Why is Leadership Important? 6 Reasons You Need to Know
A leader is more than 'someone who has followers'. We explore what does make a leader and why leadership is important.
What is leadership?
Leadership is about much more than top-down policy making. It flows throughout organizations and can make or break your company. We all know leadership - good or bad - when we experience it. But what exactly is it? Is a leader simply, ‘someone who has followers’ as management maven Peter Drucker succinctly suggested, or is it something more complicated?
There are as many different ideas of what a leader is as there types of leadership. But fundamentally, leaders create a vision and then enlist people to help them realize it. As leadership expert WCH Prentice said: “Leadership is the accomplishment of a goal through the direction of human assistants.”
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Leaders do this through a mixture of motivation, influence, business communication and support. As Warren Bennis puts it, "Leaders are people who believe so passionately, that they can seduce other people into sharing their dream.” But whether it's through inspirational or standard tactics, a leader has to have the ability to move their people and their organization forward to a common goal.
Leaders will also use their skills to steer organizations through times of change - something of particular importance as companies move to embed hybrid ways of working in the wake of the pandemic.
Who are the leaders?
While leadership is often associated with C-suite job titles, it’s not so much about someone’s role as their attitude and behavior.
We’ve all seen examples of top-tier managers who do useful work very efficiently but don’t lead in any meaningful sense. They keep things running smoothly but don’t motivate or inspire. At the same time, there may be people in the lower levels of an organization who inspire their teammates and marshall them to achieve company aims. Organizations recognize this, with 83% believing it’s essential to develop leaders at all levels in a company.
This constant focus on company aims can set organizational leaders apart from community leaders and politicians. Successful organizational leadership isn’t something abstract. People will ultimately judge leadership on the organization's performance in terms of employee engagement, productivity and profit.
As we’ll see, there’s more than one ‘right’ way to do leadership. What works for one organization and in one situation might not work for others. But effective leadership of whatever shape or scope is crucial, and without the direction that leaders give, companies can sink fast. So every organization should know what good leadership looks like for them.
The importance of leadership
Leaders matter: they inspire people, motivate them to perform to a higher level, and embody company values and culture. Effective leadership will:
There’s a strong relationship between leadership and employee morale, especially in times of change. A study carried out at the University of South Africa showed leaders who kept staff informed, set a clear vision, showed they were caring and were open and honest were associated with high satisfaction levels. They also reduced people’s intentions to leave the college.
Trust in leaders is one of the top factors cited in helping improve employee engagement. According to Gallup, employees supervised by highly engaged leadership teams are 39% more likely to be engaged themselves.
Building trusting relationships between leaders and teams doesn’t just benefit that leader. It helps create a culture of openness and trust throughout the organization. Currently, CEO leaders and businesses are enjoying higher levels of trust than their politician counterparts - something organizations need to capitalize on.
Influential leaders inspire people to feel confident in their abilities and their work. This has the knock-on effects of improved productivity and better quality products and services.
Create a positive organizational culture
Leaders are key conduits of organizational culture , both creating and sharing the feeling of what it’s like to work for your particular organization. Leaders set the tone, both for the overall organization and their teams.
Innovation involves change, which isn’t always easy. Effective leadership is essential to steer employees smoothly through the process - as McKinsey puts it, to "encourage employees to win over hearts and minds."
4 signs of bad leadership
While great leadership can have a great effect on an organization, poor leadership can be hugely damaging. Here are 4 signs of bad leadership:
If people feel unappreciated or even bullied, it will impact their wellness as well as their productivity. Plus, it will make them more likely to quit.
High employee turnover
Nearly half of the people questioned in a survey by Udemy said they’d quit a job because of a bad manager. Considering it costs the average US company $4,000 to hire a new employee, poor leadership can prove very expensive.
Productivity and performance are often the measures of a company’s success. According to one study, people led by uninspiring leaders have a 93% chance of being rated in the bottom 10% on productivity.
Unmanageable ‘unofficial’ leaders
When leaders are weak, authoritarian or aloof, other people will step in to fill the gap. These ‘unofficial’ leaders are often popular but won’t necessarily sign up to the organization’s values or be critical and negative. Letting this negativity get a foothold in the organization can accelerate the growth of toxic workplace culture.
Toxic workplace culture
Leaders who bully or have favorites can contribute to a negative culture, making coming to work an unpleasant experience. This can lead to high staff turnover and poor service, eventually impairing the performance of the whole company.
Management vs Leadership
We often see leaders and managers as synonymous - but they’re not. Leaders don’t have to be managers. And while there’s an element of leadership in management, it’s not its primary focus. But the roles are often linked and they’re both essential.
Both managers and leaders work towards organizational goals. But while leaders create a vision for what they want to happen and inspire people to achieve it, managers are more focused on the nuts and bolts of how to get there. They’ll be the people in charge of processes and helping the company achieve its aims through everyday activities and behaviors. Leaders, on the other hand, will be in charge of influencing and enthusing others.
Some people frame it as management being more of a science and leadership more of an art. Let’s take a closer look at some of the differences between managers and leaders.
Authority based on qualities
Focused on vision
Operates relatively independently
Focused on innovation
Mainly about the big picture
Authority based on position
Focused on processes
Operates within organization
Focused on structure
Mainly about the details
So, the two roles work together. While the leader goes about innovating and inspiring, the manager has to focus on turning their vision into reality. And while the leader’s determination to focus on overall goals may make them unaware or insensitive to difficulties, it’s up to managers to identify these and find ways of overcoming them.
For managers to be successful, they usually need to have some of the qualities associated with leadership - to at least motivate people to get behind the leader’s vision. But, while you can often find leaders in the higher levels of organizations, they don’t necessarily have any management involvement.
What are the key leadership qualities?
Leaders are seen as having certain characteristics - and there’s lots of debate as to whether these are natural or can be learned. HR organization, the CIPD, talks about an integral element of leadership being ‘the skilful expression of personal qualities’. So what are these essential personal ingredients of leadership?
The importance of moral and ethical leadership came to the fore after the financial crisis and is under the spotlight again during the coronavirus pandemic. People see leaders as moral touchstones. So it’s crucial, particularly in turbulent times, they demonstrate the right or appropriate actions to take - and they do so consistently.
The social intelligence needed to intuit, understand and react to what others feel is seen as an essential quality of leadership. It’s also something people look for in their leaders. Ninety-six percent of people taking part in a Harvard Business Review survey said it was important for their employers to show empathy.
Effective leaders have to inspire and motivate - and that depends on being able to get messages across to people at all levels of an organization. This is why great leadership communication is so important.
Great leaders don’t rely on ordering people to do things. They make people follow them willingly. That means using emotional intelligence to influence and persuade.
The buck stops with the leader. They have to be assertive and have the confidence to decide which way to jump. And they must be willing to take full responsibility for it.
A leader has to see beyond the everyday to explore what could be possible. To do this, they need a sound knowledge of their organization, the landscape it’s in, and the ability to imagine overcoming barriers.
Can you learn these leadership skills? While some - like integrity - may be more innate than others, education, training, coaching, and experience can help people develop leadership qualities.
Take communication skills. Learning to be a better presenter will give you confidence that will flow into other areas like decision-making. And learning to be a better listener using active listening techniques creates a space for empathy to grow.
So while not everyone is a natural leader, many people have the potential to be one - it’s just a matter of tapping into it.
How do you get team leadership right?
There are a couple of ways of looking at team leadership. In the more traditional model, one person is the designated leader. They will need to be a robust and confident communicator, who knows when and how to delegate. They’ll also need good interpersonal skills, including the ability to praise - and constructively criticize - to get the most from their team.
New team leadership theory sees it somewhat differently. In this model, there is no individual team leader. Instead, each member of the team leads depending on the situation and their area of knowledge. This means there’s no set hierarchy and each member’s contributions are equally important, with everyone’s performance contributing to the team's success..
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What are the different types of leadership?
Read on for an introduction to some of the most common leadership styles, when they’re the right fit, and their advantages and disadvantages.
Transformational leaders are continually looking to change an organization’s habits and processes. They study everyday tasks down to the smallest details to make them more efficient.
Pros: Transformational leaders are well suited to businesses that have lost their competitive edge or companies hoping to grow
Cons: Some transformational leaders can push their staff too hard as they focus on efficiency. When people put new ways of working into place, employees may feel overlooked or overworked
Collaborative leaders strongly believe in working with others. Whether it’s breaking down silos in their organizations, overseas partnerships, or collaborating with specialists in a completely different field, they see value in sharing knowledge.
Pros: Collaborative thinkers are particularly useful in businesses with many departments or those operating in different corners of the globe. Businesses who are struggling to break into new markets can also benefit from their approach
Cons: Collaborative styles might not work well when an organization needs to make a quick decision
Servant leaders believe in people first. By making employees fulfilled in their personal and professional lives, they believe positive results will soon follow. Their caring nature makes them skilled communicators too.
Pros: Servant leaders fit perfectly in non-profit organizations and charities. Their nurturing approach means they work well in businesses that pride themselves on developing their employees too
Cons: Over-committed servants on the other hand, may lose focus on company goals and struggle to make tough decisions. Their strong sense of commitment can also lead to burnout
A democratic leader considers the whole team’s opinion when running an organization. They put the big questions to their staff to help understand their preferences before making a final decision.
Pros: This approach helps engage people by allowing everyone to get involved. It also helps motivate people to do what you want
Cons: Organizations could find it more difficult to make unpopular but necessary decisions. Reaching a solution can also be a long process. Frequent delays might undermine a manager’s leadership impact in the long term
Charismatic leaders use their enthusiasm and social skills to create a shared sense of purpose with their employees. These compelling characters bridge the gap between managers and lower-level staff by being empathetic to others and committed in their role while keeping a positive mindset.
Pros: These leaders are the perfect choice for companies looking to rebuild a damaged reputation. Through their commitment and passion, they can boost the integrity of a business and motivate others
Cons: Like servant leaders, charismatic leaders can sometimes struggle to make tough but necessary decisions
Situational leaders are the most adaptable of them all. Rather than using one leadership style, they’re capable of being authority figures, innovators and charismatic leaders at any given time. They’re just as comfortable managing a struggling business as they are growing an organization.
Pros: The versatile leader’s greatest strength is their ability to assess a situation and act appropriately. Their emotional intelligence means they know when to adapt their approach for best results, making ideal leaders for any business – all pros and no cons...
5 tips for becoming a better leader
Leadership doesn’t always come naturally. Even the most capable leaders need to keep an eye on their performance to stay on top of their game. Here are a few tips to help you improve your skills.
1. Identify your weak points
Start by looking at your leadership style. Ask yourself: ‘Do I let team members make their own decisions? How do I respond to company failures?’ Once you recognize your weak points, you can start to look at how to do better.
If you ask for feedback from your employees, you can help create an honest and open company culture. Frequently reviewing your performance will prevent old habits from creeping back into your work.
2. Set goals
Setting goals is the perfect way to stay focused. You’ll need to think long-term and short-term so that you can keep momentum, and you should cover individual and company-wide targets too.
You’ll also need to set a time to review. There’s no harm in tweaking objectives to make goals more achievable or setting a good example, and raising ambitions if things are going well.
3. Improve your communication skills
It’s vital that you understand your team and that your team understands you. This starts with leaders taking a genuine interest in their employee’s point of view. You’ll need to listen carefully and deliver on any promises you make to build a sense of trust that will benefit future conversations.
Team members need to feel that their leaders are approachable. Keep your visibility high by encouraging your team to contact you in a way that suits them, whether in chat, by phone or by video call.
4. Learn from your failures
A strong leader will recognize why something went wrong and learn from it. That might involve asking for internal feedback or looking back at your own decisions to see how you could do things differently.
Mistakes can be character forming. Learn the lessons from a mis-step and use it to build confidence in your decision-making skills for next time round. Leaders who share their shortcomings with their team usually earn more respect than those who try to cover up their mistakes.
5. Collaborate with your team
Being a good leader doesn’t mean doing things alone. The best managers ask their teams to join them when taking on even the most difficult of tasks. By placing trust in your colleagues, you’ll be rewarded with an engaged workforce who feel more invested in the business as a whole.
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