What is effective leadership? Defining principles and practices

As huge drivers of company culture and performance, leaders are critical to the success of an organization, which is why understanding what makes a leader effective is so valuable. We unpack the key principles and practices of effective leaders.

There’s been a merger at your organization. As a team leader, it’s your job to help your employees navigate the transition. The company you’re merging with has a very different workplace culture and methods of working. You know it will take time until everyone feels comfortable and like one team working towards the same end.

You’ve been working with management for a few months to chart the way forward, and now it’s time for you to communicate and implement the changes. It’s time to put your leadership abilities to the test. Now, more than ever, you need to ensure you are leading effectively. 

But what does it truly mean to lead effectively? What are the principles and practices that can help you ensure that you are doing your best as a leader to guide and motivate your team?

That’s exactly what we are going to unpack today. 

Now, before we dive into it, let’s look at why effective leadership is so crucial for an organization.

The impact of effective leadership

Most agree that effective leadership is important, but it can be easy to overlook just how important it really is. Above all, leaders have a huge impact on organizational culture, which, in turn, has a direct impact on an organization’s bottom line. 

As the management consultant Peter Drucker famously said, “Culture eats strategy for breakfast.”

The numbers back this up. The Harvard Business Review found that company culture can account for nearly one third of an organization’s financial performance.

That’s why a focus on leadership development is key.

In the case of our merger scenario, it’s even more critical. According to Gartner, 50% of all change initiatives result in failure, while just one-third are considered to be successful. 

Change management leadership means bringing together change management and leadership development into a single combined approach. Part of this approach will come from the practical skills you pick up on the job, but investing in courses and self-education is also essential. 

It’s important to gain an understanding of the qualities of effective leaders, leadership styles, and how to set objectives and give feedback to support your team through change, which, in today’s world especially, is a constant.

Principles of effective leadership

Researcher and author Brené Brown writes, “A leader is anyone who takes responsibility for finding the potential in people and processes and has the courage to develop that potential.

What does that look like in practice? While a quick Google search will lead you to many definitions of effective leadership, there are several that experts agree on again and again.

  • Lead by example

Effective leaders set high standards for themselves and live up to them. Team culture is ultimately a reflection of the behaviors and attitudes leaders exemplify in themselves and tolerate in their relationships.

That’s why developing the right mindset early on in your role is crucial as well as ensuring that you are living the company’s values. For example, if transparency is a company value, then an effective leader will be open about where the company has room for improvement in addition to where it is excelling.

  • Unite people under a shared vision

The most effective leaders throughout history understood the power of vision. Martin Luther King Jr. clearly described his dream and Amelia Earhart’s vision of flight served as a call for women around the world to set their sights higher.

Setting the vision is the first step that allows people to feel a part of a valuable mission. It boosts morale and motivates people by reminding them why they are doing what they are doing.

  • Communicate effectively

Great leaders spend a good deal of their time actively listening to those around them and taking their time to think through a response that is tactful and opens up a sense of dialogue. This includes giving constructive and positive feedback that is timely and tailored to how the recipient can best receive the comments.

In turn, this requires a high level of emotional intelligence and a commitment to improving it by developing greater self-awareness, self-regulation, motivation, empathy, and social skills. 

  • Act courageously

Leaders make the hard decisions. They gain an understanding of the risks and act with conviction when the time comes. It takes vulnerability to make hard choices and an understanding that even if something goes wrong, failure is instructive.

Ultimately, avoiding hard things is a decision as well. Dilly-dallying when a choice must be made just creates another void that simply encourages speculation, empowers the grapevine, and amps stress. In short, breeds a negative company culture

  • Build trust and invest in others

The hallmark of an effective leader is their ability to engage genuinely with their team members and earn their trust through the little moments of instruction, guidance, and chit-chat that show they are invested and care. Effective leaders coach their employees through honest feedback and a commitment to their growth.

In contrast, ineffective leaders:

  • Don’t take responsibility for their actions
  • Blame and control others
  • Don’t react to change or act decisively
  • Don’t spend time listening to and engaging with team members
  • Have trouble giving feedback and mediating conflict

The role of leadership styles in leading effectively

To enhance leadership efficacy, it’s crucial to develop a style that is yours and which merges different leadership techniques. This will give you scope to adapt to new situations as they arise.  

There are six generally agreed-upon leadership styles that effective leaders should be aware of and keep in their toolbelt.

  1. Directive leadership
  2. Visionary leadership
  3. Connected leadership
  4. Democratic leadership
  5. Pacesetting leadership
  6. Coaching leadership

Your style may differ depending on the challenges that you face. You may see the merits in being a Coaching leader initially, and then adopt a more Pacesetting, Democratic or Visionary style of leadership as you learn, develop and grow. 

Equally, if you’re exclusively focused on speed, efficiency and delivering results, you may not be as fussed about being a Visionary. 

Each and every team is different, and different moments call for different approaches. That’s why leadership agility or adaptivity – having the ability to switch between styles depending on the situation – is an important skill to master.

Effective leadership in action – the importance of preparation, setting objectives, and investing in personal development 

Beyond these leadership principles and styles, effective leadership takes practical action. 

In the example of our leader dealing with the merger, how can they successfully roll out the proposed changes?

There are three crucial factors:

  • preparation
  • clear objectives
  • identifying where improvement is needed

Let’s dig deeper into those three points.

The art of preparation

It may seem like a no-brainer, but leaders that have established preparation as a policy and who emphasize it on a daily basis, create an environment that enables their teams to excel. Prepared individuals feel at ease and enthused. Thorough preparation enables leaders to anticipate unexpected situations and then to determine effective responses ahead of time.

Not only that, but it also increases trust and authority. By mastering a topic, we increase our ability to initiate and our power to influence. This will also allow us to set an example. People who are listening will recognize the power that preparation confers and will be impressed – leadership by example. 

Preparation means being ready for the unexpected. People who say, “I don’t prepare. I like to be adaptable.” might in fact be saying that, instead of making an effort to anticipate change, they prefer to react under pressure. Winston Churchill said it best: “My most successful improvisations have been the ones that I had prepared!” 

Here’s how you can ensure effective preparation:

The first thing to do each morning: Aim to begin your morning with: defining your priorities, scheduling the day’s activities, and allocating sufficient time for each appointment and task. Keep in mind to also allow some time for the unforeseen. Your first step in preparation is this appointment with yourself. Ten minutes are often enough to avert stress and failure in advance. 

Prior to each situation that arises throughout the day, you should ask yourself, “What is the quality of my preparation?” 

  • Before a call: Which areas require extra preparation? Which issues that I want to raise do I still need to list?
  • Before a meeting or working session: What items should I add to an agenda? What written preparation should I ask for in advance? What notes can I prepare to help instruct what I want to say and what I want to ask? 
  • Before a visit: What personalized documents should I have ready for my client? Which points or suggestions should I note? 
  • Before a presentation: What can I do to prepare the room and ensure the support materials are in order? What keyword notes should I make about my presentation’s structure? What should I rehearse or go over again? 

Setting clear objectives

Next to effective preparation, setting clear objectives is key to leading a team successfully. In a complex environment that is increasingly unpredictable and insecure, the most important role of a leader is to help translate the company’s mission – what it wants to have accomplished – into essential objectives that are meaningful to everyone. 

Identifying these indicators is how you and your team members will know if the organization is on the right track. When the objectives are set, everything falls into place naturally. The mission is converted into intermediate goals, going from a macro-perspective to a micro-application. 

Defining objectives

Depending on the level of expertise and/or the maturity of each respective employee, effective leaders help and encourage them to set appropriate objectives. In this way, participation and autonomy are optimally assured. 

To be operational, an objective must be: 

  1. Concrete 

This means quantifiable and measurable. For example, “increasing profitability” is not calculable because amounts are not specified. “Improving client services” is ambiguous, whereas “reducing the amount of client complaints from 10 to 5 per week” is measurable. 

Asking the following questions will help make objectives concrete: 

  • What do we want to achieve precisely?
  • How will we know that we have achieved it?
  • How will others know that we have achieved it? 

Questions like these are particularly useful concerning objectives dealing with attitudes and behaviors because they tend to be defined in abstract ways. 

  1. Realistic 

A well-formulated objective must be attainable while at the same time ambitious – achievable, yet not impossible – while keeping in mind that the constraints linked to the environment may necessitate eventual changes along the way. 

The key questions are:

  • What factors should we consider in setting such an objective? (past and present) 
  • How can we be sure that it is reasonably achievable? (past, present and future) 
  • Is it sufficiently challenging for my personal development? (future) 
  1. Controllable 

An objective must be linked to a timescale, and it must include intermediate steps, planning for implementation, and meetings to validate progress and/or to compensate for deviations. In reality, a comprehensive system for managing performance means more than merely setting objectives. Regular feedback and annual appraisal sessions are also necessary.

Identifying where skills need to be improved

Leadership expert John Maxwell said, "The single biggest way to impact an organization is to focus on leadership development. There is almost no limit to the potential of an organization that recruits good people, raises them up as leaders and continually develops them."

The critical phrase there is “continually develops”. As most of us understand, our learning is never finished. Effective leaders know their weaknesses and where they can benefit from additional training or support. 

Perhaps they recognize that giving culturally sensitive feedback is a challenge for them as they haven’t had much exposure to foreign cultures. To address this weak point, they take a workshop on the topic.

Or maybe time management is a struggle and they want to ensure they have more time in the day for coaching and employee check-ins. As a result, they enroll in training that can help them improve their personal organization. 

Whatever the challenge may be, effective leaders are committed to continuous growth, for the benefit of them and their team.


Effective leadership is critical to the success of any organization. It is especially critical during times of flux and change when employees look to leadership for guidance. Most experts agree that effective leaders share some clear characteristics and principles, from strong communication skills to an ability to unite people around a shared vision. Additionally, effective leaders are able to employ the leadership style that is most appropriate for them, their team, and the environment. 

With an understanding of the traits and principles required, effective leaders then need to have a handle on the more practical matters of steering a group of people, like mastering the art of preparation, setting clear objectives, and committing to personal development. 

If you are committed to developing your leadership skills, Krauthammer’s Manage your mindset ebook, our comprehensive guide to leadership, is a great place to start.

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