401-423-2400 Kristin@Zhivago.com

Top 10 Characteristics of An Effective Leader

[Updated October, 2012 by Kristin Zhivago]

Every business needs an effective leader. Highly effective leadership is rare. Here’s my checklist, which comes from helping hundreds of CEOs, entrepreneurs and managers become more effective leaders.

The Top 10 Characteristics of An Effective Leader

1) Is Truly Humble – Leads to Serve
2) Is Non-Judgmentally Observant
3) Faces and Solves Problems
4) Ruthlessly Improves
5) Is Fiscally Conservative
6) Invests in the Business
7) Communicates Regularly, Clearly, and Purposefully
8) Gives Clear Direction
9) Evolves Agressively
10) Has a Sense of Humor
(11) Bonus Characteristic: Is Customer-Centric

Here’s why the list contains what it contains:

1) Is Truly Humble – Leads to Serve

No one likes to work for a jerk or buy from a jerk. If you are obsessed with your own self-image, you will be your own worst enemy. Most CEOs and entrepreneurs are helpful people. For every Larry Ellison, there are millions, of nice-guy/gal business leaders whose good character makes people want to associate with them.

A real leader lives to help others.

2) Is Non-Judgmentally Observant

If you observe your own behavior non-judgmentally, but with the constant desire to improve, you will get much farther than if you berate yourself, or excuse or justify your shortcomings. You will also be a dispassionate listener. It will be more difficult for others to guess what you’re thinking, and they will be more likely to tell you more. Everyone who works for you should know that what you’re really interested in is the facts.

You will also objectively observe other aspects of their behavior and character – including how they treat those below them, how much they contribute to the solution (rather than being part of the problem), how much others respect them, how competitive or cooperative they are, how observant they are of others, how much they include others, and so on. Being a calm observer will help you see these behaviors more clearly.

3) Faces and Solves Problems

Once the good leader is satisfied that she has uncovered the truth, she then sets out to solve the problem. She doesn’t procrastinate or spend too much time gathering unnecessary additional data. She gets the right people involved right away, she tells them what she has observed, tells them what she’s decided to do so far, and then works with them to solve the problem.

Ineffective CEOs decide that it’s personal, and invest their energy in “taking offense.” They may simply refuse to acknowledge there’s a problem. Even if they do acknowledge it, they may decide to ignore it; push it off on to someone else to fix; or blame someone else for causing it, then fail to do anything about it. They may also pretend they are solving the problem when in fact they are doing nothing.

The best employees and partners will try to help this CEO do the right thing. If their efforts fail, they will start looking around for new opportunities. As soon as they have found one, they will leave.

4) Ruthlessly Improves

The best leaders are ruthless about improvement. They are constantly finding new ways to educate their customers, employees, and partners. They are always looking at their processes, policies, and systems, and asking themselves: “How could we make this more efficient? What don’t we need anymore? What do we need now?”

They don’t fall into the “we’ve always done it this way” trap, which causes far too many companies to struggle – and fail.

5) Is Fiscally Conservative

I’ve seen some spectacular company failures. They all had one thing in common: They overspent. They managed to get some outside funding – either from venture capital or over-inflated stock prices – and they spent like there was no tomorrow. They were right – ultimately, for these companies, there was no tomorrow.

A good leader will think twice and will keep asking himself, “Do we need this now? Is there a less-expensive way of doing this?”

6) Invests in the Business

Even in a terrible economy, a good leader will invest in the business. She will just choose her investments wisely. The goal is to invest where it will have the most impact on revenue growth.

I recently interviewed a number of salespeople for a client who sells a very complex software program. I ended up recommending that they increase education for their salespeople, so they can answer more of the customer’s technical questions during the early discussions. Doing this will shorten the sales cycle, which will definitely have a positive effect on revenue growth.

7) Communicates Regularly, Clearly, and Purposefully

Effective leaders communicate regularly, clearly, and purposefully. Because they have been humble and objective enough to get the real story, whatever they say rings true to those hearing it. The listeners are open to whatever comes next – a solution or a new directive. If a leader has obviously mis-read the signs, or has been misled, those listening will know it – and will not buy into his “solution.”

Communication is not just about talking and writing. It’s also about behavior and character. If you say one thing and behave differently, your character will come into question. For example, a CEO may repeatedly say that he cares about employees, but never fraternizes with cubicle dwellers.

Once people start to be suspicious of your character, they will no longer follow. They will hold back and question your motives and integrity.

8) Gives Clear Direction

The effective leader works out how a project should proceed, then presents the plan in a well-organized, logical fashion that is easy for his customers, employees, or partners to understand and act upon.

He doesn’t ramble on, verbally or in emails. He doesn’t “think outloud.” He doesn’t rant. He doesn’t berate anyone (especially in front of others), except in the very rare instance when it is entirely appropriate to do so.

Ranting is a data dump that satisfies the ego of the person ranting without benefiting those who must suffer through it – and then try to solve the problems anyway, as best they can. They will hesitate to come to that manager with new issues, because they won’t want to sit through another harangue.

9) Evolves aggressively

A good leader knows that the company’s products or services won’t be in demand forever. He doesn’t spend any time trying to imagine what the market will need next; guessing always invites disaster. Instead, he keeps his finger on the pulse of the customer’s world. The minute the customer feels a need and starts to make a shift, he’s thinking about how he can best meet that need.

He learns everything he can about it – from customers. His interviews will either convince him that it’s only a passing fad, or that it’s a real trend – and if it’s a trend, he starts working immediately to see how his company can help customers meet their needs in that area. He starts with his current product offerings. Can they be repositioned? Repackaged? Repriced? Redesigned?

He doesn’t set the whole company running off in a new direction abandoning all the good things that everyone is already doing, but he does start to allocate resources to start meeting the new need and generating new revenue.

The effective leader becomes a valued and trusted partner for his customers, opening the door for him to introduce new products and services to them. They’ll be more likely to buy from his company when something new is introduced, because the earlier products and services met their needs so well.

10) Has a Sense of Humor

Running a company is serious business, but if you can’t laugh once and a while, you’re not going to be an effective leader. A little wit goes a long way; no one considers a clown a leader.

Light-hearted, self-deprecating humor works best. You should be able to laugh about your weaknesses,  while constantly working to eliminate those weaknesses.


Bonus Characteristic: 

11) Is Customer-Centric

The most effective leaders don’t assume they know more than their customers; in my experience, these assumptions are always wrong. They ASK their customers what they’re thinking, using a method that will extract the maximum amount of actionable information with the least amount of effort. I describe such a method, in detail, in my book – tested and perfected over thousands of customer interviews for hundreds of companies.


  1. Hi Kristin –

    Hope you are well. I’m definitely going to bookmark and re-read this one.

    David Morse

  2. GREAT!!! You took the words right out of my mouth! You are also great at explaining them.
    I don’t agree with what Roger Gaelens said, though. A sense of humor is nice, but it’s not even close to a must have! No one would not like a leader because the leader isn’t funny. That would be judgmental and unfair. So please reconsider. Not trying to be mean or anything so no hard feelings.

    Alexandra from

  3. I must disagree, a good sense of humor is important. The leader is not trying to be funny just occasionally letting his or her subordinates know that he or she is human and real and approachable. A little self-deprecating humor lets people know that you don’t take yourself so serious that you think you are above everyone else.

  4. This is how I do it:
    Be completely honest with employees. If not, it give them a license to be dishonest.
    Serve as an example – be what you expect your employees to be.
    Never accept perks – ever. If you must, distribute them as evenly as you can to your employees.
    Even if you are CEO, in their minds, employees have the right to take what you take. If you take one pencil and 1,000 employees, good bye 1,000 pencils.
    Pat employees on the head when they do good. I still remember the times I was praised.
    Be quick to forgive employee mistakes, you make the biggest ones. Understand, if you do not; 1) you will lose the productivity of at least 10 other employees; 2) the loss will be equal to their self-respect and you do not know how big that is; and 3), you may lose a good employee.
    Try out employee ideas even if you do not think they will work. I’ve been surprised many many times. Those that worked more than paid back those that did not and… it increased productivity.
    Encourage employees to think and they will increase mental and physical effort without knowing or thinking about it.
    My greatest pleasure was to watch employees grow.
    Smile a lot and say thank you to everyone for everything.
    Determine before hand, what % of increased profit belongs to shareholder and to employees.
    See that they uniformly get 1) benefits and 2) raises for increased profits before they lose their dignity by having to ask for them.
    Look after your employees and profits will take care of themselves.
    If you want a union shop, hire a psychopath as your next CEO.
    Satisfy the good genes and soon – even bad employees will do good.
    Be a people person, you can hire technology and skills.
    Listen and encourage workers to think. Particularly if you have always worked at one profession or skill, you’re experiences will never match the varied experiences and training of 10 employees.
    Never forget the influence of the family on your employees.
    Give reasonable time off with pay for employee emergences and you will be paid back – from all employees at least 10 fold.
    Do not pass on employee problems to a personnel department. We know that members of tribes followed leaders for at least a million years so in the minds of employees, when you take away the leader – there are no followers.

  5. Very wise, Bob. Thanks for passing it along to all of us.

  6. Kristin,

    Thanks for sharing your insight with me. This is a great post, very concise, and easy to read.

    Again thanks for sharing,
    Danny Morrell

  7. Thanks. Appreciate your appreciation. Writers/teachers thrive on constructive feedback. Best of luck to you in all your business endeavors.


  8. Thank you so much… A big help for me… :))

  9. I love that you led with the concept of servant leadership. Great leaders first ask what they can do for you before asking anything from their teams. Too many leaders either don’t know or don’t understand how important this aspect of leadership is. Thanks for sharing!

  10. Glad you liked it, Coach4Growth.com. I went to your site…I suggest that you show the real coaches – I looked in your About section and didn’t find any bios for real coaches. That’s the first place someone would look to find out who you are and what you can do for them.


  11. In th landmark leadership book: “The Leadership Challenge”, Kouzes and Posner asked over 75,000 employees from six continents (most from the U.S.) a riveting question. “What seven characteristics do you most look for and admire in a leader, someone whose direction you would willingly follow.”
    The results over three surveys and a fifteen year span haven’t changed signifcantly. Here they are listed in rank order:

    1. Honest
    2. Forward looking
    6.Fair minded
    7.Broad minded
    10. Dependable

    It is noteworthy that the top four characteristics shown above, were mentioned by 65% or more of the respondents.

    I believe this is an excellent list for leaders to guage themselves against.
    Although it does not explicitly include humility, I believe humility is a common thread woven throughout the above list.
    Armand Rapetti

  12. Thanks, Armand. Good list. I am thinking of writing another article about leadership soon, since I have had some new thoughts about it. Turns out there is really only one trait that matters. Get that one trait right and everything else falls into place.


  13. A leader can have all the qualities listed but if he or she does not keep an open mind – the ability to know that new knowledge did not stop being learned (through science, experience, etc.) when their education was completed — and that some of what they thought they knew was wrong (or woefully incomplete) — their knowledge will eventually be out of date and surpassed by others who learned new information.

    An open mind, not holding on to something we think we know because we want to be “right” or can’t stand the idea that we may have made a mistake because we did not know some things then that we could know now — the ability to keep an open mind is very important.

    An individual can hold on to “being right” and close out new knowledge. Why not, instead celebrate that we now know more than we used to and let it go – knowing that any decision made on incomplete information was the best one you could make at the time. Cling to “I did the best I could at the time” instead of “what I did has to have been the right (the best ever) answer/solution”

    There are many areas that are contributing new knowledge and awareness that could greatly benefit businesses and they will provide tremendous competitive advantages to the early adopters.

    I often see business people whose minds are so closed to new information they will not even learn about it. Ultimately, they will miss out on something that would be very beneficial to them and their organization.

  14. Thanks, Jeanine.

    Good point. That one catches all of us!




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