What Is Leadership and Why Is Leadership Important?
This lesson explores the concept of leadership, why leadership is important,key leadership activities and its impact on organizational success.
Lesson 1
What Is Leadership?
Leadership is a fascinating subject which has been studied for many years dating back to the 1900s. Research over the centuries have tried to determine what Leadership is and what factors differentiate a successful leader from an unsuccessful one. Definitions of leadership include:
- "the ability to influence and motivate people by your behavior and personal qualities."
- "developing a vision and inspiring others to help you achieve that vision."
- "having the integrity to do the right thing and creating a culture where people feel inspired and empowered to accomplish goals."
There is no single definition that completely encapsulates what leadership is as there are many situational and other factors that impact on leadership, including its application in many different contexts, such as the military, businesses, non-profits organizations, educational institutions, and so on. Because of this complexity, leadership is not something that could be learned overnight.
Effective leadership is a journey that requires the acquisition of knowledge, practice, experience, determination, and personal resilience.
Historical Overview of Leadership
Exploring the theories of leadership will give you a deeper insight into the complexity of leadership and how it has evolved over the years. The main theories include:
Great Man Theory (1830s)
Great Man Theory advocated that leaders were gifted individuals who were born to lead, and as the name suggests, leadership was considered to be a male quality.
Trait Theory (1930s)
Trait theory evolved from the “Great Man Theory,” it assumed that there were some inherent traits that set leaders apart from non-leaders. These traits included certain physical, personality, social and intellectual characteristics.
Behavioral Theory (1950s)
Behavioral theory is the opposite to the “Great Man Theory.” The premise here was that effective leaders could be differentiated by the way they behaved. This was a huge shift from the trait theory in that it emphasized behavior as opposed to inherent traits.
This effectively meant, that once those behaviors were identified, people could learn to be leaders. However, like the previous theories, it did not take account of situational variables.
Situational Theory (1960)
Situational theory suggests that to be effective, the leader must adapt their style of leadership to deal with the situation, or the level at which the follower is operating. For example, if the leader is dealing with a new team member, they would adopt a more directive style than if they were dealing with an experienced employee.
Similarly, in an emergency, a leader who normally has a more collaborative style would need to adopt a more authoritative or controlling style to be effective.
Contingency Theory
This theory is sometimes confused with situational theory, but it is different as it assumes that the leader is unable to adjust their style to the situation. Therefore, to be successful, the leader and the situation needs to be well matched.
For example, Winston Churchill was thought to be a great leader during World War 2 however, he was not considered to be an effective leader during peacetime.
Transactional and Transformational Theories (1970s onwards)
Transactional and Transformational leadership theories were first introduced, by James McGregor Burns (1978). Transactional leadership is primarily concerned with completing the daily tasks, whilst Transformational leadership is concerned with building more meaningful relationships that transcends daily tasks.
These two leadership styles are widely used in organizations today, and will be discussed in more detail in lesson 2.
Why is Understanding Leadership Important?
Understanding Leadership
Understanding the concept of leadership is important because it is a critical factor in driving business performance, and ensuring the survival and growth of organizations. Effective leadership enables the organization to respond appropriately to constantly changing opportunities and threats, in both the internal and external environment, in which the organization is operating.
Effective leaders undertake a range of activities including:
Providing Direction
Leadership (at all levels) provides direction and initiates action to achieve strategic and operational goals, in a systematic and focused way.
Organizations need to have a clear idea about why it exists (its mission), as well as the ultimate goals for the future (its vision). If the mission and vision is clearly communicated in a compelling and enthusiastic way by leader(s), employees are much more likely to want to go on the journey and to feel a sense of engagement and ownership. They will have a better understanding of the organization’s role, where it’s heading, and how they can contribute to the bigger picture.
Providing Inspiration
As a leader, it is important to inspire people to go beyond mere compliance as this only prevents customer complaints. Inspired people are much more likely to exert discretionary effort if they understand what they are required to do, why they are doing it, and how it contributes to the whole.
Their performance is more likely to create WOW moments for the customer and loyalty to the organization, where customers return because of the high quality of service they received.
Shaping the Organization’s Culture
Culture is primarily concerned with the internal environment of the organization including the way that people behave on a day to day basis and its impact on business performance. It is the role of the leader to contribute to shaping the preferred culture of the organization and to ensure that policies, systems, procedures, and daily practices supports what the organization is trying to achieve, including its values and beliefs.
For example, if an organization wants to create a culture of “excellent customer service” leaders must first demonstrate, through their behavior, that they value their staff by treating them with dignity and respect. Creating an “excellent service culture” should also be supported by the organization’s recruitment, performance management, training, and reward systems.
Pursuing Opportunities
Pursuing opportunities is an important part of effective leadership. Organizations do not operate in isolation, so responding in a timely way to changes in the external environment (social, environmental, technological etc.) will have a significant impact on its operation, survival, and growth.
For example, many hotels are adopting an eco-friendly approach to hotel management in response to concerns about the environment and environmentally sensitive guests.
The Impact of Effective Leadership on the Organization
Effective Leadership
When leaders actively provide direction, inspire employees, shape the preferred culture of the organization, and respond appropriately to external threats and opportunities, this can have a significant and positive knock on effect on the organization, its managers, and employees as illustrated in the flow-diagram below.
Competent and Caring Manager
Engaged Employees
Dedicated and Motivated Employees,Committed to Success of Organisation
Customer Engagement
Increase in Brand Perception / Sales / Profits
Is Leadership different from Management?
Many people believe that management and leadership is the same thing. However, they are distinctively different disciplines, although they are very much interconnected.
Management is primarily concerned with coordinating the efforts of people to accomplish goals and objectives, using available resources (land, labor, capital, technology etc.) efficiently and effectively. Leadership on the other hand is concerned with developing the organization’s vision and ensuring that, through a range of activities, people are motivated and willing to help the leader achieve that vision.Both disciplines, seen below, are important to organizational success, and as previously mentioned there is significant overlap of the two functions depending on the organization, the style and experience of the manager/supervisor, as well as the level at which they are operating.
Key Management Activities
Planning Deciding what needs to be done. Who, when, where, how, etc.
Organizing Arranging things in a specific way, including structures and systems.
Controlling Ensuring that all the available resources are being utilized efficiently.
Implementing Taking the necessary steps/actions to ensure the task/goal is being achieved.
Monitoring Making sure things are on track and in accordance with plan.
Key Leadership Activities
Providing a vision and shared values Developing a clear vision including goals and objectives. Inspiring and motivating people to be part of the vision.
Being a role model Leading by example and demonstrating the values you espouse through your behavior.
Communicating openly Two-way communication where people feel comfortable sharing views, thoughts, feelings. Being honest about the state of the organization and the challenges it faces etc.
Demonstrating integrity Doing the right thing and taking tough decisions even if it means being unpopular.
Activity
Being clear about the nature and role of leadership is a big step towards becoming a better leader.
Using your pen and notepad, write down:
- What you have learned about what leaders do. Are there any areas that you are particularly good at?
- What aspects of your current performance do you think you need to strengthen? For example, do you need to create a better balance between your management and leadership activities?
- How will this impact on you, the team, and the organization?
Key Learning Points
- Leadership is developing a vision and inspiring others to help you achieve that vision.
- Leadership theories have evolved over the centuries and include Great Man Theory, Trait Theory, Behavioral Theory, Contingency & Situational Theories and Transactional & Transformational Theories.
- Leadership is important because it is a key factor in driving individual and organizational performance.
- Management and Leadership are different disciplines although they are interconnected.
- Management activities include, planning, organizing, implementing, controlling, monitoring etc.
- Leadership activities include, providing a shared vision and values, communicating in a compelling and persuasive way, shaping the organization’s culture, demonstrating integrity through your actions and behavior.
- Both management and leadership activities are important to organizational success.
You have now completed Lesson 1. Click the button below to view Lesson 2.