Organizational Leadership

Where there is no vision, the people perish.1   

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Table of contents

    What better way to start an explanation than by using a proverb? After all, people use them to share practical knowledge and pieces of wisdom. Furthermore, this particular proverb is quite appropriate to introduce the concept of organizational leadership.

    In organizational leadership, the vision is everything; it determines the organization's direction and what it is trying to achieve. This vision sets an organization apart from others as it defines its identity and path.

    Organizational Leadership Definition

    Let's start this explanation with a definition and clearly state the difference between leadership and organizational leadership.

    Organizational leadership is about creating an organization's vision and setting goals. Organizational leadership is also about directing and motivating people to carry on this vision and realize tasks to achieve this common goal.2

    In contrast, traditional leadership is more about effectively allocating and managing people and resources, whereas organizational leadership is about leading a group or an organization.

    In other words, organizational leadership is about creating the bigger picture and setting the course to follow. Traditional leadership is about leading the company or organization towards that goal.

    Organizational Leadership Importance

    Organizational leadership is the core of a company's strategy. It's what defines its vision and the goals it tries to achieve. Most of the greatest company leaders have a vision for their organization, and this vision sets the course and everything they do moving forward. Furthermore, this vision will also attract people who believe in it and want to make it happen.

    You want to wake up in the morning and think the future is going to be great - and that's what being a spacefaring civilization is all about. It's about believing in the future and thinking that the future will be better than the past. And I can't think of anything more exciting than going out there and being among the stars.3

    - Elon Musk

    Elon Musk has a vision; he wants humanity to become a multi-planetary species. To achieve this goal, he created SpaceX and revolutionized how we travel through space. Whenever a country wanted to send people into space, they needed to launch one space rocket designed explicitly for that purpose. After the launch, the rocket would be destroyed, representing a considerable cost and waste of materials.

    SpaceX created the first reusable rocket ship to make space travel viable, drastically saving costs. Reusable rockets are becoming the norm today, as more organizations are using reusable rockets to save on costs. Furthermore, SpaceX made all their patents for the technology they developed accessible to everyone, making it easier for people to work on solutions and make our civilization a multi-planetary species. SpaceX is entirely focused on this goal; everything they do is to achieve this purpose.

    That's why this vision is essential. Not only it sets the course for a specific purpose, but it will also attract the people who believe in that purpose and want to make that vision happen. If you are a space engineer and wish to create a spaceship that will go to Mars, you know you will have to work for SpaceX.

    Organizational Leadership Types

    In 1939 Kurt Lewin defined three leadership styles: autocratic, democratic, and laissez-faire. Over time, other leadership styles were added to the list, and today it is commonly accepted that transformational leadership is part of Lewin's leadership style4:

    • Autocratic or authoritarian: when one leader is responsible for all the decisions with little input from anyone else in the organization. The leader allocates the resources, gives orders, and takes full responsibility for the company's success or failure. This type of leadership generally suits small businesses or teams that must make fast decisions and act quickly.

    • Democratic or participative leadership: the leader still makes the decisions but asks for advice and recommendations from subordinates; they encourage subordinates to participate in discussions, which makes people more engaged and interested in the organization.

    • Laissez-faire or delegative leadership: this leadership style gives more responsibility and the power to make decisions for the employees; it implies a high level of trust among people within the organization. Laissez-faire leaders are great at delegating tasks to the right person to do the job.

    • Transformational leadership: when leaders gather people around a great idea and have a vision that everyone wants to follow and do everything in their power to accomplish.

    As seen in Fig 1 below:

    Steve Jobs was a transformational leader. He had this great idea to transform the computer industry and make it stylish and easy to use at a time when it was bulky and only used by specialized people and enthusiasts. Steve Jobs transformed the mobile phone industry by creating a Smartphone covered with a touchscreen instead of a keyboard. Steve Jobs had a vision; to accomplish it, he rallied the best people around him.

    Although Lewin has classified those leadership styles, there is not one leadership style that is better than the other. Some are appropriate in a specific situation but wouldn't work in another. This idea is the core principle of situational leadership. So, for example, although it is acceptable to have one leader who takes all the decisions in a small company, it wouldn't be appropriate for a big corporation with thousands of people.

    Check out our explanation about contingency theory for more information about Situational Leadership.

    Organizational Leadership Development

    An excellent organizational leader has a clear vision of the organization's future and can gather people with the same beliefs and wants to achieve this goal.

    There are various skills necessary to be a good leader when it comes to organizational leadership:

    • Planning: having an idea and promoting it is one thing; however, you will also need a solid plan that clearly states how to achieve this goal. Without excellent planning skills, a vision will only stay a dream that people will pursue.

    • Communication: as you need to inspire people, you must communicate well with them to ensure everyone is aligned and has the same goal. As an organizational leader, you must ensure that everyone can freely communicate within the team and provide feedback. Good communication in a group is one of the core principles of success.

    • Problem-solving: however perfect a plan is, people will always face unexpected problems that need to be solved. As a leader, you are constantly the person people will come to with complicated issues they can't solve, and it's up to you to find a creative solution.

    • Delegation: as a leader, you can't do everything on your own, and you will have to delegate tasks to others. You are responsible for delegating the right job to the appropriate person and ensuring that the team will achieve its goals.

    Those skills are not set in stone; organizational leaders can learn to improve them by following classes, seminars, conferences, or reading technical articles. A good leader should also listen to their team's feedback and practice those skills with them.

    Leaders have many duties and are responsible for their organization's failure or success. For this reason, there are some key principles that they must keep in mind while leading an organization5:

    • Leading: create the vision and continuously inspire people to follow it.
    • Planning: create the goals and strategies the employees will pursue to achieve the company's vision.
    • Organizing: properly allocating the employees and resources to achieve the goals.
    • Staffing: hiring and training the workforce.
    • Controlling: ensuring that the organization is following well on the goals.

    Figure 2 below outlines leadership duties.

    An organizational leader has to create the bigger picture that the organization will pursue. This leader must also continuously motivate and ensure people are aligned with pursuing this goal. There are many ways to lead people towards a specific purpose, and leaders must adapt their style to the situation.

    Organizational Leadership - Key takeaways

    • Organizational leadership is about creating an organization's vision and setting goals. Organizational leadership is also about directing and motivating the people to carry on this vision and realize tasks to achieve the common goal.

    • Organizational leadership is about creating the bigger picture and setting the course to follow. Traditional leadership is about leading the company or organization towards that goal.

    • Organizational leadership is crucial in the company's strategy. It's what defines it. It's what creates the vision and the goals the company is trying to achieve.

    • There are four leadership styles: Autocratic, Democratic, Laissez-faire, and Transformational.

    • There are five principles of organizational leadership: leading, planning, organizing, staffing, and controlling.


    References

    1. Kevin Kruse. 100 Best Quotes On Leadership. Oct 16 2012. https://www.forbes.com/sites/kevinkruse/2012/10/16/quotes-on-leadership/?sh=b94cf322feb8
    2. Point Loma University. https://www.pointloma.edu/resources/business-leadership/what-organizational-leadership-why-it-important#:~:text=The%20importance%20of%20organizational%20leaders,set%20found%20in%20their%20team.
    3. SpaceX. Our Mission. 2022. https://www.spacex.com/mission/
    4. Global Campus. 4 leadership styles in business. 17/06/2022. https://www.uagc.edu/blog/4-leadership-styles-in-business
    5. Global Campus. 5 Principles of Great Management 08/12/2021. https://www.uagc.edu/blog/5-principles-of-great-management#:~:text=Principle%20No.%201%3A%20The%20Functions%20of%20Management&text=At%20the%20most%20fundamental%20level,to%20be%20a%20successful%20manager.
    Frequently Asked Questions about Organizational Leadership

    What is organizational leadership theory? 

    Organizational leadership is about creating an organization's vision and setting goals. Organizational leadership is also about directing and motivating people to carry on this vision and realize tasks to achieve this common goal. 

    What is the difference between leadership and organizational leadership? 

    Organizational leadership is about creating the bigger picture and setting the course to follow. Traditional leadership is about leading the company or organization towards that goal. 

    What is the importance of organizational leadership? 

    Organizational leadership is crucial in defining the company's identity and goals. It's the company's vision for its future and what actions it will take to achieve them. 

    What are the four types of leadership? 

    Autocratic, Democratic, Laissez-faire, and Situational 

    How do you develop yourself as an organizational leader? 

    A leader needs to pay particular attention to the following skills: planning, communication, problem-solving, and delegation. A leader needs to improve on those skills by taking classes, participating in seminars, practicing skills, and asking for feedback. 

    What are the five principles of organizational leadership? 

    Leading, planning, organizing, staffing, and controlling. 

    What is good organizational leadership? 

    Organizational leaders aim to do what is best for both the individual and the organization as a whole. They work to empower employees at every level, applying their understanding of personality, relationships, work ethic, business, and a leadership mindset to help ensure success for the company and its people. 

    Test your knowledge with multiple choice flashcards

    Can autocratic leadership be appropriate for a small business owner?

    Is Democratic one of the four types of leadership?

    Was Steve Jobs a democratic leader?

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