Discover why leadership is important for success. Learn leadership's impact on engagement, performance, and results backed by research and statistics.
Written by Laura Bouttell • Wed 31st December 2025
Leadership is important because nothing significant happens without it. Research from Gallup demonstrates that managers account for 70% of the variance in employee engagement—a statistic that reveals leadership's outsized influence on everything organisations try to accomplish. When leadership is effective, teams engage, strategies execute, and results follow. When leadership fails, the same inputs produce dramatically inferior outcomes.
Yet leadership's importance extends beyond organisational contexts. Throughout human history, leadership has determined which groups thrived and which perished, which societies advanced and which stagnated, which causes succeeded and which failed. Understanding why leadership matters reveals fundamental truths about human coordination and collective achievement that apply across all domains.
Leadership is essential because human groups require coordination, direction, and inspiration to accomplish collective goals. Without leadership, groups default to entropy—disorganised, directionless, and ultimately ineffective. Leadership provides the organising force that transforms random individual effort into coherent collective action.
Core leadership functions:
| Function | Why It Matters |
|---|---|
| Direction setting | Groups need shared understanding of where they're going |
| Resource allocation | Competing priorities require decision-making authority |
| Conflict resolution | Disagreements need resolution mechanisms |
| Motivation provision | Sustained effort requires purpose and encouragement |
| Standard maintenance | Quality and ethics need enforcement |
| Change navigation | Transitions require guidance and support |
These functions don't complete themselves. Leadership ensures they happen effectively.
Groups without effective leadership experience predictable dysfunctions:
Decision paralysis: Without clear decision-making authority, groups endlessly debate without resolving. Decisions that leadership would make in minutes consume weeks in leaderless contexts.
Coordination failure: Individual efforts without coordination often contradict or duplicate each other. Leadership aligns effort toward common objectives.
Accountability void: Without leadership establishing and enforcing standards, performance varies wildly. Some contribute; others freeload.
Conflict escalation: Unmediated conflicts intensify rather than resolve. Leadership provides intervention mechanisms preventing destructive escalation.
Vision absence: Groups without leadership lack compelling shared purpose. Short-term concerns dominate; long-term positioning erodes.
Research consistently demonstrates these effects. The 77% of organisations reporting leadership gaps experience consequences directly: strategy execution failures, engagement deficits, talent attrition.
The relationship between leadership and engagement is perhaps leadership's most studied impact:
The 70% factor: Gallup's research shows managers account for 70% of the variance in employee engagement. This means leadership quality matters more than compensation, benefits, facilities, or most other workplace factors in determining whether employees engage or disengage.
The trust multiplier: Employees who strongly agree they trust organisational leadership are four times as likely to be engaged and 58% less likely to seek other employment. Trust in leadership transforms workplace experience.
The engagement crisis: Currently, only 23% of employees globally are engaged—matching record highs but leaving 62% disengaged and 15% actively disengaged. This engagement deficit costs the global economy approximately $7.8 trillion annually.
The manager training gap: Less than half of managers worldwide (44%) report receiving management training. Many leaders are "accidental managers"—promoted without preparation, struggling without support.
Effective leadership generates measurable outcomes:
Performance improvement:
Retention enhancement:
Safety and quality:
Innovation enabling:
Leadership's importance transcends commercial contexts:
Political leadership: Nations with effective leadership prosper; those with ineffective leadership decline. The difference between thriving and failing societies often traces to leadership quality at critical moments.
Community leadership: Local communities, voluntary organisations, and civic groups depend on leadership for direction and effectiveness. Communities with strong leadership networks demonstrate greater resilience and capability.
Family leadership: Families with effective parental leadership provide stable foundations for children's development. Leadership skills in family contexts shape future generations.
Social movement leadership: Every significant social change involved leadership catalysing and directing collective action. Progress doesn't happen spontaneously—it requires leaders who envision, organise, and persist.
Historical perspective reveals leadership's enduring importance:
Evolutionary origins: Leadership emerged in human groups for survival advantage. Groups with effective leaders out-competed those without, encoding leadership tendency into human social architecture.
Civilisational development: Every civilisational achievement involved leadership—from pyramid construction to constitutional governance to scientific revolution. Collective accomplishment requires coordination that leadership provides.
Crisis navigation: History's inflection points feature leadership prominently. Whether military, political, or social crises, outcomes hinged on leadership quality under pressure.
Institution building: Enduring institutions reflect their founders' leadership imprints. Organisations, nations, and movements carry leadership DNA across generations.
Vision represents leadership's direction-setting function:
Purpose provision: Vision answers "why we exist" and "where we're going." Without compelling vision, effort lacks meaning and direction lacks destination.
Motivation generation: Vision that resonates with human aspiration generates motivation exceeding what external incentives can produce. People work for paycheques; they strive for purpose.
Decision guidance: Clear vision simplifies decisions at every level. When everyone understands direction, choices align naturally.
Talent attraction: Compelling vision attracts talented people who want meaningful work. Vision differentiates employers beyond compensation.
Legacy creation: Vision enables leaders to contribute beyond their tenure. Visions that persist shape organisations and societies long after their creators depart.
Trust represents leadership's relational foundation:
The current crisis: Fewer than one in four employees strongly agree they trust organisational leadership. This trust deficit undermines everything else leaders attempt.
Engagement enabling: Trust enables engagement. Employees who trust leaders invest discretionary effort; those who don't protect themselves through minimal contribution.
Communication effectiveness: Trusted leaders' communications receive credence; distrusted leaders' communications receive scepticism regardless of content.
Change acceptance: Trust determines whether change initiatives meet cooperation or resistance. Leaders without trust face opposition even for beneficial changes.
Psychological safety: Trust creates psychological safety enabling vulnerability, learning, and innovation. Distrusted environments produce defensiveness and risk aversion.
Consistency represents leadership's reliability foundation:
Predictability value: Consistent leaders enable planning and commitment. Inconsistent leaders create uncertainty paralysing initiative.
Credibility building: Consistency between words and actions builds credibility. Inconsistency destroys it regardless of other leadership qualities.
Culture creation: Consistent leadership behaviour establishes cultural norms. Inconsistent behaviour creates cultural confusion about what's actually valued.
Fairness perception: Consistent treatment feels fair; inconsistent treatment breeds resentment regardless of individual outcomes.
Stress reduction: Consistency reduces workplace stress. Employees under inconsistent leadership expend energy managing uncertainty rather than producing results.
Leadership failure produces cascading consequences:
Engagement collapse: Without effective leadership, engagement deteriorates. The 70% variance controlled by managers becomes 70% of the problem.
Performance degradation: Results decline as engagement drops. Quality suffers; productivity falls; innovation stalls.
Talent departure: High performers leave first. They have options; they exercise them when leadership disappoints.
Culture erosion: Without leadership maintaining standards, culture degrades. What leaders tolerate becomes the norm regardless of stated values.
Strategic drift: Without leadership providing direction, organisations lose strategic coherence. Tactical opportunism replaces strategic discipline.
The current leadership gap generates enormous costs:
The engagement deficit: With 77% of employees disengaged or actively disengaged, organisations operate at fraction of potential. The $7.8 trillion annual global cost represents just the measurable portion.
The training gap: With 56% of managers receiving no training, preventable problems proliferate. Untrained leaders make avoidable mistakes affecting everyone they lead.
The succession gap: With 77% of organisations lacking leadership depth, succession risk threatens continuity. Every leadership departure creates crisis rather than transition.
The trust gap: With only 23% of employees trusting leadership, organisational capability remains constrained. Distrust limits what leaders can accomplish regardless of their intentions.
The burnout epidemic: With 72% of leaders feeling used up at day's end, leadership sustainability itself is threatened. Burnout depletes the very resource organisations need most.
Given leadership's importance, development investment represents strategic necessity:
Capability building: Leadership capabilities aren't innate; they develop through intentional investment. Organisations that develop leaders build competitive advantage; those that don't hope for luck.
Pipeline creation: Development creates succession pipelines ensuring leadership continuity. Organisations without pipelines face crisis at every transition.
Engagement improvement: Better-developed leaders produce better engagement. Development investment addresses the 70% engagement variance directly.
Performance enhancement: Leadership development generates measurable performance improvement. The $7 ROI per $1 invested reflects development's performance impact.
Culture shaping: Development communicates and reinforces values, shaping culture through leadership behaviour. What leaders learn, they model.
Given leadership's fundamental importance, organisations should:
1. Select carefully
Leadership quality begins with selection. Hiring for technical skill without assessing leadership capability perpetuates the "accidental manager" problem.
2. Develop systematically
Provide training, coaching, and developmental experiences. Close the 56% training gap that leaves managers unprepared.
3. Support consistently
Leadership is demanding. Provide support preventing the burnout affecting 72% of leaders.
4. Measure meaningfully
Assess leadership impact through engagement data, performance metrics, and retention rates. What gets measured improves.
5. Reward appropriately
Align incentives with leadership effectiveness, not just functional results. Leadership quality deserves recognition.
6. Hold accountable
Leadership matters too much for poor leadership to persist. Address leadership failures promptly.
Several contemporary factors amplify leadership's importance:
Accelerating change: Rapid change requires adaptive leadership capable of guiding organisations through continuous transition.
Distributed work: Remote and hybrid work increase leadership challenge. Engaging and coordinating dispersed teams requires enhanced leadership skill.
Generational diversity: Multiple generations with different expectations require leadership flexibility previously unnecessary.
Stakeholder complexity: Modern organisations serve multiple stakeholders with potentially conflicting interests. Leadership must navigate this complexity.
Technology disruption: Technological change creates both opportunity and threat. Leadership determines whether organisations leverage or succumb to disruption.
Research identifies evolving leadership priorities:
Emotional intelligence: 42% of organisations enhance emphasis on emotional intelligence. Technical skill alone proves insufficient for modern leadership.
Hope cultivation: Gallup identifies hope as the number one leadership behaviour in 2025. Leaders who build hope while fostering trust, compassion, and stability outperform others.
Adaptability: In environments of continuous change, adaptive capacity matters more than fixed expertise.
Authenticity: Contemporary employees expect genuine leadership. Authentic leaders build trust that inauthentic leadership cannot.
Inclusive orientation: Diverse workforces require inclusive leadership ensuring all perspectives contribute and all people feel valued.
Leadership is important because it provides the direction, coordination, motivation, and accountability that groups require to accomplish collective goals. Research shows managers account for 70% of variance in employee engagement, and organisations investing in leadership development achieve 25% better business outcomes. Without effective leadership, groups default to disorganisation and underperformance.
Good leadership impacts organisations through improved engagement (4x higher for employees who trust leadership), enhanced performance (21% higher productivity in engaged teams), better retention (58% less job-seeking among trusting employees), greater innovation, and stronger culture. Well-led organisations consistently outperform poorly-led competitors across virtually every measurable dimension.
Leaders matter so much because they control the conditions determining whether people engage or disengage, perform or underperform, stay or leave. The 70% variance in engagement attributable to managers reflects leadership's outsized influence on organisational outcomes. Leaders shape culture, set direction, allocate resources, and create the experience that determines employee contribution.
Without good leadership, organisations experience engagement collapse (77% of employees globally are disengaged), performance degradation, talent departure (especially high performers), culture erosion, and strategic drift. The global cost of disengaged employees approaches $7.8 trillion annually. Leadership absence or failure produces cascading consequences affecting everything organisations attempt.
Leadership affects employee performance primarily through engagement, which in turn drives productivity, quality, and innovation. Employees with trusted leaders show 4x higher engagement and 58% lower turnover intention. Engaged teams demonstrate 21% higher productivity and fewer safety incidents. Leadership quality directly determines the discretionary effort employees contribute.
Leadership development is important because leadership capabilities develop through intentional investment rather than emerging automatically. With only 44% of managers receiving training, the development gap leaves leaders unprepared and organisations underperforming. Development investment returns approximately $7 for every $1 invested while building succession pipelines and improving engagement.
A leader becomes truly important through the positive impact they create—on engagement, performance, culture, and the people they lead. Importance comes not from position but from contribution: developing others, achieving results, building culture, navigating challenges, and creating conditions for collective success. Leaders' importance reflects their impact rather than their authority.
Why is leadership important? Because everything else depends on it. Strategy without leadership remains aspiration. Culture without leadership becomes accidental. Talent without leadership disengages. Performance without leadership plateaus. Change without leadership fails.
The statistics confirm what observation suggests: leadership accounts for 70% of engagement variance; trust in leadership quadruples engagement; leadership development returns $7 per $1 invested. These numbers reflect leadership's fundamental role in human achievement.
Yet statistics understate the case. Leadership matters because human groups require coordination to accomplish collective goals, and coordination requires someone to coordinate. Leadership matters because direction enables purpose, and people need purpose to sustain effort. Leadership matters because potential doesn't realise itself—it requires leaders who recognise, develop, and deploy it.
For organisations, the implication is clear: leadership capability determines organisational capability. Investment in leadership selection, development, and support represents the highest-leverage investment available. The organisations that thrive prioritise leadership accordingly.
For individuals, leadership importance suggests opportunity. Those who develop leadership capability position themselves to contribute at the highest levels. Leadership skill opens doors that technical expertise alone cannot.
Leadership is important because it always has been and always will be. Human groups require leadership for collective accomplishment. The question isn't whether leadership matters—it manifestly does—but whether you will develop the leadership capability to make your contribution.