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?

“Leadership listens, inspires, motivates, and gives a direction, a common goal to aspire to,” says Jerome Taillard, associate professor of finance at Babson College.

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 those common goals.

“Leadership matters. It matters today more than ever,” says Raj Sisodia, Babson professor of marketing and the F.W. Olin Distinguished Professor of Global Business. “But, the old way has run its course. Leadership today must be based on purpose, inspiration, caring, and compassion.”

How Do You Define Leadership?

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 new 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.

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 good leadership, according to Marjorie N. Feld, Babson professor of history.

“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.

Why Leadership Skills Are Important

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 help demonstrate why leadership is important.

“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.”

Understanding entrepreneurial leadership and honing the necessary leadership skills are 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

Leadership can manifest itself in many ways. But, the most effective way to show leadership is by focusing 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 Is Leadership Important?

With the right type of leadership and leadership skills, nothing is impossible, according to Taillard. Ultimately, that helps answer the question, “Why is leadership important?”

“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 Research & Insights

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