What Is Organizational Leadership? Styles, Skills, and Careers

Organizational leadership is a framework for effectively guiding a company and its employees in ways that achieve key business goals and align with the company's mission. It's often implemented through daily actions, decisions, and behaviors, such as communicating a vision, motivating a team, making strategic decisions, and navigating challenges.  

Developing your abilities as an organizational leader can lead to lucrative career opportunities. Learn more about this concept, why it's important, key approaches to it, and different careers to consider.

What is organizational leadership?

Organizational leadership is concerned with the big picture. It often considers broad market trends, potential disruptions, and opportunities for growth or transformation. Working in organizational leadership can often entail:

1. Setting the overall vision and direction for the organization

2. Developing long-term strategies

3. Anticipating and adapting to changes in the external environment

4. Inspiring and motivating people towards a common goal

5. Driving organizational culture and values

How does leadership differ from management?

While leadership and management can overlap, they are different concepts. Leadership is primarily concerned with setting a vision, inspiring others, and driving change within a company. In this way, it tends to prioritize long-term strategies and goals.

Managers, on the other hand, tend to focus on managing people (or sometimes projects). This can include ensuring that their team progresses toward achieving important business goals. They are typically tasked with planning, organizing, and coordinating resources to achieve specific objectives within established timeframes and budgets.

Why is organizational leadership important?

Organizational leadership often refers to the ability to oversee a larger aspect of a company, such as a department or division, or the company itself. As such, organizational leadership can have a big impact, shaping the success, culture, and long-term viability of an organization.

Organizational leadership tends to affect:

• The decisions a company makes

• The performance of a company

• How nimbly a company can adapt to change (aka change management)

• The type of culture a company embodies

• How employees feel about working at a company and their motivation to improve

• Relationships with various stakeholders

7 types of organizational leadership styles

An organizational leadership style refers to the way leaders in an organization influence and motivate others, implement policy, delegate authority, direct projects, manage problems, and more. Being aware of your own leadership style can help:

• Boost your communication effectiveness

• Enhance the way you engage with others

• Improve your ability to collaborate and work with teams

Common styles of organizational leadership include the following:

1. Authoritative leadership

Authoritative leaders enjoy mentoring employees and will take the time to learn about individual strengths that might benefit the organization. This quality makes them good collaborators and team-builders. They also provide a clear vision, which helps motivate employees and keep them committed to attaining organizational goals. When it comes to decision-making, authoritative leaders usually give directions more than they ask for input from others. 

2. Bureaucratic leadership

Bureaucratic leaders take a more traditional approach to leading, following a chain of command. They set clear expectations and rules for performance and ensure employees respond accordingly. While bureaucratic leaders rarely seek employee input, this type of leadership works well in settings that rely on specific policies and procedures for safety, such as manufacturing plants, health care settings, or law enforcement agencies.    

3. Democratic leadership 

When it's time to make a decision, democratic leaders encourage employee participation. They often focus on quality over quantity regarding work output, so democratic leaders must know how to keep employees motivated and on task if needed. This type of leadership works well in settings that encourage the flow of ideas, like creative companies or schools. 

4. Laissez-faire leadership

When employees in an organization have high levels of skill and confidence, leaders sometimes take a laissez-faire approach. Derived from a French term meaning "let alone," this form of leadership allows employees to complete work without much interference. However, laissez-faire leaders should know how to set clear expectations when necessary. 

5. Servant leadership

Servant leaders care more about elevating and empowering employees than advancing their own agenda. They encourage ideas and involve others in decision-making, often resulting in high employee morale. Servant leadership typically works well in humanitarian settings like nonprofit organizations or local community service agencies.  

6. Transactional leadership

Transactional leaders motivate employees using rewards and consequences and focus on short-term rather than long-term objectives. This type of leadership works well in structured, results-driven environments like the military, first responders, or professional sports settings.  

7. Transformational leadership

Transformational leaders often inspire employees with energy, charisma, creative vision, and passion. They encourage workplace engagement and have a skill for getting employees to buy into the organization's mission and goals. Environments that might benefit from transformational leadership include creative settings, tech companies, or political campaigns.

Organizational leadership skills

Organizational leaders must have strong business acumen, leadership skills, and an ability to think strategically. The skills you can develop if you're interested in pursuing opportunities in organizational leadership include:

• Business management

• Change management

• Communication skills

• Decision-making  

• Integrity

• Prioritization

• Problem-solving

• Self-awareness

• Strategic thinking

How to develop your organizational leadership skills

You have several options for developing organizational leadership skills.

• Learn on your own: Look for books, YouTube videos, websites, and podcasts on leadership topics and trends to build your knowledge.

• Enroll in a course or certification: Structured online learning can also bolster your knowledge while providing you with an opportunity to develop practical skills.

• Consider a degree: Getting a degree in organizational leadership can be an investment through which you can better understand the major theories behind this framework and different ways to put those theories into practice. A degree program may also provide a good opportunity to build your professional network.

4 organizational leadership careers

Organizational leaders often rise in their careers to C-suite positions, such as Chief People Officer (CPO) or Chief Executive Officer (CEO), or they become consultants who offer their expertise to companies seeking to improve in some way. To advance to those careers, you can gain experience in the following mid-level roles, which all require varying degrees of organizational leadership.  

1. Human resources manager

Average annual salary (US): $140,030 [1]

Depending on the company's size, human resources managers either handle an area of employee administration, such as onboarding or benefits, or are tasked with overseeing all aspects.

2. Project manager

Average annual salary (US): $100,750 [2]

Project managers lead cross-functional teams to achieve specific objectives. This role develops leadership, communication, and strategic thinking skills across various parts of an organization.

3. Operations manager

Average annual salary (US): $101,280 [3]

Operations managers oversee the day-to-day activities of a business unit or facility. This role provides hands-on experience in leading teams, managing resources, and implementing organizational strategies.

4. Training and development manager

Average annual salary (US): $127,090 [4]

Training and development managers oversee employees' professional development. This can include evaluating training needs, creating training budgets, and scheduling and conducting training programs.

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