Leadership is the act of inspiring others to engage in the tasks needed to achieve a goal. A leader promotes a vision for where the business should be in the future, which also involves making the changes needed to get from here to there. Since change increases the level of risk, leaders must balance the need for change with the increased risk of failure that accompanies those changes. There are far fewer great leaders than great managers, since it requires a truly unique skill set to lead an organization.

The best business leader is able to bring an organization through a difficult period, such as surviving a major industry downturn or shifting to an entirely new business model. Doing so requires the following activities:

  • Tells compelling stories. A great leader is able to fashion a story that links the history of a firm to where it is going, so that employees are energized to follow along.

  • Works through others. He or she searches for help throughout the organization, so that responsibility for the direction and achievements of the firm are spread everywhere in the business. Doing so spreads the workload and may find previously unrecognized talent within the organization.

  • Fosters innovation. There is an ongoing pursuit of better performance within the business, setting goals that are linked to the strategy of the firm.

  • Links efforts to metrics and reward systems. The entire system of performance measurements and rewards is closely aligned with the activities that the manager wants employees to complete.

  • Builds up talent from within. The business is continually searching for talented people within the business and expanding their experiences and skills. Doing so makes it much easier to grow the organization from within. A great leader leaves behind a solid corps of leaders who can seamlessly take over the organization after she leaves.

In order to successfully complete these activities, a great leader must be willing to relentlessly push the organization to meet performance targets, to provide guidance to those who need it, and to remove some people who are not able to meet the firm’s performance metrics.

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