Why Active Listening Is a Critical Skill for Founders and Entrepreneurs How you listen to your employees and associates has a direct impact on your success.

Despite what you might have heard in professional circles, money does not make the world go "round. What does make a difference, both in and out of the office, is good communication. It's this key component that determines your strength and success in business. And what really makes your communication insanely effective is active listening.

What is active listening?

Active listening basically means that, when you try to communicate, you stop trying to multitask. You focus on what the other person says, rather than formulating what you're going to say and impatiently waiting until they're done to respond. Your main goal is to pay attention, read between the lines and ensure that you really understand what the other person has told you. It's only when you have a grasp of the shared information that you can then formulate an appropriate answer and do something. So in this sense, active listening is a great example of a strategy that incorporates John Boyd's famous OODA loop for decision-making, wherein you Observe, Orient, Decide and then Act.

Listening to the words someone else says to you is only one part of active listening. You also have to pay attention to elements like non-verbal cues (e.g., facial expressions, posture). Those cues tell you an enormous amount about what someone really feels, thinks or needs, and so they help you get a better sense of the big picture and come up with a more thoughtful, rational answer.

Asking questions is also an essential part of active listening. It shows your conversation partner that you are interested in what they have to say and actually want the conversation to keep going. It also offers a way for you to get clarification or access details.

If both people who are communicating do active listening properly, then it's much easier to achieve their meaning. But in normal conversation, you'll constantly flow between the listener and speaker roles. And it goes both ways in that when you are the speaker, you must take ownership of your communication and find another way to get your point across if your active listener doesn't understand.

Related: 6 Strategies for Being a Better Listener

Why is active listening so important for leaders?

No matter your industry or company mission, as a leader, everything you do ultimately relies on the interpersonal relationships you form with your team, stakeholders, customers and others. Without active listening, these relationships are much harder to develop, because you might not understand the problems at hand or be able to acknowledge them in a positive, reassuring way. Lack of understanding also translates to difficulty digging down into an issue and cooperatively brainstorming for and developing innovative solutions. All of these things can make others question whether you're really qualified to be at the top and, in the worst-case scenario, lead to problems like insubordination, low morale, poor productivity and atrocious retention rates. In the end, this slashes your ability to compete and keep the doors of your company open.

Conversely, good active listening produces informed, willing people who know what to do and why they're doing it. They can work together harmoniously for common goals and move your company in the direction you want it to go, all while feeling more respected, included and valuable. High productivity is thus a surefire sign that good active listening is happening with your team.

Related: This Important Leadership Skill Isn't Hard to Master, But Most Don't Do It

Balancing professionalism and fun

Active listening clearly is serious business, as it can have such a dramatic influence on the results you get in your office. But that doesn't mean you can't have some fun as you open your ears. It's okay to smile, tell the occasional disarming joke or anecdote and be yourself. The key is simply to keep everything relevant and avoid dipping into silliness. With the right balance of fun and professionalism, you can create a relaxed yet intentional atmosphere where people feel safe enough to share concerns, get creative and lean on each other according to their own personalities and skills. This is what many leaders might consider the holy grail of contemporary office culture, inviting real diversity, inclusion and support at all levels.

Genuine interest makes active listening easy

Active listening is just like any other skill in that it takes practice to get it right. Strategies like finding a distraction-free area for your conversation, jotting down a note or two and making good eye contact can all help you stay present in the moment and take in the speaker's information better.

But perhaps the biggest tip for good active listening is simply trying to be genuinely interested in what the other person is saying. This can involve personal intrigue about the topic. But because everyone is different, and because most of us will likely find certain business subjects like expense reports a little dull, interest can also come from basic respect of the other person's value as a human being and contributor. The more genuinely interested you are, and the more you connect to the speaker's larger purpose, the less you have to "fake it," and the more naturally you can pay attention and analyze their information properly.

Communication is an integral part of everything we do — at work and beyond. And to successfully communicate, we must actively listen. As a leader, it makes the difference between success and failure, which is why practicing active listening and honing it until it's second nature is so important. Active listening isn't just a vital tool in a leader's toolbox — it's a vital tool for anyone! And if you find yourself actively listening and encouraging your employees to do the same, you'll soon find work operations from end to end progressing more smoothly than they ever have before.