A good leader is the engine that drives team productivity. Leaders set the tone and embody the values of an organisation. If they perform at their best, everyone wins: the teams, the company, the shareholders, and the business.

This has become even more visible thanks to research that turns this premise into figures. One of these is the recent study by McKinsey&Company: “Decoding Leadership: what really matters”, according to which “good leadership is a critical part of organisational health, an important driver of shareholder return”.

What exactly is a good leader?

In the current context of rapid transformations, this role is even more crucial. So much so that, according to this research, over 90% of CEOs are already planning to increase investment in leadership development. The reason? They see it as the single most important human capital issue their organisations face.

"Who else but a leader, a good leader, is the person who must identify these paths, constantly improve productivity, establish the guidelines to achieve the goals, analyse the results of each stage, adjust what is needed, inspire his team by his own example, lead, in short, the strategy?" says Genoveva Purita, Programme Director and Professor at OBS Business School. Director of Positioning at CEO Solutions in Argentina.

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But what exactly are we talking about when we say "leader"? Or what qualities do we allude to when we talk about good leadership and what kind of behaviours should be encouraged in this role to obtain the best results?

“Should companies now concentrate their efforts on priorities such as role modelling, making decisions quickly, defining visions, and shaping leaders who are good at adapting? Should they stress the virtues of enthusiastic communication?” asked researchers of the consulting firm who surveyed 189,000 in 81 different organisations around the word. The objective was to assess how different kinds of leadership are applied in organisations.

What they found is that the leaders of the best-performing organisations frequently had four types of behaviours, among them:

1) Solve problems effectively

The leader gathers, analyses and considers information, before deciding on major issues (such as mergers and acquisitions) as well as day-to-day ones (e.g., how to manage a team dispute).

2) Operate with a strong results orientation

The leader develops and communicates a vision and goals. From there, he works with and guides his team to achieve results, emphasising the importance of efficiency and productivity.

3) Seek different perspectives

Leaders are attentive to trends affecting organisations and changes in the environment and encourage employees to contribute ideas to improve performance. They base decisions on sound analysis and avoid second-guessing.

4) Support others

They are supportive and sensitive to how others feel. They show sincere interest in those around them, build trust and confidence, and inspire and help their colleagues to overcome challenges. In addition, they intervene in group work to promote organisational effectiveness, preventing employees' energy from being dissipated in internal conflicts.

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The characteristics of effective leadership

Effective leadership is a combination of various qualities and skills that enable individuals to guide, inspire, and motivate others toward achieving common goals. Although the definitions are not static and the type of leadership needed is nuanced depending on the context, there are basic things expected of a good leader.

Empathy, emotional intelligence, openness to change, concern (and action) to have diverse teams in all possible aspects, generosity and knowledge to promote the development of team members are some of the characteristics of good leaders, in addition, of course, to the knowledge of their area of expertise.

“Experience shows that different business situations often require different styles of leadership. We do believe, however, that our research points to a kind of core leadership behaviour that will be relevant to most companies today, notably on the front line. For organisations investing in the development of their future leaders, prioritising these four areas is a good place to start,” the study from McKinsey&Company said.

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LinkedIn Talent Solutions also presented a recent report in which it delved into the habits that are the foundation of effective leadership. The publication emphasises how to develop these habits and what professional tools are needed to apply them in the performance of leaders.

These are the habits and the skills to develop, according to LinkedIn:

1) Lead with empathy: Listen, don't assume, be present

2) Embrace change: Get employees involved and encourage experimentation

3) Act as a mentor: Identify needed skills, prioritise professional development and establish cross-generational mentoring

4) Welcome different views: Seek second opinions, embrace an open communication policy and don't take things personally

5) Encourage age-diverse teams: Leave assumptions at the door, promote cross-generational bonding

The importance of identifying and developing the tools and habits that make a good leader is increasingly valued by company managers. In another study by McKinsey&Company, more than 500 executives were asked to rank their top three human capital priorities. From the responses, leadership development was included as both a current and future priority. Nearly two-thirds of respondents listed leadership development as their top concern.

US companies alone spend nearly US$14 billion annually on leadership development. In that country, colleges and universities offer hundreds of leadership courses, and the cost of customised leadership development offerings from a top-tier business school can reach $150,000 per person.

With the identified skills and tools, companies can focus their efforts and avoid the most common mistakes in leadership development to increase the productivity and growth of the team and the company.