The 10 Traits of an Effective Leader in Business

What are the top traits of an effective leader in business? How can developing these traits help you to succeed in your career?

In his book Business Made Simple, Donald Miller says that businesses are much more likely to notice and promote people who quantifiably bring more money into the company. With this in mind, Miller’s book describes the ten traits of an effective business leader capable of adding value to an organization.

Keep reading to find out the ten traits of an effective leader in business, according to Miller.

10 Traits of an Effective Leader

According to Business Made Simple author Donald Miller, to succeed in business, you must add value to the company. This means being able to make money for a company. If you can do this, you’re far more likely to rise within an organization or find success starting your own business, because the only thing leaders and investors care about is your ability to generate value. Miller claims that the first step to becoming a good investment is strength of character. According to him, you can showcase yourself as an asset for your company by developing the below ten traits of an effective leader.

Trait 1: You See Yourself as an Economic Asset

Effective leaders view themselves as entities that can provide value to a company (rather than merely as employees). To develop this trait, learn how to quantify and explain what value you add—for instance, how many sales you made last year and what revenue those brought in. Additionally, try to earn back for the company at least five times your salary: This nets the company a modest profit. 

(Shortform note: There’s a growing business trend that argues that instead of viewing yourself as either an employee or a value-creator, you view yourself as an important part of a business’s culture. Since the Covid-19 pandemic, businesses are increasingly focusing on creating work environments that make employees healthy and happy, and therefore productive. In other words, they’re moving away from a perspective that sees employees solely as investments and toward a perspective that sees them as people with personal needs and goals, which a job must meet.)

Trait 2: You’re an Active Agent in Your Life

If you see yourself as a victim and make excuses for why you’re not performing your best, you’ll never succeed or become a good investment for your company, asserts Miller. Actively pursuing new goals to learn and grow is also a trait of an effective leader.

(Shortform note: Seeing yourself as an active agent is tantamount to having an internal locus of control. This is a concept in psychology that indicates how in control of your life you feel: An internal locus means you feel in control of your fate, while an external locus means you feel you have little control over your life. Generally, feeling that you have agency indicates good mental health.)

Trait 3: You React to Problems Calmly

Being able to react to problems calmly is a trait of an effective leader. You’ll accomplish more and earn the respect of your peers if you can respond to problems with greater equanimity than the situation might truly merit. Problems suck up mental energy, so being able to solve them gracefully saves you and others energy. 

(Shortform note: This advice may seem difficult to act on at first, but meditation and mindfulness might help you respond to problems gracefully. When facing a crisis, take a minute to breathe mindfully in a quiet place. Then, proceed with what you were doing. Investing energy into a brief meditation often can prevent you from mindlessly investing more energy in a problem.)

Trait 4: You Gladly Accept Feedback

Feedback helps you excel, even if it may be difficult to face at first. Consider actively and regularly seeking out feedback from mentors and friends. 

(Shortform note: You might get more out of a feedback request if you ask for a specific type of feedback: an evaluation of your standing, coaching on how to improve, or appreciation of your efforts and abilities.)

Trait 5: You Manage Conflict Productively

You understand that to advance as an effective leader, you’ll need to confront and navigate conflict. Miller recommends dealing with conflict in four steps: 

  1. Accept conflict as part of moving forward. 
  2. Avoid intense negative emotions, as these exacerbate the conflict. 
  3. Show respect for the person you’re in conflict with to prevent their defenses from being raised. 
  4. Aim for resolution, not for being right. 

(Shortform note: There are other approaches to conflict management, some of which advise you to conduct a self-analysis of your role in the conflict—something Miller doesn’t ask you to do. To perform this self-analysis, you’d ask yourself what started the conflict, who you’re mad at, what goal you want to achieve that you’re not currently achieving, and what you fear losing. In Miller’s four-step conflict management approach, this self-analysis might fall after the first step: Once you’ve accepted the conflict, you’d then logically consider your part in it before talking it out with the other person.)

Trait 6: You Prioritize Being Respected Over Being Liked

One important trait of an effective leader is recognizing that it’s more important for the success of the company and team that others trust you rather than like you. Earn trust by setting clear goals, ensuring everyone knows their individual responsibilities, and rewarding them when they fulfill those goals and responsibilities. 

(Shortform note: In The Success Principles, Jack Canfield adds another, perhaps less appealing, way to maintain your team’s trust: by taking responsibility for bad outcomes that were the result of your decisions. While owning up to mistakes may sound unpleasant, in the long term, it’s better for you and the team because you avoid sowing distrust by deflecting responsibility.) 

Trait 7: You’re Action-Oriented

You habitually see projects through to completion, understanding that it’s not enough to intend or plan to do something: You must actually do it. 

Trait 8: You Trust That You Know What to Do

When you trust and act on your knowledge, you advance faster than if you procrastinate or feign confusion to avoid a difficult decision. 

(Shortform note: The two above traits are psychologically related: When you trust that you know what to do and that you can execute tasks—a concept referred to in psychology as self-efficacy—you tend to be more action-oriented. What’s more, you’re more likely to bounce back from setbacks, a trait we might imagine being well-placed on this list.)

Trait 9: You’re Overwhelmingly Positive

Feeling optimistic about the outcomes of your actions means you take more risks, which means you reap greater rewards in the long run. 

Trait 10: You Believe You Can Improve

When you believe in your capacity to get better, you don’t give up after a failure, seeing it instead as a growth opportunity. You also take on greater challenges because you believe you can rise to meet them. The result of this is that you do grow and improve, which leads to more responsibility and higher pay. 

(Shortform note: In The Happiness Advantage, Shawn Achor contends that the above traits of positivity and belief in your ability to improve are especially important in difficult situations. He describes the three responses you can have to a problem: to keep mulling it over and accomplish nothing, to exacerbate the problem through another bad decision, or to take the opportunity to grow and improve. Only when you believe you can improve as a result of adversity will you have the third response and grow.)

Exercise: Enhance Your Leadership Traits

Now that you’ve learned Miller’s ten traits of an effective business leader, try the below thought exercise to practice enhancing your leadership skills.

  • Consider which of Miller’s 10 value-adding character traits you could improve, and determine specific actions you can take to do so. 
  • Review Miller’s 10 value-adding character traits. List three that you either don’t yet possess or could improve on. 
  • Now, for each trait, list several specific ways in which improving on it would benefit you in the workplace. How would enhancing these traits help you grow? (For instance, if you work on seeing yourself as an active agent in your life, you might be asked to take on more projects and you could ensure your voice is heard more often.)
  • Finally, write down one or two specific actions you’ll take this week to build on those traits at work. (For instance, to see yourself as a more active agent in life, you might schedule a meeting with your boss to discuss improvements to the team’s workflow you’ve been thinking about.) 
The 10 Traits of an Effective Leader in Business

Emily Kitazawa

Emily found her love of reading and writing at a young age, learning to enjoy these activities thanks to being taught them by her mom—Goodnight Moon will forever be a favorite. As a young adult, Emily graduated with her English degree, specializing in Creative Writing and TEFL (Teaching English as a Foreign Language), from the University of Central Florida. She later earned her master’s degree in Higher Education from Pennsylvania State University. Emily loves reading fiction, especially modern Japanese, historical, crime, and philosophical fiction. Her personal writing is inspired by observations of people and nature.

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