Before we dive into the subject of effective leadership and its impact on an organization, let’s spend a few minutes understanding what leadership is, what leadership styles are and what are the traits of effective leaders and managers.
Leadership has been defined in more than hundred ways by different scholars and researchers. Hence, it is hard to come up with a single working definition of leadership. It would, therefore, be prudent to explain the concept of leadership rather than trying to define it. Here is one attempt to explain leadership:
Meaning of Leadership
First of all leadership is not just a trait, leadership is a process. A process in which a leader influences his or her followers (or team members) to set and accomplish a goal or a set of goals. To be able to accomplish the goal or a set of goals, the leader exercises his or her power to influence people. That power is exercised in earlier stages by motivating followers or team members, and even vendors, to get a specific job or set of jobs done. This power is exercised in later stages by rewarding those who perform and by punishing those who do not perform to the level of expectation set in the beginning. So, it can be safely implied that leadership is a continuous process. As soon as one goal is accomplished, a new goal begins. During this entire process of leadership, timely reward by the leader is of utmost importance to ensure that the team or the followers remain motivated at each step of the process.
A strong leader presents unique ideas and convinces his followers that a new course of action visualized or conceptualized by him or her is needed for the betterment and overall prosperity of the team in times to come. Once a goal is established, the leader ensures successful accomplishment of the goal. Then during the course of implementation of the idea or the vision, the leader represents the team and the organization, and links them to the external environment in order to gain access to the required resources to carry out its goal.
As we have pretty much understood what leadership means, it would be important to learn a little bit about various leadership styles that an effective leader assumes from time to time to positively impact the organization. Leadership styles are the ways and approaches adopted by a leader to provide direction, implement plans, and motivate employees of followers. From an employee’s point of view, leadership roles include a set of patterns of explicit and implicit actions performed to build culture, increase performance and ensure overall organizational effectiveness . One of the first major studies on the subject of leadership styles was conducted in 1939 by Kurt Lewin who led a group of researchers to identify different styles of leadership. The study holds good even now and has been the core of several leadership development programs at many organizations. There are broadly three leadership styles – authoritarian or autocratic, participative or democratic, and delegative.
Authoritarian or Autocratic Leadership
The autocratic style of leadership is used when leaders ask their employees to do what they want done and how they want it to be done, without getting the advice of their followers such as managers or other team members. The best condition to use this style of leadership is when the leader has all the information needed to solve a problem. Further the leader is short on time, and at the same time, employees are well energized.
Participative or Democratic Leadership
In this style of leadership, the leader involves one or more employees that represent the entire team, in the process of decision making. However, in this leadership style as well, as it is in the case of all three leadership styles, the leader keeps the final decision making authority. This leadership style is normally used when the leader has a part of the information, and his employees have other parts. As a leader you can not have every information that is non-strategic, they hire and retain knowledgeable and skilled people around him or her to share operational details that can help in effective decision making. Using this style of leadership, that a leader assumes most of the time, unless there is a crisis situation, the leaders allows the team members to become a part of the team and help leaders make better decisions.
In this style, the leader lets employees make the decisions on their own. However, it is not to be mentioned that the leader considers himself responsible for the decisions that are made. This style of leadership is used by a leader very carefully only when the leader is convinced that employees have the required skill sets and the maturity to analyze the situation and determine the course of actions required to resolve a problem or to face a given situation in the most desired and tactful manner. As a leader cannot involve himself in every tactical decision making, he or she must set priorities and delegate tasks.
A good leader uses all three styles, depending on what forces are involved between the followers, the leader, and the situation.
Examples of forces that influence the style to be used:
• How much time is available.
• Are relationships based on respect and trust or on disrespect?
• Who has the information – the leader, employees, or both?
• How well one’s employees are trained and how well one knows the task.
• Internal conflicts.
• Stress levels.
• Type of task. Is it structured, unstructured, complicated, or simple?
As it is apparent from the above paragraphs, no leadership style is right or wrong. No leadership style is better than the other. These styles are affected by business forces and environments. Hence, they’re situational in nature. If a leader feels that his style is completely autocratic or completely delegative then his leadership has not evolved to the level where it can encompass all styles. However, it has been seen that every leader has their own unique approaches to people and projects. It is important to realize that adopting one style can not suffice. In fact, these can be considered as someone’s persona that he or she built through years of conditioning. Only different styles, as mentioned above, may work best at different times, and to achieve different purposes. Leadership styles must change as business environments, team members and goals change around leaders. It would not at all be surprising if a leader uses a range of different styles at different times, in different set ups and with different people in the course of a single day.
Leadership and Management
While we discussed leadership and leadership styles at length, it would be important to discuss a little about the eternal topic of discussion – leadership Vs Management.
To put it straight – Management is more operational in nature whereas leadership is strategic as well as operational. Great managers are great leaders too. But a majority of line managers, follow and effectively implement the vision of the leadership team. Effective management is about planning, establishing the goal, recruiting staff, organizing staff, and closely supervising the project to ensure that the plans are executed flawlessly. Leadership transcends plans and tasks and envisions the future and sets directions. Successful leaders are capable of mobilizing human resources, and inspiring the team to achieve a mission. The leader also ensures that the team is fully motivated while executing the plans.
After learning the meaning of leadership, various leadership styles, how and when to use a particular leadership style; and the basic differences between a leader and a manger, we are well equipped to understand how effective leadership can impact an organization.
Effective Leadership and its Impact on an Organisation
Leaders influence every possible outcome in the organization. These outcomes can be revenue, customer satisfaction, sales, productivity, etc. Good leadership drives a great culture, which ultimately leads to greater performance, and ultimately profits. In this section, we will review the impact of leadership on organizational performance, organizational culture, employee morale and overall organizational effectiveness.
The impact of leaders on organizational culture
Leaders create culture. And culture describes the behavioural norms that have been established through repeated and effective communication from the leadership. Leaders have a powerful influence on an organization’s culture. Leaders set the tone for how employees need to perceive their work. Leadership and culture go hand in hand. It has been seen that leaders’ success depends on their ability to shape and maintain a high performing organizational culture. Effective leadership shapes the employee experience, employee engagement, and wellbeing, all which are critical to a thriving workplace culture.
A truly positive culture is the foundation of every organisation. And positive cultures are built when employees find their work to be meaningful, they receive contant appreciation, their wellbeing is taken care of, and all the employees including the leaders are connected. Employees generally spend more than one third of their lives at work. In lieu of this they get paid. But that is not all they expect. They establish a strong personal connection with the work they do daily. If a group of people are, especially if they are new to the company, are not able to develop the same level of connection, then its the role of a leader to help them find their work meaningful. This in turn will help them establish a personal connection. Similarly, Personal recognition makes employees feel valued – not just in the eyes of their peers and friends, but in the eyes of their leaders and family members too. Wellbeing, the third key component of a positive culture, is more than just physical fitness. In addition to physical wellness, wellbeing also encompasses emotional and social wellness. Lack of connection, meaningful work, lack of recognition and feeling of lack of emotional and social wellness gradually inhibits collaboration and can lead to an overall decreased sense of belonging and purpose at work.
The Impact of Leadership on Organizational Performance
Leaders that inspire and empower team members always have a greater ability to influence the team’s performance. By inspiring and empowering, great leaders build loyalty and trust, which that, in turn, create productive and performance driven culture.
A leader who is engaged with his team is able to discover all sorts of insights. These insights could be related to capability of an individual team member of the team as a whole. These insights could be around a leader’s own communication and leadership support. Similarly there can literally be a number of insights that can help leaders create a high performing team and ultimately a high performing organization. These insights can be around – creativity and innovation, education and knowledge, recognition and well being. Lack of any of these performance drivers can lead to stalled deliveries. Communication with team members to get a pulse on a team’s overall morale can sometimes become a crucial step by a leader to identify a deep-rooted issue and resolving such issues can dramatically impact the performance in a big way.
The impact of leaders on employees morale
Leadership and cultural behaviours influence the work team climate. A great work team climate positively influences employee morale and motivation. And ultimately, employee morale and motivation influences employee well being and organizational performance. The leadership skills exhibited by an organization’s executives often set the tone for employee morale and hence the employee productivity . When leaders sound disengaged, untrustworthy, intelligent, employee morale and performance suffer. But, when leaders are competent, accountable, inclusive, and engaged, team members take notice and feel excited to come to work every day.
A great leader is always engaged, pays attention, is fully present and raises thoughtful questions to draw conclusions. They set the standards for the team’s work by showing individual team members that they are highly competent and are interested in what the team has to say.
Another morale-booster leadership trait is trustworthiness. Leaders can build trust by being open and transparent. They can also demonstrate trustworthiness by leading by example and being someone who can be counted always and the one who keeps his or her word.
Lastly, good leaders always find opportunities to go out of their way and praise employees for their efforts. At times they just praise the sheer efforts even if the results were not as great as expected. This behaviour builds morale as every individual loves to feel valued and recognized. Also, a leader always shares credit with other team members when he or she is successful.
The impact of leaders on organizational effectiveness
Organizational effectiveness is the concept of how effective an organization is in achieving the outcomes the organization intends to produce.
To be fully effective an organization must demonstrate strength in each of the following areas: leadership, decision making and structure, people, work processes and systems, and culture. An effective leader helps establish and communicate clear priorities, make explicit roles and responsibilities, either removes or creates connections across organizational silos, and develops and retains a talent pool.
Great leadership influences overall organizational effectiveness by articulating the vision. Devising a strategy to achieve the vision. Define the culture and commit to the results. Some important components of the strategy towards organizational effectiveness include:
- Building a culture of accountability where individuals and teams take ownership and accountability to deliver on their commitments
- Clear and concise communication with stakeholders, team members, and everyone in the ecosystem to ensure the roles and responsibilities, expectations, etc. And this is understandable that the communication should be two-way so that the leadership doesn’t go into an ongoing autocratic mode
- Leadership must ensure that the team has the required machinery to fulfill their assigned roles in the most efficient and effective way
- Developing and retaining a talent pool is the key to organizational effectiveness. There should be a mechanism to recruit, hire and train quality workforce to ensure seamless implementation and on-time delivery of the smaller objectives in order to achieve the final goal
- Finally, there should be mechanisms in place to monitor performance through industry standard metrics. This is important to identify gaps and take corrective action
Effective leadership can bring transformational changes in an organization. On contrary, lack of leadership can have immense damaging effects on an organization. Great leaders positively impact an organization by building positive work culture, increasing organizational performance by leaps and bounds, improving employee morale, and ultimately increasing organizational effectiveness.