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Why Leadership Is Important in Business

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The importance of effective leadership is undeniable. Consulting firm Gaebler Ventures perhaps puts it best on their website by saying, "Great leaders create great businesses." Whether you learn from looking at the success of leaders, like Bill Gates and Microsoft, or the failures of leaders, such as Kenneth Lay of Enron, one lesson rings true. The role of leadership, as diverse and dynamic as it may be, is an indispensable component of business success.


Business leaders often find themselves needing to delegate work on a project or within a business. This delegation requires careful planning, and consideration of the company's needs, the project's requirements, and the skills and talents of individuals in the workforce to which the tasks at hand must be delegated. It is a delicate process that requires reflection, intuition and effective evaluation of a staff. This is a critical part of encouraging high levels of productivity.


Leaders in a business must not only manage current projects, but provide direction for future ventures. The first part of setting direction is establishing goals. Leaders need to realistically evaluate prospects for success and expansion, and establish concrete benchmarks for reaching the next level of achievement. Leaders look at the big picture, analyzing how different projects or initiatives may interact with one another, and predicting the next step towards the achievement of established goals. This is an important part of ensuring the company continues to grow in a focused manner.


Effective leaders in a business play an integral role in motivation. Whether the motivation is delivered via public addresses, monthly newsletters or mentoring, leaders find ways to excite the workforce about their tasks, establish trust and loyalty among employees, and provide encouragement to help people reach their full potential within the company. Effective execution of this task can help increase employee retention, saving the company money in the long run, and improve productivity, generating more revenue for the company.


One of the important jobs a business leader is charged with is evaluations. Leaders find themselves responsible for evaluating individual employees, project results and company performance as a whole. This can be a difficult task, as it requires objectivity, realism and constructive feedback to help improve upon current operations. This operation is a critical component of growth for any company.

Conflict Resolution

Leaders in the business world frequently find themselves addressing conflicts and developing solutions. Whether the conflict occurs between co-workers, an employee and a client, or the company and supplier, leaders need to be able to establish the root cause of the problem, the needs of all parties involved and steps to take to mitigate the damage to the relationship in question. This can help to increase the efficiency of the workplace.