Business Leadership

Traits of Effective Leaders

Being a good leader is often a key success factor that determines whether an entrepreneur will succeed or fail. In this article, we take a look at the characteristics of good business leaders.

What does it take to be a good business leader? Do you have what it takes to lead a business?

Over the past several years, one of the most important contributions psychology has made to the field of business has been in determining the key traits of acknowledged leaders.

Psychological tests have been used to determine what characteristics are most commonly noted among successful leaders. This list of characteristics can be used for developmental purposes to help managers gain insight and develop their leadership skills.

The increasing rate of change in the business environment is a major factor in this new emphasis on leadership. Whereas in the past, managers were expected to maintain the status quo in order to move ahead, new forces in the marketplace have made it necessary to expand this narrow focus. The new leaders of tomorrow are visionary. They are both learners and teachers. Not only do they foresee paradigm changes in society, but they also have a strong sense of ethics and work to build integrity in their organizations.

Raymond Cattell, a pioneer in the field of personality assessment, developed the Leadership Potential equation in 1954. This equation, which was based on a study of military leaders, is used today to determine the traits which characterize an effective leader. The traits of an effective leader include the following:

• Emotional stability. Good leaders must be able to tolerate frustration and stress. Overall, they must be well-adjusted and have the psychological maturity to deal with anything they are required to face.
• Dominance. Leaders are often times competitive and decisive and usually enjoy overcoming obstacles. Overall, they are assertive in their thinking style as well as their attitude in dealing with others.
• Enthusiasm. Leaders are usually seen as active, expressive, and energetic. They are often very optimistic and open to change. Overall, they are generally quick and alert and tend to be uninhibited.
• Conscientiousness. Leaders are often dominated by a sense of duty and tend to be very exacting in character. They usually have a very high standard of excellence and an inward desire to do one's best. They also have a need for order and tend to be very self-disciplined.
• Social Boldness. Leaders tend to be spontaneous risk-takers. They are usually socially aggressive and generally thick-skinned. Overall, they are responsive to others and tend to be high in emotional stamina.
• Tough-mindedness. Good leaders are practical, logical, and to-the-point. They tend to be low in sentimental attachments and comfortable with criticism. They are usually insensitive to hardship and overall, are very poised.
• Self-assurance. Self-confidence and resiliency are common traits among leaders. They tend to be free of guilt and have little or no need for approval. They are generally secure and free from guilt and are usually unaffected by prior mistakes or failures.
• Compulsiveness. Leaders were found to be controlled and very precise in their social interactions. Overall, they were very protective of their integrity and reputation and consequently tended to be socially aware and careful, abundant in foresight, and very careful when making decisions or determining specific actions.

Beyond these basic traits, leaders of today must also possess traits which will help them motivate others and lead them in new directions. Leaders of the future must be able to envision the future and convince others that their vision is worth following. To do this, they must have the following personality traits:

• High Energy. Long hours and some travel are usually a prerequisite for leadership positions, especially as your company grows. Remaining alert and staying focused are two of the greatest obstacles you will have to face as a leader.
• Intuitiveness. Rapid changes in the world today combined with information overload result in an inability to "know" everything. In other words, reasoning and logic will not get you through all situations. In fact, more and more leaders are learning to the value of using their intuition and trusting their "gut" when making decisions.
• Maturity. To be a good leader, personal power and recognition must be secondary to the development of your employees. In other words, maturity is based on recognizing that more can be accomplished by empowering others than can be by ruling others.
• Team Orientation. Business leaders today put a strong emphasis on team work. Instead of promoting an adult/child relationship with their employees, leaders create an adult/adult relationship which fosters team cohesiveness.
• Empathy. Being able to "put yourself in the other person's shoes" is a key trait of leaders today. Without empathy, you can't build trust. And without trust, you will never be able to get the best effort from your employees.
• Charisma. People usually perceive leaders as larger than life. Charisma plays a large part in this perception. Leaders who have charisma are able to arouse strong emotions in their employees by defining a vision which unites and captivates them. Using this vision, leaders motivate employees to reach toward a future goal by tying the goal to substantial personal rewards and values.

Overall, leaders are larger than life in many ways. Personal traits play a major role in determining who will and who will not be comfortable leading others. However, it's important to remember that people are forever learning and changing.

Leaders are rarely (if ever) born. Circumstances and persistence are major components in the developmental process of any leader. So if your goal is to become a leader, work on developing those areas of your personality that you feel are not "up to par". For instance, if you have all of the basic traits but do not consider yourself very much of a "people" person, try taking classes or reading books on empathy. On the other end, if relating to others has always come naturally to you, but you have trouble making logical decisions, try learning about tough-mindedness and how to develop more psychological resistance. Just remember, anyone can do anything they set their mind to...

Share this article

Additional Resources for Entrepreneurs

Lists of Venture Capital and Private Equity Firms

Franchise Opportunities

Contributors

Business Glossary