What You Need to Know About Leadership Development

Leadership is usually defined in terms of a person’s status in an organization. If people have leadership titles, then they must have the leadership skills, right?

Wrong.

What makes a good leader?

People typically advance in organizations by pleasing their bosses with displays of loyalty and technical knowledge. Performance appraisals reflect how much supervisors like their subordinates. Consequently, so-called high performers are often more skilled at office politics than leadership.

Evolutionary theory suggests an alternative definition of leadership. For two million years, humans lived in egalitarian hunter-gatherer societies with constant warfare. Leadership probably evolved as a mechanism that allowed normally selfish individuals to pull together for a common purpose — to compete with neighboring groups to defend territory and resources.

Therefore, leadership should be defined as the ability to build and maintain a team that can outperform the competition. Leadership is a resource for the group, not a source of privilege for incumbents. Leadership should be defined and evaluated in terms of the performance of the team, which depends on how the subordinates perceive the leader.

This definition has three useful consequences: First, it clarifies the meaning and function of good leadership. Next, it makes it possible to define bad leadership. Finally, it makes it easy to evaluate leader performance.

What is effective leadership?

If leadership is the ability to build an effective team, then a good leader must be someone others are willing to follow. People look for four essential characteristics in leaders: integrity, judgment, competence, and vision.

1. Integrity – People need to know that the person in charge won’t take advantage of their position by lying, stealing, playing favorites, or betraying subordinates. Unfortunately, many leaders do. Integrity is the most important characteristic of good leaders. Once a subordinate loses trust in a leader, the relationship can never be repaired. In a survey of more than 1,000 individuals, 81% said trustworthiness was the most important personality characteristic of their all-time best boss. Conversely, 50% described their worst boss as deceitful. Trust in one’s superior predicts the entire range of desirable outcomes: productivity, job satisfaction, and organizational commitment.
2. Judgment – The success or failure of organizations depends on decision-making. Judgment has two parts: pre- and postdecision. Most business failures are the result of bad decisions compounded by unwillingness to evaluate decisions and change direction. The welfare of subordinates directly depends on the judgment of their superiors, and some people have better judgment than others.
3. Competence – Good leaders are perceived as knowing what they are talking about, as being competent in the team’s business. In hunter-gatherer tribes, leaders are distinguished by their moral qualities, their judgment, and their superior hunting ability. In business, subordinates see leaders who lack business acumen as empty suits, and they are unwilling to follow them. Our survey showed that 48% of respondents described their best boss as good at business strategy.
4. Vision – Good leaders explain to their team the significance of their mission and how it fits into the larger scheme of the organization’s objectives. This vision clarifies roles, goals, and the way forward, thereby facilitating team performance. By adopting a vision, people can transcend their selfish interests and develop impersonal ends for their actions.

What is bad leadership?

Despite the importance of leadership for effective team performance, research indicates that two-thirds of the managers in the corporate United States — throughout business, government, education, and healthcare — are ineffective or incompetent. Their behaviors undermine employees’ trust, so ultimately they will fail because they are unable to build or maintain high-functioning teams.

Why does leadership matter?

Leadership directly impacts employee engagement. Good leadership creates engaged employees; bad leadership leaves employees alienated and demoralized.

Engaged employees are energized, proud, enthusiastic, and positive at work. Companies whose employees are engaged show higher returns on assets, are more profitable, and yield nearly twice the value to their shareholders compared to companies characterized by low employee engagement.

Disengagement, on the other hand, results in an estimated $300 billion in lost productivity in the U.S. each year.

The bottom line: leadership creates engagement, higher employee engagement equals better organizational performance, and lower employee engagement equals worse organizational performance.

How to be a better leader

Personality assessment provides companies with the tools to identify and develop talented leaders, boost employee engagement, and drive business results.

Personality should be defined in two ways: identity and reputation. Identity is personality from the inside, or how you see yourself. Reputation is personality from the outside, or how others see you.

For most people, a gap exists between who they think they are (identity) and how others perceive them (reputation). As a result, they often seem to say one thing and do another. This gap corrodes relationships and inhibits leaders’ ability to inspire followers.

Personality assessment, feedback, and targeted coaching can provide individuals with strategic self-awareness, which is a better understanding of their strengths and weaknesses, how they relate to those of their peers, and how they are likely to affect their performance.

Leadership is the most important single factor determining success in business. When good leadership exists, organizations and individuals prosper. Bad leadership is almost always accompanied by corporate corruption, bankruptcy, and business disasters.

Defining leadership as the ability to build and maintain high-performing teams allows companies to identify good leadership, avoid destructive leaders, focus development, boost engagement, and improve performance.