An effective leader leads his followers through personal examples because he/she realizes his/her influence on the organizational culture as well as the importance of establishing credibility. Leaders like Steve Jobs, Warren Buffet, and Jack Welch led through personal examples which is why they were trusted by their subordinates and their influence on the organizational culture has been undeniable whether it’s Jobs’ desire the make the most innovative products or Buffet’s desire to uphold ethical business values in all kind of situations.
Effective leaders also understand that issues and challenges faced by the organizations often far exceed the limited resources available to them. They know that being a leader is not always about being the most competent person in an organization but more about being able to lead and inspire people. This is why effective leaders pay great attention to making sure they utilize their limited financial and human capital efficiently. A good leader realizes the value of quality human capital, especially in the age of globalization due to growing competition, thus, he/she is always seeking ways to motivate subordinates and keeping their morale high.
Effective leaders are pragmatic and are not afraid to make difficult decisions. They understand their strengths and limitations and don’t overestimate themselves or the organizations they lead which prevents costly mistakes. They also closely monitor factors both within the organization as well as in the external environment so that threats can be dealt with as well as opportunities be exploited in a timely manner. They communicate with both internal and external stakeholders because they understand that the success of an organization also depends upon how effectively it meets the expectations of different stakeholders.