Author: Jiya Mahajan // Editors: Emily Barrett & Erin Pallott

When you think of a great leader, what comes to your mind? Maybe a CEO, a football coach giving a pep talk, or even a teacher who inspired you to chase your dreams. But what really makes someone a good leader? Leadership is often seen as something that comes naturally to certain people; maybe they have confidence, charisma, they’re extroverts, or they have the ability to make decisions under pressure. What if I told you great leadership has less to do with personality and more to do with understanding people? This is where psychology comes in! Research in organisational psychology suggests the best leaders are not always authoritative or outgoing; they’re the ones who understand people.

Reflecting on my own experiences, I’ve worked under a diverse range of leaders—some who made me feel confident, valued, and empowered, and some who made me nervous and left me second-guessing myself. This contrast made me curious: Why did different leaders have such a strong emotional impact on me? What was it about their leadership styles that shaped my experience? More importantly, how could I use this understanding to become a better leader myself? This curiosity has driven me throughout my leadership journey.

I’ve been in quite a few leadership roles myself across different organisations, leading teams on consulting projects, co-founding initiatives, and running multiple student societies in my undergrad and high school. All these experiences have made me realise that leadership isn’t just about making decisions, it’s about how you connect with people, how you make them feel and how you create an environment where they can thrive. But leadership is also about making better decisions, and this is where psychology provides key insights that go beyond management training.

I want to talk about the psychology behind leadership and explore how emotional intelligence, cognitive biases, and motivation play a role in making better decisions and leading effectively. Even though I’m an economics graduate and now pursuing a master’s course in management, I’ve always chosen psychology subjects as my electives, organisational psychology being my favourite. It has explained so much about why people follow certain leaders, how teams work together and how I can refine my own leadership approach using psychology as a tool for growth and impact.

This blog post will explore three key areas (Emotional intelligence, cognitive biases, and the psychology of influence and motivation) where psychology can help you become a better leader and decision-maker. Whether you’re managing a team, running a business or just trying to make better choices in everyday life, organisational psychology can help you lead more effectively.

Emotional intelligence is the secret to strong leadership

Have you ever worked under someone who just didn’t get people? Maybe they were really skilled technically, but they lacked empathy, or they were so focused on results that they never acknowledged their team’s efforts. Well, I’ve had that experience, too.

During one of my internships at a huge firm back in India, I worked under a senior manager who was, quite frankly, terrifying. They rarely ever acknowledged my hard work, and their directness somehow made me feel like they saw me as incompetent. I was constantly nervous around them, wondering if they thought I wasn’t good enough. Honestly, I thought they hated me. I now see that their low EQ (Emotional intelligence) was probably the issue. He didn’t understand how his behaviour affected me or others. His kind of leadership, whether it was intentional or not, created a culture of fear rather than motivation. I was constantly worrying about making mistakes, thinking he would just fire me. Low EQ doesn’t just mean poor interpersonal skills, it directly impacts a team’s performance, creativity, and even decision-making efficiency.

Now, contrast that with my current part-time job here in the UK, where my manager actually recognises my work and appreciates me when I do a good job, making sure I know I’m valued there and so are my inputs. That’s what emotional intelligence looks like in leadership. It’s about self-awareness, empathy, and social skills, all of which help leaders connect with their teams and create a supportive environment. And research backs this up. Leaders with high EQ tend to have more engaged and motivated teams. When people feel heard and appreciated, they perform better. Additionally, emotionally intelligent leaders foster psychological safety, where employees feel comfortable speaking up without fear of ridicule or punishment. This results in better decision-making and workplace morale at all levels.

The lesson? Leadership is not about having all the answers; it is about making people feel seen, supported, and motivated to do their best work, truly utilising their potential. Many of the world’s best-rated leaders like Oprah Winfrey or Barack Obama are known for their high EQ.

How to improve your EQ? A simple ‘thank you’ or recognition of someone’s efforts can go a long way and build stronger relationships. Emphasis on proactive listening and not just waiting for your turn to speak can make a huge difference.

Cognitive Bias: The Invisible Risk in Decision-Making

We all like to think we make logical and well-reasoned decisions, but the truth is our brains love shortcuts. These mental shortcuts are cognitive biases which help us make quick decisions, but they also lead us off track. In leadership especially, falling into these traps can be costly. Understanding how cognitive biases distort decision-making can help leaders mitigate risk and improve strategic planning, which in turn enhances better team decisions.

One of the biases I’ve seen in management is overconfidence bias, which makes us believe we’re better at making decisions than we actually are. It is the reason some leaders hurry through market research, don’t pay enough attention to the data available or fail to listen to their teams or target audience. A classic example of this is Coca-Cola’s most memorable marketing blunder over the launch of “New Coke”. The failed 1985 rebranding of “New Coke” is a classic case of overconfidence bias, where leaders ignored consumer attachment to the original formula despite extensive taste tests, ultimately leading to a massive public backlash and the product’s swift removal. And let’s not forget groupthink, where teams agree too quickly just to avoid conflict, often leading to a bad decision that could have been avoided if someone had spoken up. Social psychology research shows that groupthink often emerges in high-stakes decision-making environments where leaders discourage dissent, resulting in flawed consensus.  

One of the biggest biases I’ve seen in leadership is confirmation bias, where we only look for information that supports what we already believe. I once worked on an event where our communication head was convinced a particular strategy would work, despite clear evidence from the past suggesting otherwise. Because they were so set on their view, they ignored dissenting opinions and, ultimately, the event underperformed.

So how can we overcome these biases? It starts with actively seeking different perspectives, challenging our assumptions, and creating a culture where questioning decisions is encouraged rather than punished or looked down upon. In other words, great leaders don’t just trust their gut, they also trust their teams and the data in front of them.

Psychology of motivation and why people follow great leaders

Self-determination theory explains that people are most motivated when they feel autonomy, meaning they have control over their work, competence, meaning they are good at what they do; and relatedness, meaning a sense of belonging. I saw this play out firsthand with my team of new consultants working on a project for the first time. In the beginning, they were hesitant, unsure and afraid of making mistakes. Instead of micromanaging, I focused on giving them ownership over tasks, providing guidance without taking over, and encouraging them to speak up, brainstorm and collaborate with everyone. No ideas were bad ideas. By the end of the project, they were far more engaged. Why? It’s the same reason why some teams thrive while others struggle. People don’t always just work for money, they also work for meaning, growth and connections. Great leaders understand this and create an environment that fuels these intrinsic motivators rather than relying on external rewards fully.

According to Cialdini’s Principles of Persuasion, people are likely to be influenced when they feel they are receiving something in return, when they see others already doing it, and when the leader stays consistent with their values. This is why people emphasise “Lead by example” so much. If you want a culture of respect, you need to show it first. 

What we can learn from world-renowned leaders?

Toto Wolff, the team principal of my favourite Mercedes-AMG Petronas F1, leads a team of 1800+ in one of the most high-pressure environments in sports. He doesn’t only make tech decisions but manages a team under intense high-stakes situations, all of whom need to function at their absolute best. He stands out with his ability to balance authority with trust and gives his engineers and strategists the freedom to make decisions but also ensures accountability. His leadership style reflects high-quality Leader Member Exchange (LMX), building strong relationships with his team while still maintaining high standards.

Then there’s Jacinda Ardern, former Prime Minister of New Zealand, whose leadership during crises has been widely recognised and praised. Her approach is rooted in authentic leadership, focusing on transparency, empathy, and moral integrity. Instead of just making top-down decisions, she communicates openly, listens to people, and leads with a level of emotional intelligence that can inspire trust among people.

Leadership is a science, not just an art

At the end of the day, great leadership isn’t about control, it’s about influence, trust, and the ability to bring out the best in others. Great leaders do not only rely on their instincts but understand human behaviour. Psychology gives us the tools to do just that.

So next time you’re making a tough call, handling a disagreement or trying to get a team on board, pause and ask:

Am I reacting emotionally or thinking this through rationally?

Am I considering all perspectives or just the ones that agree with me?

Am I leading in a way that makes people feel motivated and valued?

The best leaders make people want to follow them. 

About the author
I’m Jiya Mahajan, an MSc Management student at Alliance Manchester Business School with a background in Economics Honours. My passion lies in Organisational Psychology, understanding how people think, work, and lead. Connect with me on LinkedIn to continue the conversation!