The 10 Most Important Leadership Qualities Of Successful Business Owners
Below you will find the top 10 leadership qualities that contribute to the success of a business owner. These qualities remain the same regardless of industry, business size, and core services. Leadership is about the people in your business, and not the business itself.
A leader will organise & rally people around a single vision or direction and motivate them to achieve it. Most importantly, A leader will take action by always going first while never asking someone to do something they are not willing to do themselves.
Table Of Contents
- What Leadership Is?
- Common Leadership Styles
- Top Leadership Qualities
- Effects Of A Bad Leader
- Important Questions
- Important Resources
What Leadership Is?
In order to understand the leadership qualities that are the most important, we must first understand what leadership is.
A leader is a person who can manage or organise a group of people and focus them in a direction. Good leaders will also understand how to motivate others and push them towards self-improvement.
Leadership and management are often incorrectly mixed in business, however, the two are not the same at all. Management is the role of ensuring a task, or series of tasks are completed using the resources at hand, and in some cases acquiring new resources.
Leadership is people-focused, and while a good leader will generally make a good manager, a good manager may not necessarily make a great leader. The biggest difference between the two seems to be the mindset.
Leaders, even if employed by an organisation, rarely think like an employee. Managers generally think and operate like any other employee in the business.
Common Leadership Styles
There are different styles of leadership in business and these styles vary greatly from person to person, even within the same organisation. Leadership styles are not the same as leadership qualities, different leaders may all possess the same qualities, but have completely different styles to how they lead.
Below we have listed 4 of the main styles a business leader could have.
- Authoritarian Leadership
A leader who will retain the majority of the decision making while imposing adherence to a rigid framework. While this may be the right style for a temporary period of flux in the organisation, this, unfortunately, will come at the expense of innovation, creativity and morale.
- Democratic Leadership
This style of leadership is much inclusive of those you lead and involves them in the decision making much more than the authoritarian leader. This style can also help to increase ownership and overall morale within the organisation.
- Coaching Leadership
A coaching style will often be employee-focused and have a deep understanding of the people under their leadership. This style of leader will understand how to align the employee’s goals with the organisations resulting in high levels of satisfaction.
- Transformational Leadership
The transformational leader is perhaps the rarest and impactful. These leaders display high levels of the most important qualities and have the highest impact on the organisation they work in. A downside of the style can be a disconnection of the individual due to the intense company focus.
The Top Leadership Qualities
Empathy is an important leadership quality as it can be a precursor to many of the others in this list. Having empathy as a leader will allow you to connect with the people you lead and help you understand their feelings and perspective.
A great leader will be highly empathetic and by doing so will be perceived as genuine and caring. Having empathy will also help increase the trust between them and their employees. A lack of empathy can be devastating and is a driving factor in businesses with high staff turn over.
Another vital leadership quality is complete transparency. Being a transparent leader has massive benefits with no real downside whatsoever. Unfortunately, this is still a quality that many novice leaders lack in business.
Transparency helps to win the trust of your following along with creating a culture of honesty and unhindered communication.
If a leader is not being transparent it becomes obvious to others and that leader loses the trust and respect of their employees very quickly. However, if the leader is completely transparent, this can encourage others to also be transparent increasing overall employee engagement.
Trustworthiness is a leadership quality that can not be taught or coached. A leader can only build trust through their actions and delivering on any promises they have made. Aligning words with action will showcase to staff that they can believe what their leaders say. This will also will make it much easier to drive a team towards a goal or vision.
Trust also has a huge impact on how effective your coaching will be as your team will be much more receptive as they trust the teachings will help them personally.
Having the leadership quality of critical thinking in its truest sense is quite rare in business.
Being a critical thinker demands you to question the status quo while never taking anything for granted. This way of thinking can often be a friction point for new leaders as they fear questioning their own leadership, or in fact the leadership of someone they may work for.
The advantage of critical thinkers is they will often be able to continually improve processes and operations within an organisation. This leadership quality is often paired with a visionary approach and can be immensely powerful to drive future growth and change.
Being flexible is an important quality, especially in a modern agile environment. Leading is about people, and people vary wildly even within the same organisation or department. Being a great leader will mean you may need to adapt your style or approach to each individual ensuring its remains effective.
Another aspect of a flexible leader is the ability to pivot themselves and a team aligning with any sharp changes within the organisation. A lack of flexibility can have a catastrophic impact on a business as they may not be aware of a vital change, and thus, move their team further and further away from the core mission.
One of the leadership qualities that can be taught is effective communication. A good leader will understand how to communicate effectively and be able to adapt their communication style depending on the person or situation they are dealing with.
The ability to be concise will limit any misunderstandings and often result in greater overall output throughout the organisation. A great communicator will also be able to get their vision across in a much more palatable way, doing so will also increase the participation rates of others.
Understanding how to adapt your communication depending on who you speak with will also ensure you that any coaching has the highest chance of being absorbed by your employees.
The emotional intelligence of a leader, if they are to be successful, is paramount. A leader is focused on people, and because of this, they will need an extra layer of intelligence in addition to traditional academia.
A leader who has high emotional intelligence will be able to identify how others are feeling and what they are thinking far more than a leader without it. This will also allow a greater connection to their employees leading to greater influence and trust.
Emotional intelligence can also help with being aware of your own feelings and how to control them when needed.
Being a visionary is a leadership quality that can rarely be taught. This is a hallmark of some of the most iconic leaders throughout history and can impact far more than the organisation they work within.
A visionary leader is in fact more of a leadership style than quality, however, to have “vision” can also be A quality and deserves a mention.
These leaders look far into the future at the upper limits of what an organisation can become, sometimes at the detriment of the day to day operations. A leader with vision can be intensely focused and highly inspirational, (think Elon Musk, Steve Jobs, etc).
9.Empowerment & Delegation
An amazingly profound leadership quality, empowerment and delegation can grow an organisation like no other quality. A good leader will empower their employees to make decisions and take action through effective coaching and training.
Once empowered, the best leaders will understand how to delegate, and leverage the talent pool to grow the business or department faster then they could ever do on their own. Sadly new leaders seem to always lack this skill although this is a quality that can be taught.
One of the most overlooked leadership qualities is accountability. This is quality can be hard to obtain as it means you may need to admit your mistakes or shortcomings.
A great leader will never blame another person even in times that the other person is at fault. Instead, a strong leader will take ownership and find a solution to the problem created by a fellow worker or in fact themselves.
Taking accountability as a leader can also become a huge catalyst for change and it starts this by building immense trust. As employees see someone taking accountability and being honest they begin to trust the leader at a much deeper level.
Effects Of A Bad Leader & The Cost To Your Business
A poor leader can have a severe impact on an organisation and the people within. Having an ineffective leader can often lead to a loss of morale and employee satisfaction. Having a demoralized team can in turn dramatically reduces productivity and overall output.
In addition to a loss of output, low morale can have negative effects on your customer base, reducing the level of customer service provided by your employees.
Important Note: The cost of bad leaders to businesses is estimated as high as $3.5 Trillion Dollars in the US markets alone.
Another disruptive consequence of a bad leader is high attrition rates in both employees and customers. Having a revolving door of staff can cost huge amounts of resources in training and on-boarding.
Over all a bad leader is a severe drain on business and should be removed without hesitation.
Other Important Questions
- Is A manager the same as a leader? Answer: No, while some managers are also leaders, the two roles differ.
- Can you teach leadership? Answer: Yes, Leadership can be taught, provided the person has the capacity to learn.
Below you will find resources about leadership and leadership qualities.
There are some amazing books on leadership and how to build the skills required. We recommend downloading audible and listening to the audio versions.
This course “What great leaders do” is a free online course taught by Stanford University professor Bob Sutton and can be found on the Alison network.