recruit to lead with me? Who has a heart for God, is known for being consistently truthful, and can't stand to get something dishonestly? Who has a passion for justice? Put them in charge. Empower them with a system for dealing with low level issues directly, and referring more complex issues up the chain as necessary. Then give yourself completely to the work of prayer and teaching.
By the way, this is Jesus' plan for ruling the earth. Scriptures foretells that he will judge the nations. But he teaches his disciples that they will judge cities, a certain number apiece depending on their ability. Paul confirms to the Corinthians that believers will judge the whole earth, so they ought to be able to judge among themselves. It's an exciting but also sobering thought: we will be on Jesus' leadership team to administrate his kingdom across the whole planet.