Why good leadership is crucial to organisational success and what matters in leadership today.
What does leadership mean?
Leadership is about directly and indirectly influencing people’s behaviour to achieve predefined goals. Why do we need leadership? A good leader provides guidance, security, and support to their employees in their everyday working lives. They serve as motivators, sources of inspiration and role models, promoting strengths, and helping overcome challenges and weaknesses.
What is the purpose of leadership?
Leadership aims to influence and drive the behaviour of employees to achieve overall company goals, such as around performance or business objectives. However, it would be wrong to limit leadership solely to improving performance goals – good leadership primarily achieves behavioural and satisfaction goals:
- Behavioural goals include increasing cooperation, improving teamwork, reducing absenteeism, accelerating personal development, fostering greater independence, and boosting employee retention. The aim is to reduce employee churn and ensure safety and behavioural rules (such as around bullying, insulting behaviour, or sexual harassment) are always obeyed.
- Satisfaction goals include increasing motivation at work, improving employee engagement, instilling a sense of fairness, and preventing employee stress and burnout.
By directly and indirectly influencing behavioural and satisfaction goals, leaders also contribute to improving overall company culture.
Why is leadership important?
Good leadership provides structure and guidance
Why is leadership important in business? Flat hierarchies have long replaced rigid structures in many companies. In these organisations in particular, leadership plays a crucial role. Leaders serve as an anchor point and provide employees with guidance, including around the company’s vision and values.
Delivering company vision and providing a clear direction is one of the reasons why leadership is important in the workplace. Leaders combine theoretical concepts with practical realities to make the company’s identity a reality, both internally and externally. They ensure that a company maintains its culture. By setting a clear vision, leaders also act as an inspiration to all and help turn strategic words into tactical actions.
At a time when disruptions such as the rise of AI mean that many employees are becoming concerned about their jobs, strong leadership can also provide them with increased security.
Good leadership enhances motivation and employee retention
Why is good leadership important in the workplace? Good leadership improves morale, increases employee engagement, enhances well-being, and boosts productivity. Employees who do not engage with their immediate manager’s leadership style have a weaker emotional connection to their company and are consequently less motivated and engaged. According to Gallup’s Engagement Index, this leads to greater absenteeism, more workplace accidents, higher turnover, and reduced productivity, profitability, and innovation. These are significant losses, primarily attributable to poor leadership, demonstrating why leadership is important in an organisation. This costs UK businesses a staggering £84 billion per year. Essentially this means that good leadership saves money – it improves retention rates. People don’t leave bad jobs – they leave bad leaders.
Good leadership enhances team communication
Good leadership fosters open and honest communication within the team. It creates an environment where everyone can contribute, including providing constructive criticism and generating new ideas.
Improved communication increases the abilities of individual employees to work as a team as well as overall team collaboration.
Good leadership promotes overall company development
Good leaders help their employees develop not only professionally but also personally. This creates deeper connections with employees and ensures that the team continually evolves and unlocks its full potential. Ultimately, individual development also fosters the development of the entire organisation, enabling innovation and better performance.
What is important for good leadership?
To successfully lead employees, a leader needs to be human and compassionate. This is the only way leaders can understand and respond to the needs of individual team members, treating them as individuals rather than interchangeable cogs in the company machine. Understanding and applying this approach ensures that leaders gain the full and lasting respect of the wider workforce.
The future requires empathetic and transformational leaders who are primarily distinguished by their interpersonal skills. Good leaders put people first, leaving routine tasks to AI. These leaders have a trust-based relationship with their team and serve as visionaries and role models for their people.
Key attributes include:
- Ability to work in a team: Flat hierarchies are the leadership model of the future. Managers are not above their team but work alongside them. Leaders are not dictators but mentors, coordinators, and coaches.
- Communication skills: A good leader needs excellent communication skills in three ways. Firstly, they are communication managers, ensuring an open flow of information throughout the team. Secondly, they are also effective communicators themselves. Lastly, listening is an essential part of communication – and perhaps the most underestimated discipline within successful leadership.
- Transparency: Openness creates empathy and trust, which, in turn, fosters openness from the team. This is essential for effective, strong, and positive collaboration.
- Assertiveness: A leader must be able to assert themselves – not by force but through well-communicated, rational arguments. Leaders can’t please everyone – sometimes they must make difficult decisions. A wavering leader cannot lead a team.
- Accessibility: A leader who shuts themself away in their wood panelled office and is only contactable if you make an appointment with their assistant will never gain the full support of their team. A leader must remain on the same level as team members.
- Tolerance of mistakes: Innovation and change is vital to moving forward. However, new ideas don’t always work, and mistakes can happen. To err is human. As long as mistakes are not disastrous, a leader should deal with them with composure and ensure that lessons are learned, rather than losing their temper.
- Trust: If you give your team freedom, they will reward you with their ongoing commitment. Leaders who understand this have more loyal and high-performing employees.
- Sensitivity to potential: Often, employees have hidden talents that they may not even be aware of or are too scared to share. A leader who recognises these talents will have a more content and successful team, automatically fostering greater engagement.
- Self-reflection: Critically questioning oneself and one’s work is challenging and requires strength of character. Just as every team member can make a mistake, every leader occasionally chooses the wrong option. Recognising this, admitting the mistake, and correcting it demonstrates true leadership. 360-degree feedback is a helpful tool to recognise and learn from one’s mistakes.
In short, good leaders are true leaders. They put people first, understand the needs of their employees, and have the ability to motivate different generations.
Would you like to learn more? Read our blog post on what leadership means and the different types of leadership.
What is important to developing good leaders?
Turn the right people into leaders
In many companies, the philosophy is to appoint the most competent employees or those with the greatest experience or the willingness to take on more responsibility to leadership positions. However, many companies overlook the fact that few employees naturally possess the necessary leadership qualities from day one.
Furthermore, leadership and leadership development are often misunderstood. Managers with master’s degrees in business administration are appointed as leaders, but as the title suggests, their training has not equipped them to focus on employees but rather company administration instead. As an alternative, successful companies develop individuals with strong interpersonal skills into leaders.
However, it’s important to note that not every good professional wants to become a leader. Therefore, talk to your employees before promoting them to leadership roles.
Provide a framework for development
Leadership requires skills that can be learned just like other professional tasks. It’s essential that companies and HR teams actively support leaders and provide a framework for their ongoing development.
They must assist leaders in listening, self-reflecting, developing their team, and learning empathetic leadership – as these are the qualities that make good leaders.
The most critical part of this framework is feedback. Both aspiring leaders and experienced ones require regular external and self-assessments to advance their development. A smart software solution can help. Tivian’s Leadership 360 provides leaders with constant feedback, delivering actionable insights, and making it easy to drive meaningful change.
Take your company to the next level with good leaders and Tivian’s Leadership 360]
Or learn more about how leadership development works today.