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Importance of Organisational Leadership

July 8, 2022

To a great extent, the fortunes and misfortunes of organisations are traceable to the existence or inexistence of effective leadership. Recognising this fact, 83% of businesses affirm that having leaders at all levels is important.

Ironically, 77% of companies reported leadership gaps, while only 5% have executed leadership development across all levels. This explains why businesses in the US spend $166 billion annually on leadership development, nearly half of global spending.

These facts and figures accentuate the importance of leadership to the performance of businesses. This article answers the question, “Why is effective leadership so important to the success of any business?”.
 

What is leadership?
Leadership is primarily understood as the act of directing people towards the actualisation of a specific goal. Leadership is more about making an impact than occupying a position. This explains why leaders are needed at all levels of organizations.


Does being a manager necessarily make one a leader?
No, not necessarily. Workplace makes the following distinction between leaders and managers:

Managers
1. Exercises authority based on position
2. They are focused on processes
3. They operate within organisation
4. They are focused on structure
5. They are mostly concerned about the details


Leaders

1. They exercise authority based on qualities
2. They are focused on vision
3. They operate relatively independently
4. They are focused on innovation
5. They are mostly concerned about the big picture
 

Related: 5 Qualities of Effective Organisational Leaders


Why is leadership so important?
 
1. Employee retention
Effective leadership plays a key role in employee retention. Specifically, making employees feel valued and appreciated helps organisations keep their best talent. On the contrary, 66% of employees will quit for not being appreciated.


2. Inspiration and confidence
Leaders are needed to help inspire and instill confidence in employees. In addition to making them share their visions, effective leaders get the best out of their team members by helping them maximise their potential and see possibilities instead of obstacles.


3. Envisioning challenges
Leaders foresee obstacles ahead of time. They proactively work in collaboration with team members to figure out likely solutions to envisaged challenges.


4. Conflict management
Conflict is an unavoidable phenomenon in social interactions. The workplace is prone to occasional conflicts among employees. In the absence of a unifying, emotionally intelligent leader, conflicts will be poorly managed and become frequent, ultimately affecting teamwork and productivity.


5. Augments authority
Managers occupy positions of authority in relation to their subordinates. This enables them to assign tasks as well as give directives and expect obedience.

But authority isn’t enough. Enviable leadership qualities are needed to inspire and motivate employees. In addition to their technical knowledge, soft skills like emotional intelligence are necessary for effective leadership.


Bottom line
Leadership is a major contributory factor to the performance of organisations. Despite this, there is an increasing leadership gap in most sectors.

To address this issue, some companies are investing in leadership development while others are paying more attention to leadership qualities during the recruitment process.

Regardless of your position, you can make an impact in your organization by exuding the aura of a leader. 










Image source: Pixabay