Business Leadership Today

Why Leadership Is So Important


Matt Tenney, Author of Inspire Greatness: How to Motivate Employees with a Simple, Repeatable, Scalable Process

An organization’s most valuable resource is their employees. How it manages those employees has a profound impact on the organization’s future success. 

Leaders set the tone for the organization, and all their actions and behaviors help or harm its culture. Good leaders bring out the best in their teams. They help their team members grow and develop and guide them to achieve organizational goals using methods that are not detrimental to their well-being. 

Poor leaders bring out the worst in poor employees and fail to help good employees reach their full potential, resulting in morale issues that can ultimately hurt employee well-being and organizational profitability. 

This makes a leader’s job very important. 

It also makes the way a leader does their job very important because the positive and negative effects of leadership can be seen in all aspects of an organization.

Leadership is so important for maintaining a strong organizational culture with a high level of employee buy-in and ensuring long-term profitability because leaders profoundly impact the employee experience, employee engagement, employee retention, and employee motivation.

This article will examine the important ways leaders impact their team members and how leaders can make those impacts positive ones. 

Employee Experience

Gallup defines employee experience as “the journey an employee takes with your organization.” This journey includes every interaction that happens during the employee lifecycle, as well as the experiences that involve an employee’s role, work environment, and their supervisor.

Why Employee Experience Matters

Employee experience plays a significant role in employee motivation, employee engagement, and employee retention, but that’s not all. It also plays a significant role in customer experience. 

According to a recent Harvard Business Review Analytic Services survey, 55% of executives surveyed said they believe it is just not possible to provide great customer experience without providing a great employee experience.

Employees who view their employee experience as positive are much more likely to provide a positive customer experience. In fact, the link between the two is so strong, many are declaring employee experience is the new customer experience

When the employee experience is positive, employees are motivated to perform well, engaged in their work, more likely to stay, and united with a shared sense of purpose which helps them provide an excellent customer experience. 

When an organization provides a positive employee experience, they see improvements in customer satisfaction, greater innovation, and generate 25% higher profits than organizations that do not provide a positive employee experience.

Why Employee Experience Matters

The day-to-day interactions employees have with their direct leaders strongly impact their employee experience.

In fact, leadership, more than any other factor, impacts the employee experience. Leaders communicate and clarify organizational culture, core values, expectations, goals, and feedback that helps employees improve. 

They keep employees motivated to perform well and ensure that they are able to do their work in an environment that is conducive to high performance and inhospitable to toxic behaviors.  

A positive employee experience results in better engagement, retention, performance, and long-term profitability, but a positive employee experience is only possible if employees are led in positive ways. 

How to Boost Employee Experience

A leader’s ability to build authentic relationships with their employees is the key to providing a great employee experience and helps them maintain a harmonious, respectful work environment in which employees can perform well and serve customers well.

Leadership is one of the most critical factors for success in business, and having a good leader who can build rapport with team members, inspire them to do great work, and keep them motivated ensures both the employee and customer experiences are positive.

Leaders can support a positive employee experience by providing job clarity, opportunities for professional development, autonomy, an inclusive work environment, regular recognition of contributions, healthy feedback, and a good work/life balance. 

Employee Engagement

Employee engagement is an employee’s emotional commitment to their work, the organization they work for, and its goals. It describes the bond an employee builds with their specific job and the organization.

Why Employee Engagement Matters

High engagement in an organization indicates that employees care about their work, are dedicated to the organization, and their attitudes and behaviors are aligned with the organization’s core values. 

Engagement is particularly important as employees who care more about an organization’s mission feel a sense of purpose in their roles and will be less likely to leave an organization they feel strongly connected to.  

This helps organizations avoid the high costs associated with turnover, which include the costs of recruiting and onboarding new employees, loss of productivity, and effects of disengagement on performance. 

Engaged employees are enthusiastic about their jobs and committed to the success of the organizations they work for. They demonstrate their dedication through behaviors that help organizations perform well, grow sustainably, and improve profits. 

How Leadership Impacts Employee Engagement

According to Business Leadership Today contributor Laurie Sudbrink, “Leaders affect employee engagement the most. A leader’s ability to authentically build relationships with team members, their level of self-awareness, their sense of accountability, as well as their health and well-being, can all have a significant impact on employee engagement.”

When employees feel a sense of purpose in their work that is culturally aligned with the organization’s mission, they are more engaged. Leaders help to articulate the organization’s vision and build buy-in with employees in a way that gives their work meaning and purpose. 

This is one of the most important ways leaders help their organizations succeed because meaningful work is also tied to employee experience, an employee’s level of motivation, and whether or not they will stay with an organization. 

How to Boost Employee Engagement

To see a real boost in employee engagement, leaders should also be engaged in leading their teams and authentically demonstrating their dedication to the organization’s core values through real, impactful actions and behaviors that guide employees.

One important way leaders do this is by setting clear, achievable expectations for employees. 

We recently sat down with Dr. Paul Marciano, a leading authority on employee engagement and author of Let’s Talk About It: Turning Confrontation into Collaboration at Work, to discuss leadership’s important role in expectation-setting and why leaders should be intentional about not just what they communicate, but also how they communicate:

“If I’m a boss and I’ve asked someone to do something, if they haven’t achieved it the first place I need to look is in the mirror and say ‘Have I communicated this correctly, is there something I can do to help this person understand this expectation better?’”

YouTube video

Employee Retention

Employee retention refers to an organization’s ability to retain its employees. A high rate of retention is achieved by reducing employee turnover, which refers to employees leaving a job due to being discharged, terminated, resigning, or abandoning their job. 

Why Employee Retention Matters

Employee retention is a big concern for companies because retaining talented employees is important for an organization’s financial sustainability due to the expense of turnover. 

High turnover can be very costly for businesses. The costs of recruitment, onboarding, training, loss of productivity, and loss of institutional knowledge can put a real dent in profits, and the resulting pressure it puts on employees who stay can hurt morale and lead to more turnover. 

A good rate of retention is essential for maintaining high levels of productivity, job expertise, employee engagement, employee satisfaction, employee sustainability, and customer satisfaction and retention, which also all have a profound impact on profitability.

How Leadership Impacts Employee Retention

Because leadership can impact the employee experience, the work environment, its culture, and, therefore, employee engagement, leaders play an important role in employee retention.

I recently sat down with Dick Finnegan, author of The Power of Stay Interviews for Engagement and Retention and a world-renowned expert on stay interviews, employee engagement, and cutting turnover, to discuss the very important role leaders play in retaining employees. 

Finnegan says, when it comes to retention, an employee’s direct supervisor wields a great deal of influence on whether or not they stay: 

“What I realized was that everything I had been taught about turnover in HR was wrong. What I learned was that you win turnover leader by leader, supervisor by supervisor. Turnover issues don’t arise from the top of the org chart, they come from the bottom. Most employees don’t leave because of the actions of the CEO, they leave because of the actions of their direct supervisor.” 

YouTube video

How to Boost Employee Retention

Ensuring that leaders at all levels within the organization are modeling core values and forging trust-based relationships with staff is an important component of any organization’s retention strategy. 

This process can begin at recruitment. 

Hiring for cultural fit is always good for retention, but it is also good for succession planning. When management positions open up in the future, you may already have a good candidate pool within the organization if you’ve hired for cultural alignment. 

Investing in leadership development for your top talent and offering career pathing and other professional guidance are great ways to hold onto employees with the skill set the organization needs, to ensure the organization’s cultural DNA is not lost due to attrition.

Since turnover can be so costly, strong retention strategies are crucial to recruiting and engaging the best talent and ensuring future profitability. But these strategies should not just be about profits; to keep talented and engaged employees, you have to provide a positive employee experience. 

Employee Motivation

Motivation drives an employee’s success and plays a vital role in employee engagement, performance, and retention. There are two types of motivation: intrinsic and extrinsic.

Why Employee Motivation Matters

Motivation is essential to getting employees to do their jobs well and helping an organization achieve long-term success. 

Extrinsic motivators, such as praise, approval, awards, bonuses, and promotions can influence employees, but intrinsic motivators, which are tied more closely to inherent, less tangible rewards, play a significant role in how invested employees are in their jobs and how well they do them. 

Motivated employees show up for more than just a paycheck. Because they are invested in the organization’s vision, they work well because they know the work they do is meaningful and has an impact. 

How Leadership Impacts Motivation

The primary role of any leader is to inspire and motivate their teams to give their best at work every day. However, only 2 in 10 employees strongly agree that their performance is managed in a way that motivates them to do outstanding work. 

Too often, those in management positions fail to realize how essential the ability to motivate teams is to future success and the very important role intrinsic motivation plays in getting employees to engage with their work and perform well.

If we expect great work from our teams, we have to understand what motivates them to engage with their work and invest in the success of the organization, with the understanding that their success as an employee is closely tied to the organization’s success.

How to Boost Employee Motivation

Motivating employees to reach their full potential and do great work is a leader’s most important job, yet managers and supervisors aren’t typically trained in the fine art of motivating employees. 

It’s a skill all good leaders continually work at. 

Leaders need to understand what really motivates their employees to best meet their needs and should work continuously to create the necessary conditions for their employees to stay motivated and help them identify and remove obstacles to doing great work.

Leaders can motivate their employees to do outstanding work by offering them flexibility, autonomy, the opportunity to advance and grow, recognition for their achievements, and a sense of purpose in their work. All these factors can contribute significantly to an employee’s overall well-being. 

Leaders who have motivated teams that perform well don’t just manage performance, they manage each individual team member in a way that is conducive to high performance. 

But it’s not just about ensuring the day-to-day work of the team is done; it’s about inspiring each team member to fully invest in their roles and reach their full potential.

Matt Tenney has been working to help organizations develop leaders who improve employee engagement and performance since 2012. He is the author of three leadership books, including the groundbreaking, highly acclaimed book Inspire Greatness: How to Motivate Employees with a Simple, Repeatable, Scalable Process.

Matt’s ideas have been featured in major media outlets and his clients include numerous national associations and Fortune 500 companies.

He is often invited to deliver keynote speeches at conferences and leadership meetings, and is known for delivering valuable, actionable insights in a way that is memorable and deeply inspiring.

Others Recent Articles and Podcast Episodes

Would you like to dramatically improve employee engagement?

Get a free training video that will show you how to double the number of engaged, motivated employees in just a few months.