What Is Business Leadership? Definition, Skills of Effective Leaders

By Indeed Editorial Team

Updated May 17, 2022 | Published February 25, 2020

Updated May 17, 2022

Published February 25, 2020

Related: How To Choose a Career Based on Your Interests

Jenn shares advice for finding a path that you will love using three questions: "What's important to me?" "What do I want next?" "What should I do now?"

Strong business leadership is a vital part of every successful company. A team with strong, skilled leadership is more likely to be productive than one without. If you are interested in being an effective leader, you will need to know what strong leadership looks like in the workplace. In this article, we will define business leadership, discuss several key leadership skills and offer suggestions for improving those qualities.

Read more: The Concept of Leadership Explained: Cultivating Effective Leadership

What is business leadership?

Business leadership refers to how individuals make decisions, set goals and provide direction in a professional environment. Business leadership can take many different forms, but usually involves a CEO or higher-level employees guiding and inspiring the rest of the team. The goal of business leadership is to find the leadership model that works best for a particular company and its team of employees.

There is always a need for strong leaders in business. No matter what your job title is, you can be a business leader if you have the right skills. If you can show your competence as a leader and an affinity for leadership roles, you will likely be given opportunities to use those skills to lead a team or project. Growing in your understanding of business leadership and what it takes to be a good leader can help you become a more valuable asset in any workplace.

Read more: Business Development Skills: Definitions and Examples

11 qualities and skills for business leaders

Several specific qualities are associated with strong leaders. Most involve your ability to accomplish tasks efficiently, influence others to perform well and consistently meet and exceed expectations. Some are personality qualities that you already possess while others are skills that might need development. Here are some of the most common qualities and skills seen in successful business leaders:

Self-motivation

A successful leader should be able to take initiative, which involves being able to complete tasks without asking for guidance or assistance. As you become more competent and skilled in your role, you will likely need less supervision.

Self-motivation involves completing a project or task on time without the constant encouragement or direction of a manager. If you can carry out your assigned duties and also take the initiative to go above and beyond what was asked of you, you will quickly set yourself apart as a leader.

Related: Initiative Skills in the Workplace

Organization

Effective leaders recognize the importance of being organized in the workplace. They adhere to schedules, meet deadlines consistently and follow through with promised results. Organized leaders can keep track of multiple assignments and projects at once. If a business has an organized leader, the entire team is more likely to perform well and function efficiently.

Related: What Are Organizational Skills: (With Examples)

Delegation

A critical skill for leaders is the ability to delegate tasks to other members of a team. It also requires leaders to recognize when someone else may be more capable or have more time to accomplish a particular task. To be able to delegate, a leader must know their team well enough to be aware of their strengths and weaknesses. Delegation also allows leaders to offer leadership roles to other promising employees. Leaders who delegate are better equipped to maximize their team's potential and efficiency.

Related: Guide to Delegation in Leadership

Communication

Good communication skills are a vital part of being a capable leader. In the workplace, efficient communication is often the foundation of a productive team. Leaders should set an example for their teams by creating open and efficient channels for communication. They must also be able to listen actively and speak confidently. Leaders who can effectively communicate their vision, address issues and exchange ideas with their team members are more able to foster a productive work environment.

Read more: Communication Skills: Definitions and Examples

Responsibility

Responsibility is one of the most sought-after skills in a leader. Taking responsibility means accepting the consequences of one's actions whether positive or negative. A responsible leader views every success and failure of their team as if it were their own. Leaders speak on behalf of their teams and strive to make decisions with its best interests in mind. Responsible leaders accept every aspect of their role and work hard to both remedy mistakes and reward triumphs.

Related: The Difference Between Accountability and Responsibility

Goal setting

Strong business leadership involves the ability to focus on a vision for the future. Business leaders must set strategic goals to help the company succeed and grow. One of the primary functions of business leadership is to encourage all employees to work together to accomplish common goals. Setting achievable, meaningful objectives and communicating them effectively to the rest of the team is one of the most important tasks a business leader has.

Read more: SMART Goals: Definitions and Examples

Risk-taking

Effective leaders understand that the business world can be challenging. They aren’t afraid to take risks and be innovative to solve those challenges. Good leaders use data to make their decisions even when they are risky or unconventional.

Related: Business Risks: Definitions and Examples

Integrity

A team’s success relies heavily on the integrity of its leader. It involves the leader’s honesty and commitment to do the right thing even when it is difficult. Leaders with integrity lead by example. take pride in their work and deliver positive results.

Related: A Guide To Business Integrity (With Tips)

Curiosity

Good leaders constantly look for new ideas and innovative solutions to move their company or team forward. The willingness to try new things can create inspire and encourage others to also be forward thinkers.

Related: 7 Creativity and Innovation Examples

Interpersonal skills

A good leader makes an effort to know their team personally. This means taking the time to talk to their coworkers and provide guidance. Interpersonal skills involve the ability to successfully navigate conversations, meetings and other workplace interactions. Leaders with strong interpersonal skills can address disagreements, negotiate compromises and encourage productivity within their team.

Related: Interpersonal Skills: Definitions and Examples

Self-awareness

Before you can identify strengths and weaknesses in others, you must be able to do the same for yourself. Good leaders recognize what they can and cannot do well and then, take action to improve. Showing vulnerabilities inspires team members to step up and possibly become leaders themselves.

Related: The Importance of Self-Awareness in Leadership

12 types of business leadership

There is no one way to be a good business leader. What you bring to the role and how you lead will be different from someone else. There are several different types of leadership, so it’s important to choose what works best for you. Here are some effective leadership styles to consider:

1. Authoritative leadership

Authoritative, or autocratic, leaders make decisions on their own without input from others. This type of leadership focuses on having full control over team decisions. They may be quick to make decisions even when the ideas aren’t popular with team members. An authoritarian leader carefully manages their team's work and pays close attention to whether each person is meeting their expectations.

2. Bureaucratic leadership

Bureaucratic leaders set strict policies and procedures for themselves and their teams. This type of leadership involves a sharp focus on results and performance, asserting a strict chain of command and answering to the board of directors and/or shareholders. A bureaucratic leader creates non-negotiable processes, holding employees to a clear set of metrics and objectives which allows the manager to track results.

Related: How To Be a Leader

3. Democratic leadership

Democratic, or participative, leaders seek out team input when making decisions. Although they are responsible for the final decision, they also consider others’ opinions which encourages feedback, consensus and engagement among the team.

4. Laissez-faire leadership

Laissez-faire, or “delegative,” leaders oversee projects but allow team members to make decisions for themselves and self-manage workflow. They provide support and encouragement when necessary but do not tell employees what to do or how to do it.

5. Servant leadership

Servant leaders focus on the needs of their teams without defining them by roles or titles. Employees feel heard and cared for as equals. Servant leadership could result in slower decision-making since the focus is team members first and company second.

Related: Servant Leadership Style Explained

Jenn explains the Servant leadership style in management and provides examples to help you identify if this style is right for you.

6. Strategic leadership

Strategic leaders influence those around them to embrace a collective vision. They determine what strategies and methods will help their company remain competitive.

7. Transactional leadership

Transactional leaders believe employees should do whatever is assigned to them and expect them to carefully follow their orders. Rather than trying to help their team members grow, transactional leaders are solely focused on making sure everyone is meeting their quotas or expectations.

8. Transformational leadership

Transformational leaders focus on transforming teams and companies to be their best. They create a vision and share it with their team so everyone is working toward the same goal. A transformational leader inspires positive change in the workplace and provides their team with the tools they need for success.

Related: How To Demonstrate Leadership Skills at Work

How to improve business leadership skills

1. Find a role model or mentor

Often, the first step in becoming a more effective leader is finding a strong leader to emulate. Seek out an accomplished leader in your network and talk to them about how they achieved success. Ask about their personal and professional goals and the path they followed to get to their current position.

2. Take a leadership assessment

Leadership assessments can help you hone your managerial strengths, increase your self-awareness and advance your careers. They can help you analyze your leadership traits and strengths and pinpoint areas for improvement. Familiarity with these tools may help you move your career forward. Many hiring managers use the assessments to determine potential leadership styles or attributes for those applying to leadership positions.

3. Seek out leadership opportunities

The key to improving as a leader is often practice. Look for opportunities to hold leadership positions in your community. This could be at work, in your church or with another group in your personal network. Taking the lead can provide you with valuable experience and equip you for future opportunities.

4. Volunteer for more responsibility

If there are no leadership opportunities available at your workplace, you can still show your capabilities by volunteering to take on more responsibility. This could mean offering to help with a project, tackle a new task or even take on a new role. If you show a willingness to serve, you are likely to earn the attention of your team's current leadership.

Read more: Leadership Ideas: 25 Characteristics To Improve Leadership

Related: Pacesetter Leadership Style Explained

Jenn, a Career Coach, explains the Pacesetter leadership style in management and provides examples to help you identify if this style is right for you.


Explore more articles