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Top 10 Reasons Why Leadership in Business is Important

Updated: Sep 26

Leadership is an important asset in any business. It has always been touted that leadership is born not made but we beg to differ. Not only is leadership a skill that can be cultivated, it is also rarely about ego but a means to get the greatest number of people happy. There are many definitions of leadership out there and they keep evolving.


According to Harvard Business Review, leadership was once defined as an exercise of force and power and even a possession of some kind of extraordinary analytical skills. This has since been refuted with many authors changing that outlook. In fact, the work of W.C.H. Prentice shaped the fundamental modern outlook of leadership with his 1961 article defining leadership as the ability to accomplish a goal by directing human assistants. This means that in business, a leader had to give employees an opportunity to learn and grow while motivating them to support the company’s goals.


Leadership only takes the energy to face challenges and take on problem-solving. However, just starting a business or even taking on a supervisory role will not automatically make you a goof leader. There are many leadership styles with different combinations of attributes that will make it possible for a leader to effectively guide their business.


Why Leadership is Important


1. Guides the Business to Achieve Its Vision and Goals

It is imperative to understand the importance of leadership in business. As CEO Institute puts it, it is the major determinant to everything working seamlessly. All successful organisations often have effective well-trained leaders to deliver the company’s KPIs AND GOALS. They are therefore an important ingredient when preparing the recipe for the business’s success. This includes formulation of strategic directions, taking charge of communication and motivating employees and being agile and resilient in the constantly changing world of business.


2. Helps the Business in Overcoming Obstacles

An apt way of defining how important leadership is to business is thinking about the many different obstacles and process of running a business. It is easy in the course of trying to overcome such obstacles, to lose site of the main objective. This is because employees and partners can be lost in the detail but a leader should steer them back to the main picture. Therefore, "a leader steers the ship towards the vision."


3. Offering Guidance and Support

Beside enabling all the stakeholders to stay in sight of the goals, a leader’s role sis also to guide and support the business through changes. As mentioned earlier, the business environment is an ever-changing world and hence, it may necessitate strategic and operational change and hence, leaders need the right communication, strategy and management skills to offer guidance and support to employees by reassuring them and minimizing resistance.


4. Delegating Responsibility

Effective delegation is an important aspect of leadership. It shows that you trust your employees who are then motivating to validate that trust. The key to effective delegation is in balance. You don’t want to delegate too much or too little as this affects productivity within the organization. In fact, delegating too little will result in employees taking advantage of you and on the other hand, delegating too much can cause resentment. A key indication of strong leadership therefore, lies in knowing what you can delegate versus what you can handle.


5. Boosting the Morale

How you treat employees affects their morale and as a result, productivity. A good leader therefore also takes into account the well-being of their employees to ensure that they are not experiencing professional stress levels that may affect their performance. Staff who A

are stressed out an unhappy may leave and this results in a high staff turnover which bleeds money and lowers productivity. Doing right by your staff will sponsor productivity.


6. Problem-Solving

Besides solving any issues that affects your employees, leaders should listen to the concerns of their employees and get ahead of problems. Seeing their value and investing in their learning will give them opportunities for development. In turn, this gives them the necessary skills they need to perform better and also boosts the morale of the entire team resulting in happier and more productive workers. In this way, leadership is important because it helps create a positive environment and job satisfaction which improves retention and favourably affects the bottomline.


7. Initiate Action

As a leader, one of the greatest tasks is to initiate action. A leader who grows their business plans out what tasks need to be done, who to perform them, when to complete them and how to complete them. If a business lacks good leadership to plan and initiate tasks, then this will result in failure to accomplish the business’s growth.


8. Rewarding and Acknowledging Employees’ Efforts

Another way to also initiate action is buy taking into consideration employee’s ideas and input regarding processes, expansion and different ways to solve problems. Then, offering recognition and reward for such contributions is also great for overall performance. A good leader knows how to turn ideas and draw from their employees to create other avenues of income. This is part of initiating action to grow your business to greater heights.


9. Motivating Employees

In business, human resources make the organization’s goals come to fruition by executing different tasks. Motivating the employees to work in pursuit of the business’s goals is therefore a key element of leadership that is of utmost importance to the business. Some leaders use inspiration as a way of motivation while others use the fear of consequences of failure to drive the employees to work hard. Suffice to say that the former works better but that depends on your organization culture as well as the management style.


10. Celebrating Successes and Failures

Celebrating successes instead of treating them like an expected part of normal business will give everyone a reason to be happy in their work and make them feel motivated to continue working.

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