Why Is Leadership Important?

A green paper boat leads a fleet of white paper boats

Leadership takes on many dimensions and encompasses many definitions. 

Organizations of all kinds focus on leadership as a vital concept necessary for success. Everyone talks about leadership, everyone says they want leadership, everyone prioritizes leadership. 

But, why is leadership important? And why is leadership important in business? 

Why Is Leadership Important?

“Leadership listens, inspires, motivates, and gives a direction, a common goal to aspire to,” says Finance Professor Jerome Taillard, who also is the first recipient of the Professor George Troughton Term Chair in Finance at Babson College. 

Leadership comes in many forms and constructs, including transformational leadership, servant leadership, and entrepreneurial leadership, which helps to understand and define leadership itself. So says Associate Professor of Organizational Behavior Scott Taylor, the Arthur M. Blank Endowed Chair for Values-Based Leadership at Babson College’s Arthur M. Blank School for Entrepreneurial Leadership. 

“I rarely speak of a leader as simply someone who holds a position of authority,” Taylor says. Instead, he’s focused on the sustainability of influence over time and how that occurs. True leaders, he says, are able to maintain power and influence because they genuinely are supported by willing followers. 

Leadership, especially entrepreneurial leadership, is increasingly in demand as weighty, global issues require entrepreneurial leaders to seek creative solutions and harness the power of people to reach common goals. Great leadership provides a unified vision for an organization to collaboratively achieve company-wide goals. 

The key for positive results of that influence and those followers, though, is the purpose of their objectives and how the leader pursues them. And, that helps distinguish great leadership, according to Marjorie N. Feld, Babson professor of history. 

Why Is Leadership Important in Business?

Within an organization strong leadership is important in shaping a cohesive vision and cultivating a sense of the greater good for the organization. Strong business leaders establish a tone while motivating and inspiring others through trust and purpose so that everyone within the organization is rowing together to achieve a common goal.  

Additionally, leaders must be adaptable. Not everything can be planned and it’s those moments when good leaders can showcase their strength to their team.  

“Good leadership is defined by modeling ethics and inclusiveness,” Feld says. “Guided by a strong moral compass, leaders must be open to every learning opportunity.” Those opportunities could be when facing a public health crisis or accommodating a student whose needs differ from most others. Good leaders, she says, support and advance justice, and stay this course even when tested. 

Interested in improving your entrepreneurial skills? Read more about Babson’s entrepreneurial mindset in education.

Why Leadership Skills Are Important

Leaders provide inspiration and organizational guidance for broader teams. Leadership skills are important for many reasons including: 

  • Improving team morale 
  • Improving Company Culture and Working Environments  
  • Enabling Innovation 
  • Inspiring Confidence and Growth 
  • Enhancing Communication and Resolving Potential Conflicts 


Leadership can come naturally, but it’s not necessarily innate. Leadership can be learned through leadership development programs, where leadership skills are created, developed, and improved through rigorous education and practice. Those skills can highlight the importance of a leader in an organization. “Leadership is often associated with top management, but leadership can occur anywhere,” Taillard says, citing good teachers and good students as exhibiting leadership skills. “It is taking initiative, it is showing interest, it is pursuing a mission to serve a greater purpose, or greater good.” 

And, while leadership isn’t limited to the C-Suite, it’s hard to overstate the importance of a leader in an organization. 

Understanding the entrepreneurial leadership mindset and honing necessary leadership skills are all important to becoming an entrepreneurial leader, able to identify, address, and help solve complex problems with empathy. 

“All entrepreneurial leaders are good opportunistic problem solvers,” says Jay Rao, Babson professor of operations management. He says entrepreneurial leaders are good risk managers, good at scenario planning, and prepare for eventualities and crises. “When there is great external turbulence and chaos, entrepreneurial leaders provide an island of certainty and calm for their employees and/or citizens.” 

How to Show Leadership

A great leader is one that can demonstrate strong leadership not solely through verbal communication. There are several techniques to show strong leadership to your team including: 

  • Listen intently and learn from what you are hearing 
  • Empower your team with positive reinforcement and coaching 
  • Become an expert at your role 

Leadership can manifest itself in many ways. But, the role of a good leader is to focus on positive solutions, says Babson Professor of Management Nan Langowitz, the faculty director at the Center for Engaged Learning and Teaching. 

“We often hear advice to ‘lead by example,’ but it’s essential to ask what that example should be,” Langowitz says. “In today’s social media world of ‘brand me,’ leadership needs to remain focused on creating positive solutions that create true economic and social value. It’s the solution that should matter, not the leader. 

“A true sign of leadership is the organization’s or team’s ability for consistent high performance, even when the original leader has moved on,” she continues. “If there has truly been an investment in the people and purpose of the team, they should be well equipped to carry on successfully. In organizations, these skills and approaches become embedded in high-performance culture, but leaders need to set and reinforce the positive tone.” 

Why Effective Leadership Is Important

Strongly effective leaders are often identified as great communicators who display empathy and emotional intelligence along with the integrity to stand up for what is right. They balance those traits with confidence and self-awareness which helps them stay focused and prevent egos from getting in the way. 

With those kinds of effective leaders, nothing is impossible, according to Taillard. Ultimately, that answers weighty questions such as, “Why is leadership important?” And, “Why is integrity important to leadership? 

“With good leadership, you can create a vision and can motivate people to make it a reality,” Taillard says. “A good leader can inspire everyone in an organization to achieve their very best. Human capital is THE differentiator in this knowledge-based economy that we live in. So, leadership needs to attract, inspire, and ultimately retain as much talent as possible. 

“If you inspire people, if you can create the right conditions, you can get much more out of people, and achieve wonders.” 

Posted in Entrepreneurial Leadership, Insights, Outcomes

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