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Importance Of Leadership Skills In The Workplace

Asavari Sharma

July 05, 2023

Popular leadership expert John Maxwell once said: “A leader is one who knows the way, goes the way, and shows the way.” Leadership is indeed a critical function that helps a business direct its time, effort, and resources to achieve goals that drive growth.

Every professional can benefit from learning about the importance of leadership and contribute meaningfully towards organizational objectives. If you are in recruitment, you can particularly help spot potential leaders for your company.

Adding to that thought, let us take a look at why leadership holds a lot of importance in the workplace, the different types of leadership models, and ways to assess leadership qualities and hire appropriately.

What is the importance of leadership in the workplace?

In addition to providing inspiration, guidance, and direction in a company, leadership nurtures the strengths and talents of the employees and builds teams to achieve organizational goals collectively. Competency management is a strong tool. Here is why one cannot ignore the importance of leadership:

1. Better financial performance

When you have strong leaders at the helm of a business, the priorities of all teams align better with organizational goals, and everyone can execute projects that deliver a powerful financial impact. Good leaders keep tabs on what the business can afford, stay on top of industry-specific financial concerns, and test new revenue streams that can be beneficial in the long run.

2. Increased employee focus

Leadership, in general, provides a vision for the company and articulates what employees can do to achieve it, allowing them to get acclimated to their jobs faster and eliminating the time it takes for managers to explain the way of the job. Good leaders energize employees to be more effective and productive.

3. Greater business agility

Strong leaders are confident about managing organizational change. They remain calm and cool during adjustment periods and clearly explain to the employees why and how the change is occurring. They can also ensure the customers stick with the company and are satisfied while the changes occur.

4. Reduced stress levels

A study by The American Institute of Stress (AIS) reported that stressed employees exhibit 60% higher absenteeism and are significantly less productive at work. A good leader is able to identify what is stressing out employees and find ways to prevent it from happening and resolve any problems that may arise from it. Companies with solid leadership enjoy higher employee retention as the workforce feels supported and motivated by their leaders.

Reasons Why Companies Invest In Leadership Skills

The different types of leadership

Every leader is unique, with different leadership styles that they use to motivate, inspire, and meet goals. Here are the six leadership styles that stand out:

1. Servant

For servant leaders, people always come first. They have a caring nature, which makes them perfect for non-profit organizations and charities. They put the needs of others first and help people develop and perform to the best of their ability.

2. Democratic

A democratic leader considers the entire team’s opinion before making a final decision. This approach helps everyone in a team get involved and motivates them to do what they want - thereby raising productivity and overall efficiency in the workplace. A democratic leader keeps the team dynamics in check.

3. Situational

Situational leaders are highly adaptable and can simultaneously be innovative, charismatic, and authoritative. They can assess a situation and act appropriately and are comfortable managing a struggling business and turning it around.

4. Charismatic

Charismatic leaders use their social skills and enthusiasm to build a shared sense of purpose among employees. They are known to effectively bridge the gap between the lower-level staff and managers and maintain a positive mindset.

5. Collaborative

As the name suggests, collaborative leaders believe in working with others and see value in sharing knowledge. Whether partnering with specialists in a different field or breaking down silos within departments, they seek various ideas and opinions to solve problems and build strategies.

6. Transformational

Transformational leaders constantly strive to improve the organization's processes and habits. They do not just look at the big picture but also at minor details, making them more efficient. Such leaders are better suited for businesses that have lost their competitive edge and want to grow.

Types Of Leadership Skills

Types of leadership skills

The question of what makes a good leader is widely debated. It is true there are born leaders, but anyone can become one by effectively embracing a number of critical skills to enhance their ability to adapt to changing circumstances. Here are a few essential skills that companies look for:

1. Vision

What is a leader without vision? A manager? Maybe. They transactionally ensure all deadlines are met, and goals are achieved. But the departments are minimally engaged in the tasks at hand and may work in silos.

On the other hand, a visionary leader opts for a broader perspective. They can see what it holds, what it looks like, and what work is necessary to get there. They can hold onto the vision even when faced with challenges.

2. Delegation

Leaders do not do everything themselves. In fact, they are not expected to. But how they delegate the work among everyone else is what matters. They are remarkably comfortable assigning tasks to the team while providing strategic direction without being a micromanager!

3. Transparency

Good leaders are transparent in their actions, achieved through effective communication, sound judgment, and inclusiveness. Employees know exactly how decisions are made and how they are affected. Such leadership builds trust within the workforce.

4. Decisiveness

When we think of what makes someone a great leader, one trait that comes to mind is decisiveness. Successful leaders do not appear unclear or uncertain.

They do not make haphazard decisions for the company. Instead, they prioritize what is essential, communicate the same to the team, and get the job done - keeping in view the goals that are important in the long run.

5. Communication

This is the most critical skill a leader can possess. Leaders have to delegate tasks efficiently and inspire and stimulate people working in different departments. They make the workforce feel confident about their abilities and encourage them to do better.

They genuinely listen and empathize, which helps them better manage conflicts at the workplace. In addition, the ability to give constructive feedback helps improve team performance.

6. Self-awareness

Strong leaders are aware of where they lack and the strengths they possess. They use their skills wisely and work on overcoming their weaknesses. They are not afraid to admit their mistakes or ask for help. Personal development is a priority for them.

7. Problem-solving

Who do you turn to whenever you have a problem at work? Your colleague or your manager? The latter, we are sure! Problem-solving is a crucial skill for leaders. They can find solutions for complex and unexpected situations that may negatively impact meeting organizational goals or hamper workforce harmony.

8. Team building and management

A strong leader is a team builder. Realizing what works best for a team with varying personalities and skill sets helps them guide the employees better towards working towards a common business objective. Such leaders focus on building strong interpersonal relationships and trust among the team members.

Types Of Leadership Skills

How to identify leadership potential in the workplace

Conventionally speaking, it is not hard to point out employees who will advance into management roles. It is easy to train someone how to hire when open positions are available, how to tackle budgets and manage project deadlines.

But there is a drastic difference between a manager and a leader, and it is important to note that. If you are hiring, you should guide your recruitment skills on the following components in your candidates:

1. Energy levels

Successful leaders are contagiously energetic and enthusiastic. If they arrive at work - excited and ready to roll - the positivity spreads in the rest of the office. However, if they are distressed, frustrated, or angry, that would affect the overall workforce morale. Who are those employees in your organization who are lively and zestful?

2. The motivators that drive them

True leaders do not just accept the perks of being “a leader.” They are mission-driven and see a greater purpose beyond a fat paycheck. This attitude is constructive during particularly stressful times when they may need to work longer hours or come in during the weekends.

Ask the candidate what appeals to them about the position. If they want to make a difference in the organization and love to inspire others, they showcase leadership potential. If the reasoning is more self-centered, then they might not be an ideal fit for the position.

3. The ability to earn respect from the team

Someone who is a manager without leadership qualities will expect the team to respect them solely because of their title. A true leader will understand that something this inconsequential does not guarantee respect. Therefore, during the interview, it might be worth asking the candidate if they plan to create an open dialogue for everyone in the team to contribute or do they prefer spouting orders.

4. The ability to adapt to a changing environment

Irrespective of the industry you are in, change is inevitable. If a leader runs their business the same way they did a decade ago, the company will stop growing. That is why discussing how a candidate tackles an evolving industry or market is important. How do they grow as professionals and stay on top of new trends and technologies?

5. The ability to assess and use employees’ strengths

A candidate with strong leadership potential will know how to recognize an employee’s strengths and utilize them effectively within the office. For instance, a creative and imaginative person in a cut-and-dry role will get frustrated quickly.

On the other hand, if a leader asks for a few growth ideas for Q3 from a person who loves to crunch numbers, they will not get anything worth presenting. Can the candidate with leadership potential assess employee strengths?

Using Adaface’s scientific aptitude tests to find “leader candidates.”

One of the most effective and unbiased ways to assess leadership qualities is with pre-employment tests. Our aptitude tests, for instance, help screen for situational judgment, communication skills, and leadership capabilities.

The results from these tests help you rank candidates based on how well they delegate authority and task responsibility, plan and support the development of others, and gain acceptance of ideas and plans. To find out more about Adaface, please visit the website.

Asavari Sharma

Asavari is an EiR at Adaface. She has made it her mission to help recruiters deploy candidate-friendly skill tests instead of trick-question based tests. When taking a break, she obsesses over art.

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