10 Leadership Principles That Create Effective Leaders

Remember the film Wolf of Wall Street with Leonardo DiCaprio? The business leaders were aggressive, selfish, obnoxious, and just overall unapproachable. And while this authoritative, cutthroat leadership style worked in the 20th century, this would never fly in a millennial and Generation Z-led tech world.

People want to be led with humanity, empathy, and kindness. They want a work environment where they  feel like they are part of a bigger purpose rather than just a number on the payroll.

According to companies like Microsoft, Amazon, and Apple, this is the only way to effectively lead in today's world. So in this article, let's take a closer look at some of the leadership principles that many Fortune 500 companies are using to ensure success in the 21st century and what small businesses, startups, and entrepreneurs can learn from them.

Here are 10 leadership principles that top companies use to promote incredible work culture and motivated team members.

1. They are Transparent

When I think about transparency, the first company that springs to mind is Marriott International, where late CEO Arne Sorenson’s leadership helped steer the organization through the peak of the global COVID-19 pandemic.

Sorenson believed in leading with authenticity and transparency. This shone in his emotional six-minute video to Marriott's stakeholders, in which he candidly shared the impact of the pandemic on the business, and offered his support and guidance.

The power of this video was felt by employees, clients, and shareholders alike. It allowed them to see the human quality in a leader who was willing to make himself vulnerable during difficult times. And with that, Sorenson’s transparent leadership qualities enabled him to foster a sense of trust with Marriotts employees, customers, and shareholders who felt heard and understood during such an uncertain time.

2. They are Servers

By this, I don't mean the kind of servers you find at a restaurant. I'm referring to true service mentality, where effective leaders prioritize creating an environment that puts people first and empowers them to do their best work.

Satya Nadella, CEO of tech giant Microsoft, is the perfect example of a good leader who operates with a server mentality. Since joining the company in 2014, Nadella has created an impressive turnaround story for the company by focusing on creating high levels of trust between teams and implementing various cultural initiatives to promote learning and growth across teams.

Nadella believes that effective leadership requires him to be of service to his employees. He knows that when each team member is provided with the support and resources they need, their individual success will translate into collective success for Microsoft as a whole.

3. They are Great Listeners

Satya also believes that the most important leadership behavior is to be an active listener.

Satya Nadella's book, Hit Refresh, emphasizes the importance of listening as a key leadership trait. In the book, Nadella explains how effective leaders create an environment where everyone feels connected, valued, and heard. He believes that by asking the right questions, actively listening to the ideas of their team, and encouraging honest communication, they can build stronger relationships throughout their organization.

4. They are Value Champions

Johnson & Johnson has long been known for its famous credo, which has followed them since 1943. In the first paragraph of the credo, it states:

"Our Credo challenges us to put the needs and well-being of the people we serve first."

This credo speaks volumes about their leadership values. It serves as a reminder that businesses need to be built on a foundation of service, not profits. As such, the company's decision in 1982 to quickly stop its production of Tylenol was a testament to its high standards, strong leadership, and commitment to its core values. This is why, in the wake of seven deaths from staged poisonings, Johnson & Johnson acted swiftly and decisively in removing all Tylenol capsules from store shelves.

It was a difficult decision, but one that enabled the company to demonstrate its commitment to its core values and prioritize the safety of those they serve. Because of this, they will always be remembered for their leadership and dedication to their customers.

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5. They are Diversity Promoters

A Fortune 500 leader that lives and breathes company culture and diversity is Brian Cornell, the CEO of Target Corporation. As a result of Cornell's dedication to diversity and inclusion initiatives, the company has had numerous successes.

During the pandemic, the company increased promotions for people of color by 62%, decreased turnover among people of color by over 33%, and increased promotions of women to senior leadership positions by 16%, resulting in women comprising 50% of all leaders at Target, a top-line growth by $30 billion.

6. They Plan Strategically

A strategic planner is an effective leader who can take a long-term, holistic view of the business. They are able to think through the various facets of the business, look at the big picture, and come up with a clear vision, and intelligent solutions to long-term challenges. And Google co-founders Larry Page and Sergey Brin are the perfect example of this.

Since launching in 1998, Google has grown to become one of the most successful tech companies in the world. From the most used search engine in the world to its innovative products like Google Maps and Gmail, Page, and Brin have been able to anticipate customer needs before they even arise.

This strategic approach to planning and anticipating customer needs has enabled Google to become a leader in innovation and technology across the world. They knew that they needed to think long-term in order to be successful, and this has resulted in tremendous success for the company.

7. They are Always Learning

Across the board, the best leaders, including the ones mentioned above, possess the ability to think critically and learn continuously. They are never content with the status quo, but instead, they strive to stay ahead of the curve.

Amazon CEO Jeff Bezos credits much of Amazon’s success to his willingness to question everything and always look for new opportunities. This approach has allowed Amazon to stay ahead of the competition, and as such, they have become an industry leader that continues to disrupt traditional markets.

8. They are Innovators

Innovation is key to success, and this concept is no stranger to Apple Inc. CEO, Tim Cook.

Since taking the helm at Apple in 2011, Cook has pushed the company outside its comfort zone by introducing new products such as Apple Music and AirPods, while also pushing into uncharted markets like health care and lifestyle technology. As a result of his innovative leadership, Apple has seen tremendous success in its products and bottom line.

9. They are Adaptable

Every business is going to go through its challenges. But it is those leaders who can remain agile and adapt to these changes who will ultimately succeed. They can adjust their strategies, processes, and tactics in order to stay ahead of the competition.

One of the most iconic examples of this is Netflix CEO, Reed Hastings. As the DVD rental industry was being disrupted by streaming services in the late 90s, and early 2000s, Hastings was quick to pivot and launch a streaming service that now has over 232.5 million subscribers worldwide.

And that is the power of adaptability in good leadership. With generative AI taking the world by storm, this leadership trait is going to be even more critical if organizations want to remain competitive.

10. They Recognize a Job Well Done

Recognizing a job well done does wonders for job satisfaction, employer loyalty, and employee performance. And good leaders know that.

Take Starbucks CEO Kevin Johnson for example. After taking over from former CEO Howard Schulz in 2017, he quickly implemented a new stock appreciation award program, which gave stock bonuses to employees who have been continuously employed with the company for 2 years or more, a thank-you for their loyalty.

And of course, unsurprisingly, under Johnson's tenure, Starbucks has seen tremendous growth and record profits, a testament to the power of recognizing employees and their hard work.

A culture of recognition starts with you! The Employee Spotlight Guide is here to help

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In the end...

While the examples above are only a snapshot of the leadership skills that future leaders must possess, they are an excellent starting point to begin your own leadership journey.

Whether you are a leader in a start-up, a small business, or even a Fortune 500 company, remember that great leaders are always learning, innovating, adapting, and recognizing their team’s hard work.

By implementing these principles in your own leadership style, you too can achieve success in whatever field you choose to lead. It's worked for some of the world’s most successful companies, and it can work for you.

Looking for ways to help recognize your team? Book a demo with our team to learn how Cooleaf can help!