What is organizational leadership, why does it matter, and – more importantly – how can it be improved?
In this guide, we’ll answer these questions and learn:
- How organizational leadership impacts the organization’s performance
- How to improve organizational leadership
- The keys to being a great leader
- Consequences of poor leadership
And much more.
Let’s start by understanding the basics of this topic. We’ll do that by answering some of the most commonly asked questions about leadership.
Organizational Leadership FAQ
This organizational leadership FAQ explains some of the most basic ideas about organizational leadership.
To begin, let’s answer the most basic question of all:
What is organizational leadership?
Organizational leadership is the discipline that focuses on leadership within an organization.
The field specifically aims at:
- Setting goals
- Meeting and overcoming challenges
- Enabling individuals and groups to achieve those goals
- Implementing organizational changes when necessary
- Improving the workplace
Leadership does not apply only to an organization’s top tier of leaders, however.
It impacts leadership and management on all levels of a company, including:
- The leadership at the highest levels of the business
- Senior and middle managers
- Team leaders
Ultimately, leadership is a trait that can be exhibited by any employee within an organization, given the right circumstances and opportunity.
Because effective leadership is such a crucial attribute for organizational success, it should be cultivated whenever possible.
And those who exhibit leadership skills should be allowed to grow and rise within a business.
Why is organizational leadership important?
Leadership plays a defining role within the performance of an organization.
The success or failure of an organization, for instance, can depend entirely on how leaders behave.
There are many reasons for this:
- The leaders of an organization play a crucial role in the formation of an organization’s culture
- Leaders’ behavior directly impacts how employees behave
- Effective leaders inspire and motivate employees, while poor leaders do the opposite
- Leaders make key decisions about the workplace, the organization, and employees – and wrong decisions can lead an organization down the wrong path
Ultimately, an organization’s performance can be dictated by its leaders.
What makes a good leader?
There are different opinions about what makes an effective leader.
The reasons for this are simple:
- Different people have conflicting perspectives on how an organization should be structured and manage
- What is considered effective in one organization may not fit the culture of another organization
- Unlike other organizational functions, it is difficult to measure leadership with quantitative metrics
There are certain studies that have attempted to develop unified concepts of organizational leadership, however.
The GLOBE Project, for instance, studied organizational leadership across many cultures around the world.
That project evaluated leadership styles in a number of organizations and identified several “styles” of leadership that can all be effective:
Each style listed has a different approach to leadership.
The autonomous style, for instance, focuses on independence and individuality. The team-oriented style, however, takes a contrary approach, emphasizing teamwork and operation as a single unit.
Each style can be effective, so an organization should not look for a single style.
Instead, it should closely evaluate its culture, its needs, its employees, and then determine which leadership styles are the best fit for its circumstances.
How is leadership effectiveness measured?
As mentioned, it can be difficult to quantitatively assess the performance of leaders.
While numbers such as sales quotas can be easily measured, leadership cannot.
It is true that leaders affect organizational performance, employee performance, and team performance.
All of these can be measured.
However, leadership is only one factor among many that can affect performance levels.
For that reason, most leaders survey employees to evaluate their leadership.
Employee sentiment can provide a useful window into leadership effectiveness, especially when viewed in relation to performance.
How do organizations improve their leadership?
Organizational leadership is typically improved through leadership development programs.
These programs, as the name suggests, aim to improve leadership skills within an organization.
To truly make leadership improvements, organizations should:
- Employ interactive, experiential leadership approaches that let trainees learn by doing
- Ensure that leaders have space to operate and employ new skills, which means that an organization must be ready to adapt to new leadership approaches
- Hire leaders who can act as guides and enable others to reach their potential
In short, any organization that wants to improve its leaders should implement a leadership development program – while ensuring that the rest of the organization is supportive of the program and its leaders’ new approaches.
How Leadership Impacts Organizational Performance
As mentioned, organizational leadership is only one of many factors that impacts organizational performance.
However, it is a very crucial factor, upon which many others depend.
Leaders, after all, make key decisions that define a great many aspects of the organization, such as:
- Organizational structure
- Business processes and systems
- Organizational strategy
- The culture of a business
- The workplace
- Products and services
- Workers’ behavior
To name just a few.
Below, we will look at just a few of the important impacts that a leader can have on the organization.
Organizational behavior refers to how people behave within an organization.
Among other things, this field explores:
- How groups and individuals behave and interact
- The impact of qualitative attributes, such as organizational culture, on behavior and performance
- How behavior affects the organization, organizational performance, and organizational effectiveness
As many business professionals already know, leadership has a direct effect on the workplace climate.
- Inspire cooperation among their subordinates, helping to create a workplace that operates more smoothly and efficiently
- Motivate their workers, boosting employee satisfaction and productivity
- Overcome workplace challenges, such as employee resistance and conflict
- Increase the efficiency of their teams, helping the organization achieve its aims more efficiently and effectively
A leader cannot have complete control over how its employees behave, of course.
However, it does play a very large part.
Leaders also affect employee sentiment.
Good leaders are respected, admired, and followed.
Poor leaders, on the other hand, can create friction, resistance, or even hostility.
These sentiments, in turn, can affect:
- Important employee metrics, such as satisfaction and longevity
- The productivity and performance of their teams
- Workplace behavior and culture
Ultimately – as is the case with all the other points covered here – sentiment can impact the organization’s overall performance.
The Employee Experience
The employee experience covers every interaction an employee has with an organization.
This experience includes:
- Every stage of the employee life cycle
- The digital employee experience
- The work environment
- Employees’ interactions with coworkers, subordinates, and superiors
Naturally, effective leaders will contribute to a better work environment, workplace culture, and workplace experience.
It is certainly not the only factor in the employee experience equation, but it is a very important one.
The right leaders can, after all:
- Help pull in top talent to an organization
- Inspire employees to work harder
- Increase enthusiasm and satisfaction
- Shape a strong organizational culture
While poor leaders can create a weaker organizational culture, decrease enthusiasm, and have other negative effects on the employee experience.
All of these impacts, as mentioned, affect important employee metrics, including:
That performance, in turn, affects their contributions to the organization, or lack thereof.
The bottom line, therefore, is represented as the organization’s bottom line – that is, organizational performance and effectiveness.
Although this link can be difficult to quantify directly, it can be evaluated through employee surveys and data, as we will see below.
How to Improve Organizational Leadership: Tips and Best Practices
Later, we will look at a step-by-step process for improving leadership within an organization.
However, before we do, let’s look at a few necessary ingredients for any leadership improvement efforts to succeed.
Leadership Development Programs
Leadership development programs are specifically designed to provide leaders with the skills they need to succeed.
Not all programs have the same structure.
For instance, the Center for Creative Leadership cultivates six traits:
- Thinking and acting systemically
- Learning agility
However, this is certainly not the only leadership development program in existence.
Organizations should evaluate their options carefully when designing – or outsourcing – their leadership training.
Also, it is important to note that not all leadership development programs succeed. In fact, many are unsuccessful.
According to McKinsey, there are a few common reasons for these failures:
- Leadership programs that overlook context risk offering skills that are too generalized and often irrelevant to an organization’s specific needs
- Without practical, hands-on application, development programs can fill trainees’ heads with abstract knowledge – of which only a small percent is retained and applied
- Behavioral change requires a change in mindsets, which means that leadership development programs must first understand the mindsets of their trainees
- Unless a program measures its results, it will never know how successful it is or what its actual outcomes are
In short: organizations should implement a leadership development program that is sophisticated, well-structured, and carefully designed for success.
Employee sentiment, as mentioned, is a major measure of the success of leadership development efforts.
Therefore, organizations should continue to track:
- Employee feedback
Employee surveys, as mentioned, are among the most effective ways to measure leadership and leadership development efforts.
However, other data sources can be useful, such as:
- The performance results of specific business units
- Employee productivity metrics
- Organizational performance and productivity
More specifically, these metrics can and should be tied to key performance indicators (KPIs) for a particular leader’s business unit or domain.
For instance, a sales manager may be evaluated by:
- Employee satisfaction, engagement, and motivation
- How quickly employees become competent
- His unit’s productivity as compared to the performance of other units
- Specific performance metrics, such as closed deals and sales calls made
That performance, when measured alongside employee sentiment, can provide a valuable window into a particular leader’s abilities.
Organizational Change Management
Improving any area of an organization, including leadership, often requires change.
One obstacle to leadership development, for instance, is the organization itself. As we saw earlier, any changes in a leader’s ability must be accompanied by corresponding changes in the organization.
An organization, in other words, must be adaptable and ready to accommodate new leadership styles, techniques, and tactics.
Implementing change management within an organization is one of the best ways to do this.
Incorporating a change management function within a business:
- Increases organizational agility
- Helps to decrease employee resistance and other obstacles to change
- Improves the efficiency and effectiveness of organizational change projects
This type of program can be useful for a number of reasons.
On the one hand, as mentioned, it helps organizations accommodate the evolving techniques and tactics of leaders as their abilities evolve.
Also, when leaders’ techniques evolve, organizations can expect them to implement organizational changes – and the better those changes are managed, the better the results will be.
Measurement and Optimization
Another prerequisite for improving leadership is effective evaluation and improvement of development efforts.
- Defining the aims of a leadership program
- Creating a program that specifically improves those areas
- Measuring those efforts and tracking improvement efforts over time
Since each leadership program will have different goals, it will also use a unique set of metrics.
For example, if a program aims at providing two or three competencies to an organization’s sales managers, then the program would evaluate those specific skills – as well as the results produced by those training efforts.
A Step-by-Step Process for Improving Leadership
So far, we have explored several key concepts related to organizational leadership, as well as a few components necessary to improving leadership.
Now it is time to put those pieces together.
Next, we will examine a sample process that organizations can follow if they want to enhance their organizational leadership and performance.
1. Assess the current state of organizational leadership
The first step of organizational improvement processes is to:
- Assess the organization’s existing leadership capabilities
- Determine how that leadership impacts employee performance
- Identify weaknesses and growth opportunities
This information will then be used to design a leadership development program.
2. Set strategic goals
The aforementioned assessments, if performed correctly, will have provided an accurate picture of leadership within the organization.
That information can then be used to develop a “north star” strategy to follow.
During this stage of the process, organizations should:
- Set clear, achievable improvement goals
- Decide which leadership skills, if cultivated, can help an organization meet those goals
- Decide whether or not to outsource a leadership development program
It is important to remember that leadership development programs should have a specific purpose.
Organizational performance improvements are typically the overriding strategic concerns for every business, since businesses are, after all, profit-driven enterprises.
Other aims – such as culture change or increasing employee engagement – are also goals that should be aimed at improving performance.
3. Create a roadmap for achieving those goals
As mentioned by McKinsey, context matters.
That is, leadership development programs should provide trainees with a very small set of highly relevant competencies.
For that reason, organizations may wish to engage in a completely custom, one-time development effort. In partnership with outside experts, such programs can have outstanding results.
However, at other times, leadership development programs may wish to repeat the same core curriculum a number of times.
In such cases, businesses should develop a set of goals and a roadmap that can be repeated multiple times.
That roadmap will outline areas such as:
- The targets set out in the previous step
- Quantifiable metrics and KPIs that can track the progress of the leadership development program
- The skills and abilities that leaders will learn
Of course, leadership development programs require expertise. Even if a business chooses to implement in-house leadership development efforts, therefore, they will likely need to outsource certain portions to experts.
4. Implement and manage the development efforts, as well as other necessary changes
Like any other business process, it is important to avoid “setting and forgetting” the leadership development program.
Also, as pointed out above, it is important that the organization adapt along with its leaders.
After all, if the leaders change, but the organization is unwilling to, then its employee training efforts could easily go to waste.
Therefore, organizations should:
- Implement leadership development programs
- Collect feedback and monitor the health of the program
- Be ready and able to implement organizational changes as necessary
For instance, if a senior manager attends a development program aimed at improving digital competencies, then the organization should be ready to transform and make changes to its operating procedures.
This can, in some cases, require another set of changes that are even more extensive than the leadership development program itself.
For that reason, it may be useful to view leadership development as part of a larger organizational change effort.
This perspective can dramatically increase the chances of success, as well as the overall impact of the program.
5. Analyze and improve
Measuring leadership and leadership development programs can be difficult.
However, the more specific the aims of the leadership development efforts, the more relevant and useful the metrics.
A program that aims at improving sales leaders’ skills – with the intent of increasing sales performance – would measure those skills and the performance of the sales department.
When the goal is improving managers’ communication skills, in order to increase employee satisfaction, then those two areas would be the ones to measure.
Metrics can then offer insight into the success and viability of the program.
For instance, post-training evaluations can determine:
- If the program successfully trained leaders on the required skills or competencies
- How much of an impact those skills had on business performance
- How effective the leadership development program was
When all of that data is collected, it can then be applied to improving the program by refining it, redefining goals, or revising its direction when needed.
Keys to Being an Effective Leader
Earlier, we briefly covered the GLOBE Project’s top leadership styles.
As we saw in that section, there is no single leadership approach that trumps all others.
In fact, there are several styles that can be effective in the workplace.
Although certain styles may work better in certain cultures than others, the fact that there are multiple successful styles should be evidence enough that there is no one-size-fits-all approach to leadership.
Despite this, there are certain concepts that many leaders agree upon.
We’ll cover a few of those here.
Stay true to your leadership style
Since there is no one-size-fits-all approach to leadership, one of the best approaches to take is by discovering one’s own leadership style.
For instance, a leadership style may be:
- Team-oriented, emphasizing teamwork and cooperative behavior
- Autonomous, focusing on independence and individuality
- Charismatic, delivering results by inspiring and winning over employees
It should be self-evident that each leadership style will spring from the personality of a particular person.
Therefore, it would be of no use to try cultivating a leadership style that conflicts with one’s own personality.
If a person is gregarious, outgoing, and team-oriented, then their leadership style will naturally reflect their personal strengths.
On the other hand, if a leader is independent – and prefers employees who can operate self-sufficiently and independently – then it could easily be counterproductive to attempt different leadership styles.
However, leaders should also take into account the culture of their work culture.
If the work culture is team-oriented, then an autonomous leader may need to make a choice: attempt to change their leadership style or find a culture that is more suitable for their personality.
Lead by example
Leading by example is a common trait praised by many leadership experts.
The idea behind this concept is straightforward – employees are more willing to follow a leader who embodies their ideas than one who merely gives orders.
Leading by examples means:
- “Walking your talk”
- Being the first one to embody changes and ideas that you spearhead
- Taking a hands-on approach to leadership, by interacting with employees on the ground
In an organizational change program, for instance, managers should embody the change that they are seeking.
A leader who doesn’t lead by example can quickly lose followers, trust, and credibility within the company.
And, depending on the circumstances, the results can be harmful – if not devastating – to organizational performance.
Imagine, for a moment, a leader at a fitness company who is out-of-shape. That leader’s credibility would suffer some very serious obstacles, among both employees and customers.
Of course, this is not the only example.
Any time a leader makes demands or requests of employees, that leader should be the first to implement their ideas.
Don’t be afraid to exert control
Many business professionals decry control and traditional hierarchical power structures within an organization.
Today, it is common for businesses to promote democratization, empowerment, and flat organizational structures.
These organizational structures certainly have their benefits, but not all business leaders think you should give up control.
Grant Cardone – a self-made multi-millionaire, serial entrepreneur, investor, New York Times bestselling author, among other things – advises the opposite.
In fact, Cardone suggests there is no harm in becoming a “control freak.”
His organizations prize meritocracy and performance-based compensation, rewarding those who go above and beyond the norm.
This approach, he says, is far more helpful for employees who want to grow both personally and professionally.
Take total ownership
Jocko Willink, leadership consultant and retired Navy SEAL, encapsulates his philosophy in the phrase, “extreme ownership.”
In a book that goes by the same name, he offers much more advice, but begins by explaining that leaders must completely own their responsibilities.
Leaders who take the blame and the responsibility for their efforts will be more likely to earn the trust of their subordinates, partners, and their own supervisors.
On the other hand, if a leader shirks their responsibility, they are undermining:
- Their very own leadership ability
Though this may sound extreme, Willink makes it a central tenet of his leadership approach.
It is easy to accept responsibility when outcomes are positive, but much more difficult to accept the results when they are negative.
True leaders, however, will accept responsibilities in all circumstances – and earn the respect of their peers as a result.
Humility is another key principle that should remain with leaders, no matter how high they climb in the organization.
There are several reasons why:
- Humble leaders are more approachable
- Employees will have a better perception of those leaders
- Subordinates are more likely to follow humble leaders than those who are aloof and arrogant
At the end of the day, every person in an organization is a human being, regardless of their income or their job title.
Arrogance and aloofness, though, immediately establish walls between leaders and their subordinates … exactly what leaders don’t want.
Those walls can have detrimental effects in many areas, decreasing motivation, respect, and support.
And if a leader’s personality is too abrasive, then it can even harm the work environment and decrease employee satisfaction.
Remember that communication is a multi-way street
Leaders should maintain a continual two-way dialogue with their subordinates.
Communication, it should be remembered, is not unidirectional.
Within an organization, communication occurs in several directions:
- Upwards, from employees to their superiors
- Downwards, from leaders to their subordinates
- Horizontally, between equals
As a manager, executive, or business leader, it is easy to become isolated and wrapped up in one’s duties.
One consequence of that is one-way communication – giving orders and mandates, rather than having discussions.
Leaders must remember to:
- Hold dialogues and discussions
- Be open to feedback
- Clearly articulate their points – and make sure the other side understands those points
- Maintain strong written and verbal communication skills
- Maintain open lines of communication with all relevant parties, both within the organization and without
Communication is one of the most important job skills, and it is just as important for leaders.
After all, ineffective communication breeds misunderstandings, interpersonal conflicts, inefficiencies, and much more.
Win friends and influence people
Interpersonal skills are critically important for leaders, and every leader should know how to win friends and influence people.
According to Dale Carnegie, author of the decades-old How to Win Friends and Influence People (still an immensely popular business book), this approach to life can help people:
- Become more popular
- Win others over to their way of thinking
- Increase influence, prestige, and earning power
- Arouse enthusiasm among their associates
Among many other things.
Carnegie advises several techniques when it comes to building relationships:
- Never criticize, complain, or humiliate others
- Offer honest appreciation
- Arouse a sincere desire in others
- Become genuinely interested in others
- Talk in terms of the other person’s interest
To name a few.
Given that this book was originally published in 1936 and has sold over 15 million copies since its publication – and since it continues to be a recommended read by many of today’s most influential leaders – the concepts in this book are well worth learning.
Never stop learning
Another important principle of leadership is continual improvement.
Being a lifelong student requires continual effort and humility, but the benefits make it worthwhile.
Leaders who continually learn new things will:
- Continue developing their careers
- Be open to new opportunities and ideas
- Be more willing to learn from their peers
- Stay relevant and current, even if the environment continues to change
- React to the world as it is, rather than to preconceived notions or beliefs
Learning, of course, has the benefit of boosting one’s own knowledge, skills, and career prospects.
However, it also helps leaders build the right network and culture within their sphere of influence.