Tell us why you would be a good leader
Typical interview question, they are hoping that you will say certain things they are looking for... but what those are will be different from case to case. So instead of trying to guess what they want to hear, just tell them what you are good at.
Basically leadership boils down to two broad categories: people skills and organisational skills. Focus on those.
Are you good at listening, or to enthusiast, or to solve conflicts, dealing with troublesome employees etc? Are you good at managing project schedules, writing specifications, keeping track of what everyone is doing and what they should be doing next? "Risk assessment" is a proper buzzword, but this is always something you do with experience. What can go wrong in this project, what are the uncertainties, do we need to add margins before setting a deadline etc.
And so on - you'd naturally have to adapt this to reflect whatever you are doing, more specifically. For example, a HR manager and a technical project manager would put emphasis on quite different things.
Bragging will usually not do much good, though this is a bit cultural. Always be honest - it makes you come across as a serious candidate.
Explain a time you helped drive an organizational change
Generally, you would make examples of past events or projects you were involved in that went well. Explain your role, the aim of the project, how it progressed and the end result. This can be done without dragging in anything subjective, just tell it like it was.
In this case it seems they are looking for some change of routines. So it's just about coming up with a good anecdote of a point when you identified some sort of problem, then pushed for a change in routines, then describe the new routines and how they solved the problem.