Whether an inspirational type or managerial whiz, getting the best out of workplace pacesetters requires the personal touch.

So, you want to be a leader.

Effective leadership is fundamental for employee job satisfaction, engagement and overall wellbeing, as well as the ability of an organisation to realise profit. Although ideas and theories about good leadership abound, research findings about what makes a leader effective may surprise you.

The question has been pondered by some of the greatest thinkers since the earliest days of humanity.

From biblical leaders such as King Solomon, to the brilliant despot proposed by Machiavelli in The Prince, leaders have varied considerably in both style and approach, with profound consequences for collective and individual well-being. What is the difference between a leader, as opposed to a manager or a supervisor, for example?

What can leaders do to increase their influence?

Who should be a leader and how should their performance be assessed?

How leaders influence others

At a basic level, leadership is a form of interpersonal power and influence. However, not all forms of influence are equally effective.

The lowest form of influence is the "carrot and stick" approach, or rather the ability to dish out rewards and punishment.

Higher levels of influence are "expert power", which comes from having specialist knowledge or abilities, and "legitimate power", which is instilled upon an individual through their role in an established hierarchy.

The highest level of influence is "referent" power, when the leader embodies the deep-held identity and values of their team. Referent power allows the greatest leaders to inspire followers without relying on reward-based incentives such as bonuses or promotion.

It's the power exerted by celebrities and popular icons, as well as legendary leaders such as Alexander the Great, who rallied his troops by appealing to their identity as free citizens of Athens.

Are all leaders created equal?

These different power bases help us understand the difference between "transactional" and "transformational" leadership styles. Transformational leaders are charismatic and behave in admirable ways that cause their people to identify with them. They articulate a positive and obtainable vision for the follower and for the collective future.

Good transactional leaders, on the other hand, set up clear reward-based contingencies by specifying exactly what needs to be done and the benefits that the team member will get from doing it. A "manager" is generally thought to be more transactional, while a "leader" is distinguished by their ability to be more transformational and visionary.

Which style of leadership is most effective?

If you want to be effective as a leader, you should be thinking about both these elements. Scientific studies have found that both these styles of leadership are of value. It has been proposed that charismatic leadership is more relevant for leaders at the top echelons of the organisation, but research has not supported this idea. Essentially, the match between the abilities of the leader and the challenges faced by the organisation at a given time may be the strongest determinant of leadership success. Charismatic leadership may be of greater relevance in times of uncertainty or crisis, and, history provides examples such as the charismatic Winston Churchill, who lead England to victory during World War II but was replaced by the more pragmatic Clement Attlee once victory was assured.

Are leaders born or made?

Studies of identical twins show that around 30 per cent of charismatic leader ability is innate, while the remaining 70 per cent is due to life experiences and development opportunities. Also, leadership training improves performance by around 20 per cent on average.

What does this mean for organisations?

To decide who should lead, organisations need to consider the context in which the leader will operate, and the strategic goals they wish to achieve. There is no single x-factor that distinguishes the great from the mediocre, and all leaders can benefit from behaviours such as clear goal setting, rewarding team members punctually when objectives are achieved, and expressing a personal interest in their wellbeing. Organisations can enhance leader development by providing learning activities and adequate support.

Improving leadership does not depend on large financial investments, but rather the time and effort required for personal development and enhancing relationships with others.

Be a better leader

• Hold goal-setting meetings at least quarterly, in which clear expectations, as well as the rewards for meeting these expectations, are established.
• Use rewards to motivate your team, avoid threats or punishment. 
• Be available to your team in person and express interest in their personal wellbeing. 
• Promote a positive vision of your team members' future with your organisation and a group identity based on common values.

Tips for organisations

• Provide targeted learning opportunities such as stretch assignments and lateral rotations.
• Accompany these with coaching or mentoring as a means to encourage reflection.
• Appoint leaders based on underlying abilities and the specific challenges your business is facing rather than experience alone.