How to Become a Good Leader: 5 Levels of Leadership Explained

By Indeed Editorial Team

Updated September 12, 2022

Published September 7, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Good leaders can help develop more productive, cohesive and trusting organizations with motivated and skilled employees. Leadership skills can take years to develop, but theories like John Maxwell's five levels of leadership provide helpful guides for developing these skills quickly and effectively. Understanding Maxwell's leadership theory can help you become a better leader and understand why it's important. In this article, we outline the five levels and explain their importance in modern businesses.

What are the 5 levels of leadership?

Each of the five levels of leadership builds on the previous one, which allows you to organize and understand your leadership growth. The five levels are:

1. Position

When people begin a managerial job, they have a position of authority, so they need to demonstrate certain qualities to be strong leaders. Some managers and supervisors stay at the Position level for the entirety of their careers. They rely on company rules, policies, regulations and organization charts to influence their employees.

You can master this level of leadership by learning management skills, being approachable and making an effort to collaborate with your employees. A more open, accepting attitude can increase your team's motivation to produce better work.

Related: What Are Factors of Motivation? (With Examples and Theories)

2. Permission

When you ask your employees to do a task, they might do their best to accomplish the task. They may try to help you because they feel appreciated, included in decisions, cared for, trusted and valued. To get to this level of leadership, remember to:

  • Consider how your decisions might affect all the people you work with daily

  • Treat all of your employees equally

  • Always support your team members

  • Make sure that all of your employees can work well with other teams

  • Always hold people accountable for mistakes

  • Relate to all the people on your team well

  • Meet or exceed your goals

  • Get positive reviews from your team members, managers and clients

Make an effort to learn more about your employees, even those on other teams and those who tend to keep to themselves. This can help establish your integrity and make coworkers or employees more willing to do their best.

Related: How to Improve the Employee vs. Employer Relationship

3. Production

Production leaders can produce results and create a significant impact on their organizations. They can give useful advice, help to resolve conflicts and motivate people. Leaders at this level can improve their skills by making their communication style more consistent and improving their people skills. They typically do the following:

  • Think about the best ways to make the connections needed for employees to feel engaged and empowered

  • Listen and give directions

  • Welcome employees' input on decisions

  • Adapt to new technologies or changes in the industry

  • Make sure that all employees are well-trained

  • Have people admire them for their personality and charisma as well as their technical skills

Production leaders can create a high-productivity team, department or company. They can continue to improve their skills by continuing their training and education in leadership and communication skills.

4. People development

Leaders help their employees develop their own skills to contribute to their career goals. People Development leaders invest their energy, time and money in increasing the leadership skills of others. Individuals who move from Production to People Development successfully are:

  • Consistent, honest, inclusive and easy to talk to

  • Hard workers who lead by example

  • Skilled at communicating expectations for employees' roles clearly

  • Fair decision-makers

  • Mentors to many employees

  • Willing to recommend employees for promotions

  • Eager to help former employees develop their careers

  • Ready to talk to the people on their team about any issue

  • Promoted for their excellent management skills

Consider how teams across your company work together and focus on developing key skills within specific individuals to gain respect and create a more skilled, motivated workforce. Focusing on the people that work for you can help increase trust and create positive professional relationships.

Related: A Guide to Being an Inclusive Leader (With Definition)

5. Pinnacle

Along with mentoring employees, Pinnacle leaders have become skilled enough to help others reach the People Development stage and become outstanding leaders themselves. They improve the reputations of their organizations, encouraging the most talented, innovative people to work there. Pinnacle leaders:

  • Increase productivity and make almost any team or department successful

  • Create environments that help everyone and contribute to their successes

  • Have influence outside of their organizations or the industries they work in

  • Treat everyone fairly and with respect

  • Show integrity, keep their promises and behave in an honest, ethical way

  • Allow the people they supervise to make independent decisions whenever possible

  • Lead people who produce innovative products and get excellent business results

Pinnacle leaders often speak or conduct workshops about leadership. They also have employees who sincerely believe that they always prioritize their interests. Becoming a Pinnacle leader means setting a good example of how you expect other leaders to behave.

Related: What Does It Mean to Be a Leader? (With Qualities and Tips)

What is the importance of good leadership in business?

Good leadership in business can be crucial to keeping your business productive, motivating employees and creating a positive company culture. Effective leaders help develop the company's workforce and provide guidance for tough challenges or career goals. Here are some important reasons why good leadership is crucial to business:

  • Professional development: Leaders can assist employees in developing their professional skills through motivation and guidance. Developing employees' skills can help reduce employee turnover, increase productivity and inspire employee motivation about their positions.

  • Influence: Good leaders who continually develop their leadership skills can successfully increase their influence within the business and the industry. This can help drive innovation and provide more opportunities for leaders to serve as mentors.

  • Business values and culture: Effective leaders help support the business's core values and create a positive company culture. This can help your business attract more talent and improve its operations and employee morale with a positive and supportive environment.

  • Business strategy: Good leaders in a business can help develop the company's business strategy and provide a new direction for the company to increase its profits, innovate the industry and earn the trust of the customers.

  • Business identity: Through positive culture and value support, leaders help establish a positive business identity that employees can rally behind. A business identity also helps the company stand out from competitors and earn higher profits.

Related: The Importance of Leadership (With Essential Skills)

Tips for maintaining the five levels of leadership

Good leadership requires consistent development through training, practice and education. Keeping your skills relevant and learning new leadership skills that align with the five levels of leadership can help ensure you continually lead your organization successfully. Here are some tips for maintaining your leadership skills and aligning with the five levels of leadership:

Attend classes or seminars

Leadership classes, seminars or presentations are excellent resources for learning from other prominent leaders and developing new skills. John Maxwell, the developer of the five levels system, hosts seminars and training sessions that can supplement your knowledge of the system. You can continuously improve your understanding of the system while including modern leadership styles and techniques in practice. Leaders who continuously develop their skills and knowledge can become highly influential within their companies or industry.

Maintain frequent communication with employees

An important aspect of maintaining good leadership is frequent communication with your employees. Good leaders learn to listen to employees, trust their feedback and provide developmental feedback of their own to create a continuous cycle of development. Leaders also serve as a point of contact between employees and higher executives in the company. They help align employee needs and goals with that of the company. Consider hosting monthly or weekly meetings or conference calls to converse with employees and maintain lines of communication.

Related: A Guide to Promoting Effective Workplace Communications

Practice discipline and self-awareness

Discipline is a core component of good leadership because it helps you maintain your leadership values and focus on continual development. Self-awareness supports discipline because it helps you remain aware of your thoughts, actions and words, which should reinforce your values. Maintaining discipline means practicing it daily, working with others to identify disciplinary challenges and performing self-evaluations. A monthly self-evaluation can help you determine where you're succeeding in discipline and what areas you can dedicate more time to. It can also be helpful to ask your coworkers or employees what they think your strengths are.

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