What makes an effective leader?

Who do you think of when you close your eyes and imagine a leader? Perhaps you see Steve Jobs delivering a keynote address, a football manager shouting at his team on the sidelines, or maybe a teacher of yours. Whoever you imagined, the fact is, we meet leaders and role-models in all walks of life and many simply have a charisma about them that makes us want to follow their example.

A leader is person with a vision, someone who inspires others to achieve their potential and sets an example that people want to follow. Leaders operate in business, in sports, in education and, really, in any collaborative situation or environment. But even without a definition, leaders are very easy to spot.

Nevertheless, it doesn’t mean that leadership is simply a natural personality trait. Not every leader is born with leadership abilities; many people in positions of power have to work hard to improve their leadership skills.

Leaders have a big impact on the success or failure of the businesses they run and, as the thousands of books on leadership attest, leadership can be taught and individuals can develop the skills needed to lead.

Vision

Regardless of your position or title, it’s impossible to lead without a direction and clear objectives. In business, a leader’s vision ultimately forms the backbone of a company and informs culture, goals and team values.

Every leader therefore needs to develop objectives and set out a clear and ethical path towards achieving them. At the same time, leaders should consider their team and how best to nurture and help them grow while striving to achieve their goals.

Leaders might ask themselves the following questions in order to develop or concrete their vision:

Why do we make what we make and do what we do?
What makes us different from our competition?
How will our company make our employees’ and customers’ lives better?
What do I want people to think when they hear my company or brand name?
What do we need to achieve this quarter, this year and this decade?

Once the leader has a strong vision, he or she needs to communicate it to the team.

Communication

Business leaders, from middle-management positions to CEOs, need to be able to convey their company’s mission clearly and effectively on an individual, company, and external level. Strong leaders are therefore often good story tellers, able to express their ideas and tie their company vision into the bigger picture and industry context.

Though not all leaders are strong public speakers, it’s certainly good skill to for them to have. Whether pitching an investor with the company vision, explaining the goals for the upcoming year, or simply taking the lead in an all-hands meeting, the ability to communicate concisely, keep the listeners’ attention and convey the message is essential.

While communicating the company mission is key, listening is also an extremely important part of leadership and this ties in with emotional intelligence.

Emotional intelligence

Emotional intelligence the level to which a person can handle relationships, emotions, and complex situations in both personal and professional life. Emotionally intelligent people are more self-aware and able to control and express emotions and feel empathy for others.

Studies, such as Sales Performance Through Emotional Intelligence Development, by S. Jennings and B.R. Palmer cited in the Harvard Business Review, show that individuals and teams with high emotional intelligence are up to 12% more productive.

All leaders, to some degree or another, need to work on their emotional intelligence. Primarily this is because leaders need to understand their own emotions and intentions before making important decisions, and also, of course, because leadership always comes down to working with other people.

Common leadership types

While vision, communication and emotional intelligence are all key aspects of leadership, how they are manifested depends on the leadership style.

There are several distinct approaches to leadership, each of which has its own advantages and disadvantages. Effective leaders should know how to switch up their styles according to the situation.

Democratic

This leadership style offers a large degree of autonomy to team members, allowing individuals to make decisions and take responsibility. Hierarchy is still defined in organisations with a democratic process, and members of the organisation must be working towards a common goal (the vision), for it to be successful. The director offers guidance and certain controls; namely focusing on which individuals should vote and which should take charge of certain tasks. Although this style boosts morale and is often highly productive, it can be difficult to keep organised and communications may at times break down if there is no clear direction.

Laissez-faire

Unusual in most business situations, the laissez-faire style gives total decision-making power to the team. It is more commonly employed in organisations with highly skilled workers (such as hospitals), or companies that use expert consultants. The leader is responsible for the direction of the organisation and is still on hand to offer feedback and guidance when necessary.

Authoritarian

Leaders who run organisations with strict hierarchical structures often adopt the authoritarian style, as it favours a top-down approach. This authority is seen as absolute, there is little feedback and team members often feel disempowered, possibly inhibiting innovation within the company. This approach can work well, however, in situations where a company needs to change direction in the face of severe challenges and the leader needs to take control in order to overcome them.

Transactional

By offering rewards for good performance and punishment for poor performance, this style of leadership focuses on the direct management of the team and values strict rules and procedures over innovation and autonomy.