What is Organizational Leadership, and Why is it Important?

What is Organizational Leadership, and Why is it Important?

Irrespective of the type and size, organizations invariably need strong leadership for optimum effectiveness. While many think of leadership in terms of only outward qualities that enable a person to command a team or group of people, in reality, a lot more is required of leaders (especially in a business setup) than simply the ability to influence others.

This is where the concept of organizational leadership comes in.

While leadership is a trait that is both inbuilt and can be acquired, organizational leadership is an area that deals with both human psychology as well as multiple expert tactics. 

The idea of organizational leadership emphasizes developing leadership skills and abilities that are relevant across the organization. It refers to the potential of individuals to face difficult times in the industry and still grow during those times. It identifies and distinguishes the leaders from the managers.

This blog aims to explore the concept of organizational leadership along with the key skills needed for organizational leadership, as well as discuss why is leadership important. 

What is Organizational Leadership?

In a traditional business setup, leadership is thought of as a set of external capabilities that allows one to bring out the best in teams/colleagues, along with an internal self-awareness to appreciate your impact on people around you.

However, organizational leadership is slightly different and more nuanced than this idea of traditional leadership. It refers to the set of skills and qualities required to run an entire unit, division, or company.

Unlike the broader understanding of leadership that focuses more on interpersonal skills required to organize teams and executives around a common goal, successful organizational leadership requires higher business acumen in leaders. 

Put simply, organizational leadership is an area that is primarily focused on setting strategic goals for an organization while also motivating individuals within it to meet their own goals to be able to carry out a greater mission successfully. 

It requires everything from proper well-rounded skill sets, strong foundational knowledge of business, and robust interpersonal skills, to strategy formulation and execution. 

Unlike the popular notion that views organizational leadership as just a skill set within business management, it is essential in virtually all organizations. Professionals in any field can use these skills to become more effective in their roles. 

Who Requires Organizational Leadership Skills?

Regardless of their position and role, all professionals in an organization need leadership skills to succeed in their careers. In particular, organizational leadership skills are important for the following:

  • Experienced team leaders: For executives who already have experience in leading a team, developing organizational leadership skills is the appropriate next step toward applying their knowledge at scale and succeeding in their role.
  • Aspiring managers:  To be able to run a division, department, or entire organization successfully requires specific leadership skills. Aspiring executives especially need to know how to execute the strategy guiding their organization.
  • Entrepreneurs: For entrepreneurs, leadership skills are an integral component of their business’s success. They need a strong foundation in organizational leadership to build their business from scratch and adapt to changes as the company grows.

In the next section, we will explore more about how leadership and organizational development go hand in hand and what is the importance of leadership in an organization.

Importance of Organizational Leadership

Organizational leadership is important for the success of any organization because it offers purpose and guidance and helps others understand the long-term strategies and goals of a business.

Some of the other key reasons why organizational leadership is important include:

Enhanced Communication

Leaders in any organization help effectively communicate the vision and mission of the firm to employees and other stakeholders. This offers direction and helps everyone involved in the process identify the roles that best fit their skills and experiences.

Proper and clear communication also allows leaders to encourage their respective teams to actualize set objectives.

Clarity of Vision

Successful leadership allows a company to create a clear vision of what it wants to achieve.

Organizational leaders offer a clear strategy and roadmap outlining the various steps and resources their company requires to arrive at the preferred destination.

Commitment Toward Success

Effective leaders are always committed to the success of their organization and its employees. Consistently working towards their goals, they focus on the larger picture and do not allow temporary setbacks to affect them in any way.

In the case of adversaries, good leaders make sure to constantly motivate their teams and help them see beyond the problems which might be preventing them from reaching the common business goal.

Better Decision-Making

Better decision-making is an important aspect of organizational leadership and is considered one of the top leadership skills.

Successful leaders are more equipped to make the best decision for the organization in any kind of situation.

They display the ability to accurately weigh their organization’s strengths and weaknesses to ensure that the choices they make help them stay competitive and put them at an advantage now and in the future.


When it comes to teaching the organization ethical values, successful leadership always remains at the forefront.

Regardless of the nature and type of issues, successful leaders maintain the right perspective and do the right things, all the time, to achieve their goals.

Integrity, fairness, and truthfulness are some of the core values and attributes they display in every type of situation to lead by example for their teams as well as clients.


Having organizational leadership qualities allow leaders to help their teams and subordinates to excel at their work and in other personal aspects by expressing confidence in their abilities.

They make sure to listen to the concerns of their employees, partner with them to find solutions, and offer positive feedback to bring out the best in them.

Boosts Morale

Organizational leadership initiatives prepare leaders to boost their staff morale by winning their trust.

It helps assure employees of the leader’s confidence in their abilities to deliver on the vision/mission of the organization.

Apart from this, high morale among employees also reduces distractions and encourages them to put more focus on achieving organizational goals.


Effective leaders ensure to create a conducive environment where others can grow. They are not only open to new ideas/methods of achieving results but are also flexible enough to correct their mistakes.

They encourage their team members and subordinates to offer inputs on improving work processes and reward excellence to enhance loyalty and creativity.

Key Organizational Leadership Skills and Qualities

Some of the top organizational leadership skills and qualities are:

Communication and Interpersonal Skills

One of the most important aspects of organizational leadership is strong communication and interpersonal skills.

Skills such as active listening, delegating tasks, and emotional intelligence are of critical importance to organizing teams around common goals.

Thorough Understanding of Your Business

To be able to lead your organization to success, there needs to be a clear and thorough understanding of its inner workings, as well as the proper context in which it operates.

This includes various external forces, such as industry trends and changes in consumer behavior/preferences.

Apart from this, understanding an organization’s structure and dynamics is also an important facet.

Self-Awareness/Personal Development

Another important skill required to become a strong organizational leader is self-awareness and a commitment to continuous personal development.

Conducting a self-assessment of strengths and weaknesses is a great beginning step to becoming a successful leader. 

Change Management 

Managing change effectively is another important area to become a successful organizational leader.

To be able to do this, leaders should be able to execute their vision and strategy and lead their organization to success. 

Organizational Leadership Degrees

There is a range of degrees in organizational leadership, from bachelors to doctoral degrees. Among these are:

  • BS, Business Leadership
  • BA, Organizational Leadership
  • Executive Master of Leadership
  • Master of Science, Organizational Leadership and Learning
  • Ph.D. in Organizational Leadership
  • Doctorate of Education, Organizational Change and Leadership

Apart from these, there is a range of other degrees that may serve a role in organizational leadership, including:

  • BS, Business Administration
  • Master of Public Administration (MPA)
  • Master of Business Administration (MBA)
  • Master of Public Health (MPH)
  • Ph.D. in Management and Organization

It is important to remember that many smaller organizations and some organization levels would not require their leaders to hold such degrees.

However, as experienced professionals, leaders can pursue these degrees (full-time/ part-time) certificates or executive programs to fill in the skills/knowledge gaps as they move into leadership roles. 

To Conclude

Regardless of their current position and profile, the first step to succeeding in any future role is developing robust organizational leadership skills so that leaders can drive change at scale.

The ideal way to do this is by pursuing a leadership training program that allows them to hone their organizational leadership skills, whether they’re entrepreneurs, mid-level managers, top-level business executives, or just someone looking to expand their knowledge.

Taking an organizational leadership program offers excellent opportunities to assess leaders’ current skill set, identify the key areas of improvement, and accordingly apply their learning.

The courses/degrees equip them with the necessary skillsets required to deliver on various organizational as well as personal responsibilities to lead teams, units, and departments effectively.

It also allows leaders to accurately assess the context in which their organization operates and draft an effective vision statement driven by purpose and strategy.

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