People are the most valuable asset of a company. Developing people is the key to building a successful company. Companies gain competitive advantage by investing in leadership development and building a healthy, high-performance culture, on a foundation of feedback and support.

Great leaders inspire people to act.

Inspiring others provides a person his or her greatest opportunity to impact the world. Like moths to a lightbulb, people flock to great leaders who can inspire them to work collaboratively toward a common goal. People follow great leaders because they want to, not because they have to. Leaders are evangelists who believe that the product, service, or cause they are selling creates value and solves an important problem in the world. Their words are authentic because they are passionate and believe in their mission. This authenticity cultivates trust, and trust builds relationships that inspire loyalty in customers, employees, and followers.

Great leaders recruit diverse skills, personality traits, and viewpoints to solve big problems.

The world is complex. An effective leader, recruits team members who are cognitively diverse and possess complementary skills. Collectively, the group will be smarter and wiser than any one individual on the team. A high-performing team includes not only diverse skills but also diverse viewpoints. Individuals bring different mental models, experiences, and world views, creating an opportunity for a competition of ideas that reduces blind spots and spurs innovation. Diverse personality traits are also an important ingredient for success. The Big Five personality traits are defined as openness to experience, conscientiousness, extraversion, agreeableness, and neuroticism. Consider these traits when selecting people for specific roles and ensuring balance across the team. For example, you want your sales leader to score high in extraversion, but that is not as necessary for your bookkeeper.

Great leaders do not fit one mold.

People choose to follow leaders with different personalities, backgrounds, skills, and experience. Author Simon Sinek, in his book “Start With Why,” identifies the common attribute of great leaders as the ability to inspire people about a purpose, cause, or belief. They all start by asking, “Why does this (product, service, or cause) exist?” The answer to that question grows into the central focus of the leaders’ communication strategy, which they use to connect with people’s hearts. Great leaders first tap into the part of our brain called the limbic brain, which controls emotional decision-making. Only after connecting to our emotional center do they follow up with logic and reason, which are processed in the rational part of our brain called the neocortex.

Steve Jobs, Oprah Winfrey, Elon Musk, Martin Luther King Jr., and the Wright brothers have all employed this communication strategy. People may claim to buy Apple products because of quality, service, and features, but most people buy Apple products because it fulfills an unconscious desire to be respected by people they want to associate and connect with. Our need to belong is primal and baked into our DNA. As marketing guru Seth Godin loves to say, there is nothing more powerful than tribal marketing that focuses on helping “people like us do things like this.” I’m not suggesting that you can’t build a successful business based on price, quality, or features, but these strategies don’t produce loyalty, and you risk becoming a commodity in a crowded field, competing on price in a race to the bottom.

Great leaders develop new leaders.

Human capital is the most under-optimized asset class. One of my biggest mistakes in running my past companies was not making leadership development and mentoring a top priority. Prioritizing employees over customers may sound counterintuitive, but employees are an organization’s most valuable asset, and they are the ambassadors of the company. Leadership development starts with personal development. In a Harvard Business Review article, “Leadership that gets results,” author Daniel Goleman cites a study that links emotional intelligence to business results. The study is based on a random sample of 3,871 executives from a database of 20,000 executives worldwide. Unlike IQ, which is largely genetic, emotional intelligence can be learned through training, practice, and commitment.

Great leaders create a culture of high performance.

A group of people who come together around a common set of values and beliefs share a culture, which is a term for how people act and communicate with each other. People improve when they are given constructive feedback and support, and feedback cultures drive success and continuous improvement. Build a healthy, high-performance culture on the foundation of reciprocal feedback that is frequent, direct, and constructive. Healthy feedback requires trust. The intention of the giver must be to help the receiver grow, and the receiver must value the giver’s perspective, even if they disagree.

Effective feedback is specific, with the giver providing examples and a recommended solution to the problem. Both parties should practice active listening—repeating back key points before responding to ensure effective communication. Invest in personalized coaching for all managers and track their performance.

Great leaders take these 10 actions.

1. Be trustworthy. Display integrity and be consistently open, honest, and vulnerable.
2. Show humility. Surround yourself with people smarter than you.
3. Be self-aware. Monitor and understand your emotions and build your team around your strengths and weaknesses.
4. Show empathy. Take an active interest in understanding other people’s perspectives and emotions and practice active listening.
5. Pursue a growth mindset. Be curious and seek out opportunities to gain knowledge.
6. Embrace responsibility. Lead by example, regulate your emotions, own your mistakes, and act on feedback.
7. Be persuasive. Communicate your ideas clearly.
8. Be optimistic. Believe in your team’s ability to solve problems and in your ability to spot future opportunities that other people can’t see.
9. Be supportive. Set clear boundaries and expectations, provide incentives and opportunities for growth, remove roadblocks, and invest in building relationships by being generous with your time and advice.
10. Stay connected. Make people feel that they belong, consistently share key success metrics, create reciprocal feedback loops, and reinforce vision and mission daily.

Great leaders avoid 4 damaging behaviors.

Dr. John Gottman is a world-renowned psychologist and co-founder of The Gottman Institute,  which has conducted breakthrough research on relationships and communication for over 40 years. The Gottman research suggests that leaders should avoid these four behaviors that undermine healthy relationships and prevent the development of a high-performance culture.

1. Criticism. Disagree about ideas, but don’t attack the person or their character.

2. Contempt. Do not be mean, treat others with disrespect, mock them with sarcasm, call them names, or roll your eyes.

3. Defensiveness. Take responsibility for your role in the situation.

4. Stonewalling. When frustrated, do not shut down, withdraw from the conversation, and stop responding.

Summary

Great leaders inspire action, rather than manipulating people to act through the use of carrots and sticks. Great leadership inspires loyalty. Start with “why” to trigger emotionally driven decisions and then support those emotions with facts. Provide an opportunity for people to be a part of something bigger than themselves. Build teams with diverse skills and viewpoints to encourage a competition of ideas. We can all learn to lead and develop new leaders. Invest in coaching and leadership development and create a healthy culture built on feedback and support.