What makes a good business leader? Is it vision and great ideas? What about good organizational skills and timekeeping? How about being a great motivator? All those things are very important, but one of the things that set good business leaders apart is an understanding of business psychology.

This is something that a lot of people overlook because they don’t see what psychology has to do with business. However, the reality is that understanding what makes people tick is central to doing business well. Here are some of the reasons that business psychology is so important for leaders.

Manage People According to Personality Type

Psychology can teach you a lot about personality types. Different people work in different ways and have their preferred management styles. If you try to micromanage somebody that likes to work independently, you will disrupt their productivity. On the other hand, if you don’t give any direction to somebody that needs clear instruction, they will be completely lost. There are several different personality types that most people fit into. Sometimes people are a combination of the two. Business psychology teaches how to recognize these different personality styles and manage people accordingly. By doing this, you can get so much more out of your team.

Push Organizational Change

Organizational psychology is a specific branch of psychology that helps you push organizational change. It teaches you to diagnose and recognize issues in a business and implement changes that encourage more productivity throughout. You can even do a Doctorate in Organizational Psychology to learn these skills. Leaders that can successfully implement organizational change can make their companies dynamic and adaptable. This is crucial for the long-term survival of a business, and psychology can help you achieve this.

Improve Negotiation Skills

Negotiating is an important part of business. Whether you are brokering a deal with a supplier or trying to win a big client, being able to hold your own in a negotiation and get a favorable outcome will give you a huge advantage. Business psychology can help you gain more insight into how people are thinking, and pick up on things that will help you convince them of your way of thinking. When you learn to push the right buttons, you can unlock a lot of doors in business.

Interview Potential Hires More Effectively

The same skills that you use for negotiating can be used for interviewing potential hires. Making a poor hiring choice costs a lot of money because you have to hire and train somebody new. There is also a drop in productivity caused by an ineffective employee. However, if you have a clearer understanding of business psychology, you will find it easier to assess people during an interview and work out whether they are a good fit for the business. 

If you think that psychology has nothing to do with business, you are sorely mistaken. These are just some of the ways that it can help you get ahead.