What Is Organisational Leadership? (Benefits and Components)

By Indeed Editorial Team

Published 14 September 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Leaders play important roles in a variety of organisations and have the power and ability to influence decisions and enact change. Organisational leadership is an approach to management that companies can use to empower their workforce, facilitate employee growth and contribute to a company's success. Understanding what organisational leadership is and what its benefits are can empower you to become a better leader. In this article, we provide a definition of organisational leadership, examine its benefits and key components and list steps that you can follow to improve your leadership skills.

What is organisational leadership?

Organisational leadership is a process of reviewing the management of an entire organisation and trying to understand how to align the goals of individuals with the company's vision. A key factor in effective organisational leadership is combining outstanding management practices with an in-depth knowledge of human psychology.

The best organisational leaders understand the abilities and skills of their staff and use that knowledge to help the company succeed. They manage the present situation with a vision for the future. Organisational leaders understand what the strengths of their entire workforce and company are, what areas of opportunity for improvement exist in the daily operations and how to implement changes that encourage positive growth and productivity.

Related: 10 Leadership Role Examples (With Functions of Leadership)

Components of organisational leadership

Organisational leadership is a multi-faceted leadership style that involves collaboration and communication with an organisation's employees. Here are some factors that positively contribute to organisational leadership:

Leadership

One goal of organisational leadership is to help employees grow to become the next leaders. A good leader is able to observe those under them, identify positive traits in them and assess their leadership potential. They then train them and develop their characteristics so that they can become successful leaders. An effective leader often models their values to the team through their actions, decisions and speech.

Related: What is Leadership? (With Key Elements of Leadership)

Ethics

Since organisational leadership involves analysing and guiding an entire company, it's important that you make ethical choices that can benefit all team members. This means considering what's right for employees when making decisions. To build trust, it's important that organisational leaders are straightforward and honest with employees, and that they model the same ethical traits they expect their employees to demonstrate to foster positive, lasting relationships.

Related: What Is a Code of Ethics in Business? (With Examples)

Communication

Communication is a two-way process of speaking and listening. When an organisational leader listens, they also observe the speaker's body language to interpret its meaning. Effective listeners develop an emotional connection when they're communicating with someone. Organisational leaders try to understand others' perspectives and find a common ground. People trust leaders who communicate with empathy.

Talent recognition

A large part of organisational leadership is learning how to best utilise each employee's unique talents. Organisational leaders can identify a team member's strengths to ensure that they're in the right role. This also means finding areas of opportunity for teams to improve and providing resources and opportunities for employees to develop new skills. Organisational leaders are constantly searching for the next group of individuals capable of becoming effective leaders. They provide mentoring services when possible to help employees determine their career paths, seek opportunities to reach their full potential and achieve professional goals.

Related: Can Leadership Be Taught? (With Definition and Strategies)

Perspective

To have a thorough understanding of how people work, organisational leaders aim to view ideas and challenges from other people's perspectives. Diversity in beliefs, opinions and attitudes can all influence a person's actions, and the ability to identify each can help make an organisational leader more effective. Perspective can also help an organisational leader better understand the needs of their team. When they can view challenges from the perspectives of other employees, they can connect and empathise to help solve the problems.

Benefits of organisational leadership

There are many benefits that organisational leadership can bring to an organisation. Some of the key benefits include:

Improved employee morale

Under an effective leader, employees can feel like someone recognises their skills and abilities. Organisational leaders acknowledge the contributions and efforts of their subordinates while providing mentorship and coaching. Some employees may also receive training to become future leaders. When employees receive such opportunities for growth and personal development, their morale may also improve, and they may feel that their work is meaningful.

Healthier workplace culture

Organisational leaders are typically receptive to feedback. They tend to foster a culture of open communication in the workplace. As a result, employees are able to speak with them about any personal or professional concerns that they might have without fear of any repercussions. This helps foster a healthier workplace culture.

Higher employee productivity

Improved employee morale and healthier workplace culture can contribute to higher productivity among a company's employees, as they make employees feel happy about working for an organisation. In turn, they might be willing to contribute more time and effort to the work that they do. This can help a company achieve its business goals.

Increased organisational efficiency

An organisational leader can also help an organisation achieve greater efficiency in its daily operations and processes. Organisational leaders are often open-minded and receptive to new perspectives and solutions. Because of this, they may be keen to adopt new practices that may improve the effectiveness of an organisation's tools and resources. This can contribute to increased organisational efficiency.

Related: What Is the Importance of Leadership? (Plus Purpose)

How to improve organisational leadership effectiveness

Understanding how to improve the effectiveness of your organisational leadership can help you become a better leader and increase the benefits of this leadership system for the entire organisation. The following are some steps that you can follow to improve your effectiveness as a leader:

1. Gather feedback from stakeholders

A good first step to improving your leadership effectiveness is to gather feedback from different stakeholders. Depending on your position in an organisation, these stakeholders can include your superiors, subordinates and other individuals you work closely with. You can have direct conversations with the relevant parties or have them complete appraisal forms. Requesting periodic feedback from these stakeholders, specifically regarding your leadership and management style, can help you identify your strengths and weaknesses, gain new perspectives on the way your team views your leadership style and develop effective plans for your continued growth.

Related: Why Is Leadership Training Important? (With Benefits)

2. Identify areas for improvement

Once you've gathered feedback from the relevant stakeholders in the organisation, you can identify areas for improvement. For example, if many stakeholders report that they would like access to more open channels for voicing their thoughts and opinions, you might decide that working on your communication skills is beneficial for your success as a leader. Once you've identified the most common areas of opportunity for improvement, rank them according to priority.

3. Create an improvement plan

Next, create a plan for each of your areas for improvement, starting with the most important one. When creating an improvement plan, it's beneficial to include tangible steps and measurable, achievable goals. For example, if you want to improve the effectiveness of your communication, you can implement an anonymous feedback system and challenge yourself to objectively consider each suggestion or set yourself a goal to hold a specific number of town hall meetings each month. You can also check back with the stakeholders regularly to see how well your improvement plan is working.

4. Attend leadership development programmes and courses

You can also attend professionally run leadership development programmes and courses to help you gain a new perspective on leadership. This can help you learn different ways to hone your leadership skills that can contribute to your effectiveness as an organisational leader. You can check with your organisation to see if they might sponsor you as an attendee to such programmes. Many organisations send leaders at different levels of the hierarchy to such programmes because of the benefits that effective leaders provide.

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