Proper leadership is necessary for the organization's survival and development.  Both day-to-day functioning and development of a small organization, in particular, depend on the leadership quality. Effective leadership brings together diverse people and helps them find common purpose and work towards to achieve purposeful common goals. Effective Leadership inspires and empowers people to realize their fullest potential and harness their potentials to achieve common goal.

Leaders sets the ethical standards within the firms that build organizational culture, provide and implement innovations and support team members.

• Leadership is defined by Griffin R.W. (2004) as a process of "shaping the goals of the group or organization, motivating behaviors conducive to achieving these goals and easier defining the culture of the group or organization." Leadership is also understood as a set of attributes of a leader.

Thus, Leadership first of all mean setting the direction of changes, creating strategies and inspire people to follow that direction.

• This inspiration is also understood as influencing thanks to motivational techniques to complete them. These include team building methods and active instillation of understanding of vision and strategy.

• Leader or Manager? Understanding the difference between leader and manager.

It is important for managers in craft enterprises to be more leaders creating a new direction in the organization's development and inspiring their teams rather than managers achieving specific goals. Only in this way will it be possible to develop the organization and the human potential of this organization.

• Leaders are people who do the right things. Leaders are people oriented. Leadership involves creating a compelling vision of the future, communicating that vision, and helping people understand and commit to it.

• Managers are people who do things right. Managers are more task oriented. Managers are responsible for ensuring that the vision is implemented efficiently and successfully

• As Bass showed, there are six leaders' characteristics that distinguish them from non-leaders. Among them were: drive, desire to lead, honesty and integrity, self-confidence, cognitive ability) and knowledge of the business [Bass, Bass, 2008]

• Emotional Intelligence (EI) – is the ability to recognize and understand emotions in yourself and others and then use this awareness to manage your behavior and relationships. It plays important role in effective leadership.