What Is Leadership?

Definition & Examples of Leadership

Leadership

The Balance / Theresa Chiechi

Leadership is the art of motivating a group of people to act toward achieving a common goal. In a business setting, this can mean directing workers and colleagues with a strategy to meet the company's needs.

Here's what you need to know about leadership, and some examples of how it can benefit businesses.

What Is Leadership?

Leadership captures the essentials of being able and prepared to inspire others. Effective leadership is based upon ideas—both original and borrowed—that are effectively communicated to others in a way that engages them enough to act as the leader wants them to act.

A leader inspires others to act while simultaneously directing the way that they act. They must be personable enough for others to follow their orders, and they must have the critical thinking skills to know the best way to use the resources at an organization's disposal.

  • Alternate definition: Leadership may also refer to an organization's management structure.

How Does Leadership Work?

In business, leadership is linked to performance, and any leadership definition has to take that into account. Therefore, while leadership isn't intrinsically linked to profit, those who are viewed as effective leaders in corporate contexts are the ones who increase their company's bottom line.

If an individual in a leadership role does not meet profit expectations set by boards, higher management, or shareholders, they may be terminated.

While there are people who seem to be naturally endowed with more leadership abilities than others, anyone can learn to become a leader by improving particular skills. History is full of people who, while having no previous leadership experience, have stepped to the fore in crises and persuaded others to follow their suggested course of action. They possessed traits and qualities that helped them to step into roles of leadership.

Leadership vs. Management

Leadership vs. Management
Leadership Management
May or may not be a manager May or may not be a leader
Must inspire followers May or may not inspire those under them
Emphasizes innovation Emphasizes rationality and control
May be unconcerned with preserving existing structures Seeks to work within and preserve existing corporate structures
Typically operates with relative independence Typically a link in the corporate chain of command
May be less concerned with interpersonal issues May be more concerned with interpersonal issues

The terms leadership and management tend to be used interchangeably, but they're not the same. Leadership requires traits that extend beyond management duties. Both leaders and managers have to manage the resources at their disposal, but true leadership requires more. For example, managers may or may not be described as inspiring by the people working under them, but a leader must inspire those who follow them.

The concepts mentioned here are generalities and don't address every type of leader or manager. Many managers are leaders and vice versa—but not all are.

Another difference between leaders and managers is that leaders emphasize innovation above all else. Whereas a manager seeks to inspire their team to meet goals while following company rules, a leader may be more concerned with setting and achieving lofty goals—even at the expense of existing corporate structures. When a worker has a radical new idea for how to tackle an issue, a leader is likely to encourage that person to pursue the idea.

Managers may be more likely to preserve existing structures because they themselves operate within that structure. They may have bosses above them, so they have less freedom to break rules in the pursuit of lofty goals. Leaders, on the other hand, often operate fairly independently. That allows them to tolerate a greater amount of chaos, so long as they believe it will be worth it in the end.

However, the leader's devotion to innovation can sometimes come at a cost. Chaos and high-pressure work environments can create interpersonal issues. When such issues arise, a manager is more likely to see it as their duty to smooth over problems between employees. Leaders can sometimes be so singularly focused on achieving lofty goals that they let interpersonal issues and employee welfare fall to the wayside.

  • Leadership is the art of motivating a group of people to act toward achieving a common objective.
  • Organizations refer to upper-level personnel in their management structures as leadership.
  • To be an effective leader in business, you must possess traits that extend beyond management duties.
  • Leadership skills can be learned and leaders may evolve.
  • A person may be referred to interchangeably as both a "leader" and a "manager," though the two terms are not necessarily synonymous.