Many people become “leaders” by promotion: a title changes, a team is assigned, authority is granted. Yet everyone has worked for someone with a leadership title whom nobody would follow if they did not have to, and many have worked alongside someone with no title whom everyone listened to. The difference is the difference between positional power and personal power.
One useful definition describes leadership as personal power, exercised as influence, that creates a progressively advancing community moving towards a common vision. Each part of that definition points to something leaders need to build. This article unpacks the five components, draws four lessons from studies of high-stakes teams, explains why ownership is the most critical leadership competency, discusses how to identify leaders when hiring and promoting, and offers a self-assessment.
Five components of leadership
1. Personal power, not positional power
Positional power comes from a title. People comply because they must. When the position goes, so does the influence. Personal power comes from character, competence and trust. People follow because they want to. History offers many examples of leaders whose influence far exceeded any formal position they held, and of office-holders whose authority evaporated as soon as they left.
Personal power starts with self-leadership: how effectively you manage yourself, including your discipline, emotions, integrity and consistency. Leaders who cannot lead themselves struggle to lead others.
2. Influence: interpersonal effectiveness
Influence is how effectively you work with and through other people: communicating, listening, persuading, resolving conflict and building relationships. It grows from personal power, not from position.
3. Progressive advancement: organisational effectiveness
Leadership is not a single heroic act. It is the continuous improvement of the organisation. Leaders build processes and standards that allow the organisation to keep growing and improving, in the quality of its inputs and outputs, in efficiency and in capability. A leader who achieves results only through personal effort, without building systems, leaves nothing lasting.
4. Community: leaders of leaders
Great leaders do not just gather followers. They develop leaders, who develop more leaders. As this happens, a community forms that extends beyond employees to suppliers, customers, partners and investors who share in the organisation’s progress.
5. A common purpose
The first four components are held together by a shared purpose. If a leader’s purpose is only personal gain or stability, people will work with them only as long as it suits them. When leaders connect their goals with the goals of the people around them, people commit for the long term. Community is built on common purpose.
All five components matter. Missing any one weakens leadership significantly.
Four lessons from high-stakes teams
Management writers have drawn leadership lessons from mountaineering expeditions, including the 1996 Everest disaster, in which several climbers died. Expeditions are high-stakes, team-based projects in which leadership decisions have life-or-death consequences. Four lessons translate well into business.
Lesson 1: Leaders should be guided by the group’s needs
Titles can go to people’s heads. Leaders start believing that whatever they decide is right and that the team must simply follow. Effective leaders understand and respond to the needs of the group. That does not mean leadership by vote. The leader still decides. But decisions should reflect the group’s needs, capabilities and condition.
On a mountain, a leader must watch every member’s health and decide whether someone should continue or turn back. In business, a leader must understand the team’s workload, capability and morale before committing it to a goal.
Lesson 2: Sometimes the hardest decision is not to act
Organisations often reward visible, aggressive action. But effective leadership balances action with judgement about when to wait, hold back or turn around. Experienced leaders with deep foundations tend to reduce risk because they recognise when action would be reckless.
A climber who rushes ahead alone, determined to reach the summit, may neither reach it nor return. An employee who becomes a star performer quickly through intense effort may not be the best long-term leader if their success depends on unsustainable pace or ignores risk. Look for consistent performers with sound judgement.
Lesson 3: If your words don’t stick, you haven’t spoken
Communication is the most important leadership skill. If you speak and people ignore it, you are a leader in title only. Leaders must communicate clearly, often and in ways that inspire action. Business owners should meet their leadership team at least weekly, because communication gaps quickly become leadership gaps. People follow leaders whose words are clear, consistent and backed by action.
Lesson 4: Speaking up the hierarchy can seem wrong when it is right
In many organisations, middle managers and junior staff hesitate to report problems, either to protect themselves or because they think the issue is too small. Some of the most serious failures, in mountaineering, aviation, medicine and business, have occurred when people saw warning signs but did not speak up, or were not heard.
Leadership is a skill and an attitude, not a position. Anyone who sees something important should raise it. Leaders must build a culture where that is safe and expected, sometimes described as psychological safety, a term associated with Harvard researcher Amy Edmondson. Some leaders make themselves directly reachable by anyone in the organisation and respond personally. The goal is an organisation that is open in communication but clear in leadership, so information flows freely while decisions are still made decisively.
Ownership: the most critical leadership competency
If one competency separates leaders from managers, it is ownership. A person with ownership treats the whole outcome as their responsibility, not just their own task. When something is not working, they act. They help colleagues, fill gaps, raise issues with senior management and push for solutions until the project succeeds.
Ownership shows in everyday behaviour:
- They follow through without being chased.
- They raise problems early, with proposed solutions.
- They do not say “that’s not my job” when the outcome is at risk.
- They take responsibility for mistakes and fix them.
- They care about results beyond their own area.
Identifying leaders when hiring and promoting
Hiring the wrong leader is expensive. Senior hires cost more, take longer to replace and affect many people. To reduce the risk:
- Test skills relevant to the role.
- Test ownership by giving candidates realistic, challenging situations, either as case exercises during selection or as defined assignments in an initial period, and observe whether they take end-to-end responsibility.
- Check references specifically about ownership, judgement, communication and how the person handled problems.
- Assess against the leadership components: personal effectiveness, influence, building systems, developing others and connecting to purpose.
Where possible, develop leaders from within. Internal candidates know the business, its culture and its history. They have seen good and bad times, and colleagues already know them. As a business grows, for example from dozens to hundreds of employees, a strong internal leadership pipeline is often more reliable than external hires, though outside hires can bring valuable new capabilities.
The emotional balance sheet
Business leaders sometimes describe the relationship between people and the organisation as an emotional balance sheet:
- Privileges: what people receive, such as salary, benefits, recognition, development, promotion, flexibility and opportunities.
- Obligations: what people contribute, such as effort, loyalty, results and commitment.
A healthy relationship balances the two. The mistake is trying to balance it by cutting privileges while demanding more obligations, which breeds resentment. The better approach is to increase engagement, so that people willingly take on greater obligations while privileges are maintained or grow. That means building genuine relationships, engaging people emotionally, developing their capabilities, making them accountable and sharing success with them, financially and emotionally.
Engagement shows most in crises. There are well-documented cases of hotel staff who risked their lives protecting guests during terrorist attacks, an extreme example of the commitment that deep organisational bonds can produce.
Developing leadership capability across the business
Leadership is not reserved for the owner and senior managers. Supervisors, team leaders, project engineers and experienced tradespeople all lead, formally or informally. A business that develops leadership at every level is more resilient and grows faster. Practical ways to build it include:
- Stretch assignments: give promising people projects slightly beyond their current capability, with support.
- Mentoring: pair emerging leaders with experienced ones for regular conversations.
- Short, practical training in feedback, coaching, delegation, conflict resolution and running meetings.
- Exposure: invite emerging leaders to customer meetings, management reviews and planning sessions so they see how decisions are made.
- Feedback: give emerging leaders honest, specific feedback, and teach them to ask for it.
- Reflection: encourage leaders to review what went well and what they would do differently after significant events.
- Recognition of leadership behaviour: acknowledge people who help colleagues, raise problems early, take ownership or develop others, not just those who hit individual targets. What gets recognised gets repeated.
A leadership self-assessment
Rate yourself on each statement as always, sometimes or never. Then ask a trusted colleague to rate you too, and compare.
- I can calm myself even when I am under stress.
- I speak first and think later. (Lower is better.)
- I display the same standards of behaviour that I expect from others.
- In conflict, I think about how to preserve the relationship while still meeting my needs.
- I give feedback only after observing enough instances to be accurate.
- I wait until a speaker has finished before formulating my response.
- I encourage speakers with prompts such as “tell me more”.
- I am surprised to find that people have not understood what I said. (Lower is better.)
- I put myself in the other person’s shoes during conversations.
- When people talk to me, I see my own agenda first and their perspective second. (Lower is better.)
- I remember most of what was said in long conversations, meetings and presentations.
- I can win over difficult people in difficult conversations.
- I carefully consider views different from my own.
- I find it easy to sell an idea to others.
- I can tell when someone is nervous or upset, even if they say otherwise.
- I can appear calm when a situation calls for it, even when I am not.
- When my team succeeds, I attribute it mainly to the team’s work rather than my leadership.
- I give credit when it is due, and I do not hesitate to criticise when necessary.
- I let my team have a say in decisions that affect it.
- I encourage team members to bring me their problems.
- I deliberately adapt my management style to the situation.
- I am tough on problems but not on people.
- I plan team meetings in advance and provide an agenda.
- When I reject a team member’s idea, I explain why.
- I encourage team members to think innovatively.
Statements where you answer “never” or “sometimes”, or where others see you differently from how you see yourself, point to areas to develop.
A worked example
A family-owned manufacturer promotes its best machinist to production supervisor. Within months, morale on the floor falls. The new supervisor, used to excelling individually, redoes others’ work, issues instructions without explanation and avoids difficult conversations.
The owner works with the supervisor using the five components. They identify that personal effectiveness, including technical skill and work ethic, is strong, but influence and developing others need work. The supervisor attends a short course on coaching and feedback, holds weekly one-to-ones with each machinist, and is asked to train two people to take over complex setups. The owner also models listening and explains decisions rather than just announcing them. Six months later, the supervisor has gained the team’s respect, output has improved and two machinists are developing as future leaders.
Summary
Leadership is personal influence, not positional power. It rests on five components: personal effectiveness, influence, continuous organisational improvement, a community of leaders and a common purpose. High-stakes teams teach four lessons: be guided by the group’s needs, recognise when not to act, communicate so your words stick, and build a culture where people speak up. Ownership is the most critical leadership competency, so test for it when hiring and develop it from within. Balance the emotional balance sheet by increasing engagement, not cutting privileges, and use regular self-assessment to keep improving.
Sources: small-business training notes on leadership effectiveness, a four-point leadership framework drawn from mountaineering lessons, and building successful managers, together with published work on psychological safety by Amy Edmondson. Examples are illustrations.
