Importance of Leadership Qualities in the Workplace

What’s one of the biggest contributors to organizational success that is commonly overlooked? Effective leadership. Managers have the single biggest impact on both team experience and organizational performance, so understanding what makes a great leader is critical.  

This guide contains everything you need to know about leadership in the workplace - why it’s important, different leadership types, effective leader characteristics, and what you can do to improve your skills.  

Let’s go! 

What Is Leadership in the Workplace?

Put simply, effective leadership in the workplace is inspiring and empowering teams to perform at their best while uniting them around a common goal or ambition.  

A great leader must inspire and motivate team members, but also empower them to achieve their potential by supporting at a practical level and removing barriers to success. But an inspired and empowered workforce is no use without a clear direction of travel, which is why the 2nd part of effective leadership in the workplace involves uniting employees around a common goal by showing how their roles contribute to the organization’s ambition.     

Great teams don’t happen by accident - they are cultivated by great leaders. Let’s explore how you can become one. 

What's the Difference Between Leadership and Management?

There are important differences between leaders and managers - you don’t automatically become a leader when promoted into a role with people management responsibilities. Being a manager involves handling resources, ensuring business processes are completed on time, and making sure operations are performed as expected. Leaders, however, have a wider vision and think beyond objectives or problems to inspire people to convert challenges into opportunities.  

The difference between leadership and management is influence and inspiration, not grade, control, or the size of your team. 

Which is great news for managers who want to become leaders! The power is in your hands. 

The Importance of Leadership in the Workplace

Leadership in the workplace is important because it: 

• Creates a More Positive Work Environment
• Improves Productivity
• Increases Employee Motivation
• Positively Influences Employee Retention 

Effective leadership is the foundation of any successful organization. Good leaders create a positive and productive environment by building greater trust and loyalty across the workforce that motivates employees to perform at their best. 

Research shows a strong correlation between leader capability and the likelihood of employee engagement and performance. Let’s explore some of the reasons why.

Creates a More Positive Work Environment

Creating a positive work environment always begins with the leader. They set the ‘tone of the team’ and are responsible for building a culture of respect. The best leaders encourage collaboration, communication, and trust. They understand the importance of creativity and innovation while also providing support and guidance. 

Improves Productivity

Leadership quality accounts for 70% of the variance in team engagement, and engaged employees are 38% more likely to exhibit above-average productivity.

A productive team is efficient, energized, and empowered to make good decisions quickly. And a great leader is able to foster this kind of environment by delegating tasks and setting realistic deadlines. Conversely, 65% of employees reported a loss of productivity due to poor leadership.

​​Increases Employee Motivation

Employee motivation is the degree to which team members bring energy, creativity, and commitment to work. A great leader creates a highly-motivated workforce by aligning talents with goals, encouraging learning and giving regular feedback.  

Our research at the Center for Talent Innovation shows that people who feel like they belong at work have 3.5 times the motivation to contribute to their fullest potential, and a great leader proactively builds a sense of belonging and inclusion. 

Positively Influences Employee Retention 

Employee retention is a major focus for organizations worldwide, which is no surprise when you consider it costs an average of 33% of an employee’s annual salary to recruit their replacement.  

1 in 2 employees say they’ve left a job to get away from their leader, and those with a negative perception of their leader resign at a rate that is 56% higher than average. 

Retaining your best employees is easier when they’re motivated, engaged, and feel they are part of a great team. An effective leader understands the importance of this, ensuring their team members are valued and appreciated. 

Types of Leadership

When it comes to leadership in the workplace, one size certainly doesn’t fit all. 

There are many different leadership styles, shaped by individual experiences, strengths, and personal values. Ultimately, a leader’s style is what determines their impact, influence, and reputation. 

We can all think of a leader who role-modeled success and inspired us to be our best (shout out to Kate Banks!), but we’re probably also able to think of a leader whose style actively disengaged us. 

A variety of different types of leadership contribute to an overall leadership style. While identifying your primary leadership type can be helpful, successful leaders are fluid in their approach and able to adapt their style to suit the situation. 

To embrace this all-important adaptability, it’s helpful to understand the most common types of leadership. So, let’s dive in!

Autocratic Leadership

Autocratic leadership is a very strict approach where leaders have complete control and are responsible for making decisions without input from others. It can be viewed as outdated or intimidating, but is useful in certain situations.

For example, adopting an autocratic type of leadership might be necessary for highly pressured environments when decisions need to be made quickly without consulting large groups of people. 

But if used excessively or unnecessarily, it can damage team morale and discourage creativity - it’s therefore important for leaders to delegate effectively and avoid micromanagement. 

When the pressure is on and clear direction is required quickly, autocratic leadership might just be the best way forward.  

Democratic Leadership

Thankfully, not every day is about fighting fires. 

Democratic leadership is great for when the smoke clears. This type of leadership values collaboration and employee input. It’s the total opposite of the autocratic approach as the goal is to encourage discussion and dialogue. 

While democratic leadership can potentially impede productivity by slowing down decision-making, it can also boost engagement and morale by ensuring all voices are heard. 

Servant Leadership

Servant leadership is all about prioritizing the needs of team members by fostering a collaborative and supportive working environment. This type of leadership provides employees with the resources they need to thrive and achieve their full potential.   

Research shows that servant leadership can enhance both team performance and satisfaction. It’s a very inclusive and respectful approach, but, similarly to democratic leadership, it’s not conducive to quick decision-making and can result in teams losing sight of goals if used excessively. 

Transformational Leadership

Transformational leadership focuses on inspiration and motivation. Leaders work hard to create an environment that builds team members' confidence and accountability. It’s all about articulating an inspiring vision that motivates employees to contribute proactively. 

Embracing change, transformation, and growth is at the core of transformational leadership, which is great for organizations rolling out a new ambition or strategy. 

While this approach can draw attention away from the day-to-day details, it certainly has a role to play in connecting employees to the bigger picture.    

Charismatic Leadership

Similarly to transformational leadership, charismatic leadership focuses on inspiration and big-picture thinking. But charismatic leaders harness the power of charm, likability, and personality to motivate team members to follow their lead. 

This might sound great, but it’s impossible to just decide to become a charismatic leader. Charisma is a personality trait perceived by those around you, so to embrace this approach leaders need to exhibit strong communication skills, emotional intelligence, and positive energy. 

Charismatic leadership is helpful in high-energy environments that need a boost of morale. 

Qualities of an Effective Leader at Work

There are consistent qualities and characteristics demonstrated by the best leaders in the workplace. To be able to inspire, empower and unite their teams, great leaders need to communicate effectively, give and receive feedback, and articulate expectations clearly. 

We’ve distilled some of the most important characteristics that make an effective leader. 

Self-Awareness and Emotional Intelligence

Self-awareness and emotional intelligence sit at the core of successful leadership.

Defined by Harvard Business School as the ability to understand and manage your own emotions while recognizing and influencing the emotions of those around you, emotional intelligence is the glue needed to form meaningful relationships with team members. In fact, research shows that it accounts for almost 90% of what sets high performers apart from their peers.   

Getting back to basics, you need to be self-aware and emotionally intelligent in order to build trust and bring out the best in your team.

Excellent Communication Skills

Excellent communication is one of the most important characteristics of a good leader. They are able to clearly articulate a vision, share honest updates, and clarify expectations. But excellent communication is also about listening to team members. Employees who feel they are being listened to are 5 times more likely to perform at their best, so leaders need to listen actively and turn what they learn into actionable insights.

According to the Center for Creative Leadership, the best leaders know when and how to communicate and are able to select whether writing, conversing, presenting, or facilitating is the most appropriate method.  

Giving Constructive and Timely Feedback 

Constructive feedback enables employees to improve their skills and ultimately grow their careers. Good leaders establish positive feedback loops, building trust and psychological safety. They’re also able to identify and address issues before they become larger problems. 

Timing and frequency are both important. Effective leaders do not wait for an annual performance review to give constructive feedback. Instead, they check-in regularly with team members to discuss performance in real-time.

Continuing to Learn & Improve

There’s nothing worse than a leader who dishes out constructive feedback but is closed to receiving any themselves! 

A ‘know it all’ attitude is one of the most common characteristics of a bad leader. Great leaders adopt a growth mindset and constantly strive to achieve their full potential. A commitment to personal development enables leaders to overcome challenges and continue progressing toward goals. 

Remember… every day is a school day! 

Set Clear Goals & Objectives

Proving direction by setting clear goals and objectives is essential. 

Helping employees feel connected to the organization’s overall ambition or strategy is one of the most important things an effective leader can do. Great leaders are able to leverage each team member’s talents to support the overall goal, while still making space for individual autonomy.

Improving Your Leadership Skills

The good news is that great leaders are made, not born. Research suggests that around 70% of leadership qualities come down to experience and life lessons, while only 30% are genetic. 

The bottom line? Great leadership can be learned. 

By improving the leadership skills that sit at the core of the qualities we explored earlier, you can build your influence and inspiration to become a great leader. Here’s how! 

Audit Yourself

To be able to develop your leadership skills, you first need to understand your strengths and weaknesses. 

One way to do this is to complete 360-degree feedback, where you evaluate your performance and then match it against the opinions of others (including your team members!). This might sound scary, but it will allow you to assess your current level of influence and highlight any blind spots. 

As we discussed earlier, the best leaders continue to learn and improve. Asking for feedback will provide you with the direction that you need to be able to draw up a leadership development plan.  

Understand the Different Leadership Types

An important part of leadership skills improvement is strengthening your ability to switch leadership types depending on the situation. 

Take some time to understand the different types of leadership we explored earlier in this guide. Consider your primary type and begin trying out alternatives during different scenarios. 

For example, you might predominantly practice servant leadership but are due to launch a change program that will steer your department in a new direction. Why not practice shifting toward transformational leadership to connect your team to the strategy?  

Surround Yourself With Inspirational Leaders

You can improve your leadership in the workplace by taking inspiration from leaders both in and out of the corporate environment. 

If you find someone particularly inspiring or influential, study them. Consider what makes people want to follow them, and how their style of communication differs from other less-influential leaders.  

Learning from others in this way will activate your mirror neurons and develop you into an even more effective leader.