Although there isn’t a single right way to effectively lead a team, there are several characteristics common among successful leaders and managers.

Ineffective leadership can cost companies more than just morale. According to research from Gallup, 24 percent of employees are actively disengaged as a result of poor management, leading to teams that are less productive, less profitable, and more likely to cause turnover. And that turnover adds up quick: translating into nearly two times the annual salary of every employee who quits.

That’s why effective leadership is so important. In order to retain employees, satisfy customers, and improve company productivity, you need people who can effectively communicate the company’s vision, guide teams, and influence change.

If you aspire to be that person, here's how you can become a more effective leader.

Characteristics of an Effective Leader

1. Ability to Influence Others


“[Leadership] is all about influencing people,” said Kirstin Lynde, founder of leadership development firm Catalyze Associates, in a recent Facebook Live interview. Early in your career, you might exercise authority by being the go-to person on a certain subject within your organization, or by actively listening and building consensus among your team. As you advance, you may exert influence by knowing how to articulate the direction you think the company should head in next.

Influencing others requires building trust with your colleagues. Focus on understanding their motivations and encourage them to share their opinions. You can then use that knowledge to make change and show that their voice matters.

2. Transparency—to an Extent


Part of building trust is being transparent. The more open you are about the organization’s goals and challenges, the easier it is for employees to understand their role and how they can individually contribute to the company’s overall success. That sense of value and purpose then translates into higher levels of employee engagement.

While transparency is often intended to promote collaboration, knowledge sharing, and accountability, too much of it can have the opposite effect, according to Ethan Bernstein, an associate professor of organizational behavior at Harvard Business School, who teaches the course Developing Yourself as a Leader.

“Wide-open workspaces and copious real-time data on how individuals spend their time can leave employees feeling exposed and vulnerable,” writes Bernstein in the Harvard Business Review. “Being observed changes their conduct. They start going to great lengths to keep what they’re doing under wraps, even if they have nothing bad to hide.”

Bernstein encourages balancing transparency with privacy and setting different types of boundaries to still foster experimentation and collaboration.

3. Encourage Risk-Taking and Innovation


Experimentation is critical to establishing and maintaining your company’s competitive advantage. Great leaders recognize this and encourage risk-taking and innovation within their organization.

By creating a culture that embraces failure, employees are more emboldened to test theories or propose new ideas, because they see that creativity is valued. For some companies, that might mean rewarding experimentation: Google’s innovation lab, X, offers bonuses to each team member who worked on a project the company ultimately decided to kill as soon as evidence suggested it wouldn’t scale, in an effort to “make it safe to fail.”

After all, big breakthroughs don’t happen when companies play it safe. If well-intentioned, failures often become valuable business lessons.

    Related: How to Be an Effective Leader at Any Stage of Your Career

4. Value Ethics and Integrity


In a survey by consulting firm Robert Half, 75 percent of employees ranked “integrity” as the most important attribute of a leader. In a separate survey by Sunnie Giles, creator of Quantum Leadership, 67 percent of respondents ranked “high moral standards” as the most important leadership competency.

“A leader with high ethical standards conveys a commitment to fairness, instilling confidence that both they and their employees will honor the rules of the game,” writes Giles in the Harvard Business Review. “Similarly, when leaders clearly communicate their expectations, they avoid blindsiding people and ensure that everyone is on the same page.”

Employees want to feel safe in their environment and know that their manager will advocate for them, treat them fairly, and, ultimately, do what’s right for the business. As a leader, it’s important to act with integrity, both to build trust within your team and to create model behavior for others in the organization.

5. Act Decisively


In today’s fast-changing, complex business environment, effective leaders need to make strategic decisions quickly—even before any definitive information is available, according to a report by Harvard Business Publishing. Having a big-picture view of the organization helps, because it enables you to balance emerging opportunities with long-term goals and objectives.

Once you make a decision, stick with it, unless there’s a compelling reason to shift focus. Your goal is to move the organization forward, but that won’t happen if you can’t make a decision without wavering.

6. Balance Hard Truths with Optimism


Every decision you make won’t result in success. There will be times when you’re met with failure; it’s your job as a leader to exercise resiliency.

“Enduring setbacks while maintaining the ability to show others the way to go forward is a true test of leadership,” said Harvard Business School Dean Nitin Nohria to Working Knowledge.

Effective leaders don’t avoid the hard truths. Instead, they take responsibility for their decisions, maintain optimism, and focus on charting a new course of action. They also help others cope with organizational change and address issues quickly, so that problems don’t fester and escalate.

Developing Yourself as a Leader - Maximize Your Leadership Potential. Learn More.

Assessing Your Strengths

Becoming an effective leader doesn’t happen overnight. It’s an iterative process and requires you to assess your strengths and evaluate who you are as a communicator and collaborator.

“We all have our behavioral styles and typical approaches that have been baked into us since we were young,” said Lynde, noting that some of those traits could work in your favor as you advance into a leadership role, while others might hold you back. “It’s all about building up your own self-awareness of who you are and how you come across.”

With that full-picture, you can start taking action and work toward developing your leadership style to become a more effective leader.

Are you interested in learning more about how to assess your strengths and enhance your leadership capabilities? Explore our live, interactive online course Developing Yourself as a Leader.

This post was updated on August 6, 2019. It was originally published on October 4, 2018.

Lauren Landry

About the Author

Lauren Landry is the associate director of marketing and communications for Harvard Business School Online. Prior to joining HBS Online, she worked at Northeastern University and BostInno, where she wrote nearly 3,500 articles covering early-stage tech and education—including the very launch of HBS Online. When she's not at HBS Online, you might find her teaching a course on digital media at Emerson College, chugging coffee, or telling anyone who's willing to listen terribly corny jokes.