Business Solutions Center
Business Columns

Home Resources Business Columns Financial - Dave Ramsey Guiding Principles of Effective Leadership

Guiding Principles of Effective Leadership

Entrepreneurship - Dave Ramsey
America's trusted voice on money and business, Dave Ramsey is a personal money management expert and extremely popular national radio personality. His three New York Times best-selling books - Financial Peace, More Than Enough and The Total Money Makeover - have sold more than 6 million copies combined. His latest book is EntreLeadership: 20 Years of Practical Business Wisdom from the Trenches.

Guiding Principles of Effective Leadership

Guiding Principles of Effective Leadership

For many business owners, building a group of creative and passionate team members seems like a distant dream they’ll never be able to achieve. But it doesn’t have to be that way. Inspiring a team to follow you is not about money or control—it’s about leadership.

With that in mind, here are 20 guiding principles that will help you cultivate and improve your leadership ability.

Love your team

Your team members are not robots, and they are not units of production. They are people who all have hopes, dreams, fears, and struggles. Each one of them deserves to be treated with respect, dignity and a caring heart.

Love your team well. Treat them like family, and they will act like family.

Treat people the way you want to be treated

If you want a team that’s loyal, creative, and willing to follow you to the ends of the earth, adhere to the golden rule: "Do to others as you would have them do to you" (Luke 6:31 NIV).

Simply put yourself in their shoes. When you would expect to be praised, give praise. If there’s a problem you would want help with, lend a hand. If you would expect a pay raise, give it!

Seldom use your power

A boss has an iron grip on their team, expecting every employee to immediately jump at their command. They have more rules than there are stars in the sky, and they spend all their time ensuring their mandates are followed.

A good leader realizes the only power they can use is persuasion. If you want employees, boss them around. If you want team members, explain why you do what you do. Don’t try to lead with threats and fear.

Surround yourself with rock stars

It doesn’t matter if you are trying to fill a minimum-wage job or selecting a new leader for your company, you should always hold out for the perfect person for the role. Having the right people in the right positions allows your organization to do its best work. Take plenty of time, set your standards high, and keep crazy out of the building.

At my company, each prospective team member goes through multiple interviews, including one with his or her spouse. They are also required to create a personal budget, and take a personality test to make sure they fit with the job.

Cast your vision

Over the years, I’ve learned if you play for something bigger than yourself, you play much harder and smarter. The same holds true for my team. They work harder because there’s a sense of calling.

How do you let your team know they are doing something important? Repeatedly tell them what they’re working for and why. Share your vision early and often.

Give praise

Make a habit of catching people doing something right and letting them know about it. A sincere compliment is very unusual in most of today’s workplaces, so it will immediately set you apart.

A simple nod or smile showing your approval will do. Or, take a few minutes to write a personal note. Maybe tell them in person what a great job they’re doing, or how about recognizing them in front of their peers? These simple gestures can create magic in a matter of moments.

Look in the mirror

When I first started my company, I wouldn’t have won any awards for my leadership skills. It wasn’t until later I realized one thing holding me back was staring at me in the mirror every day—me! Your organization can’t grow beyond your leadership qualities.

Luckily, there’s a fix. You can decide who you want to be, and then get about the business of becoming that person.


What’s the best way to kill morale and boost discontentment and anger? Failure to communicate. Always let your team know what’s going on, both good and bad.

Intentionally creating a culture of communication will enable you to quickly see the rewards. Don’t be a mushroom communicator by leaving your people in the dark and feeding them manure. That stinks!

Lead by example

Do you want people to change their actions? Then you need to guide and inspire them through the way you carry yourself.

Set the example by what you say, do, and how you react toward others. Your team will follow your lead.

Be genuine in your interactions with others

Authentic people attract authentic people. Don’t be afraid to be a genuine person, one who is transparent about their strengths and weaknesses.

Be confident yet humble

Is that an oxymoron? Nope. It’s possible to be confident and humble at the same time. Be sure of yourself and your abilities, without acting like the world revolves around you.

Character and integrity

One of the most basic building blocks of how to be a good leader is always possessing strong character and integrity. It should be the core of who you are.

Act professionally

This might go without saying when it comes to leadership qualities, but remember to conduct yourself in a professional manner. It’s awfully tough to expect respect from others when you carry yourself poorly.

Be trustworthy and learn to trust others

Leaders should have the full trust of their team. But in order to gain that trust, you must conduct yourself in a trustworthy way. You want your team to know you have their backs and will support them no matter what.

Follow through on your promises and mean what you say. Be someone they can count on. If you feel like you can’t trust someone, don’t hire them to be on your team. Only hire team members you know will get the work done with honesty and integrity.

Empower others

Great leaders lift others up. They equip them to take on the task at hand, and trust they can rise to the occasion. Contrary to popular belief, being a good leader does not include micromanagement.


In a world where people change jobs in the blink of an eye, loyalty has become a lost attribute. Many leaders expect complete loyalty from those they work with, but forget it’s a two-way street.

The character of any good leader should always include loyalty. You need to be loyal to your team members and your mission.


It’s true, being a leader often comes with carrying the burden making the tough decisions. Being the one who makes those decisions requires you to tap in to a certain level of bravery others don’t have to during their 9 to 5. You must be decisive, and have the courage to take risks when they are needed.

Generate results

Leaders are more than capable of getting the job done. You can count on a great leader to follow through and execute the plan. They demonstrate strong leadership qualities by always working hard and not throwing in the towel when obstacles arise.

Accept change

Any good leader knows change will happen within an organization. The ebb and flow of a company over time is inevitable. But a great leader knows how to adjust to changes, when to accept changes, and the right way to manage their own reactions change.

Be a servant leader

Being a servant leader doesn’t mean you wait on other people hand and foot. It means you serve your team and enable them to become great at what they do. It’s all about going above and beyond to simply treat people like they matter.

The key to becoming a great leader is serving your team and everyone around you by putting them first. If you do, you’ll be paid back in full with loyalty, hard work, and extraordinary results!

Read other business articles by Dave

Dave Ramsey is America's trusted voice on money and business. He has authored five New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover, EntreLeadership and Smart Money Smart Kids. His newest best-seller, Smart Money Smart Kids, was written with his daughter Rachel Cruze, and recently debuted at #1. The Dave Ramsey Show is heard by more than 8 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at

The information included on this website is designed for informational purposes only. It is not legal, tax, financial, or any other sort of advice; nor is it a substitute for such advice. The information on this site may not apply to your specific situation. We have tried to make sure the information is accurate, but it could be outdated or even inaccurate, in parts. It is the reader's responsibility to comply with any applicable local, state, or federal regulations, and to make their own decisions about how to operate their business. Nationwide Mutual Insurance Company, its affiliates, and their employees make no warranties about the information, no guarantee of results, and assume no liability in connection with the information provided.