The Business Class

How to inspire your team on a daily basis

Jamie Grill | Blend Images | Getty Images

The best managers are always those who have the ability to lead their team by personal example. It is one of the hardest skills to master — but get it right and the results will be well worth all the effort.

When you look at a team or a group from the outside, it's easy to spot the difference between an inspirational leader and one who has to rely on using strong-arm tactics.

If a manager is constantly having to check on people's work and chase his or her staff, then it is a sure sign that something is going wrong.

A good manager will have a fully committed group of people behind him or her, who understand the importance of working together as a unit towards a shared goal and aims.

(Read more: Five ways to avoid losing out on that dream job)

To get to that position, the very best managers need to be able to inspire those around them and the only way to do that is to lead to by example.

In any walk of life, and in any sector, one of the first things a good manager should do is to demonstrate that they fully understand the skills and expertise needed to carry out the work. That is not the same as the manager rolling up their sleeves and doing the task themselves, it's simply about fully understanding the work and how people should go about it.

Secondly, the best leaders will expect commitment and hard work from their staff, but will also demonstrate the same level of dedication. If you are expecting people to go that extra mile for you then you have to be with them every step of way.

Good communication should also be at the heart of everything a good manager does. The very best leaders are the ones who can describe clearly to their team members exactly what is expected from them.

Communication is always a two-way process, which means that as well as expressing yourself, if you want to win over staff then you have to be able to listen to people and take on board their views and opinions.

For a team to function properly everyone needs to know they will receive the same kind of treatment. There should always be a level playing field, and if you have favorites then you will be asking for trouble and cannot expect any kind of loyalty in return.

Finally and perhaps most importantly of all, one of the key qualities when it comes to leadership is the ability to be decisive under pressure. Leadership is all about making decisions and sticking to those decisions. When a crisis comes along, one of the worst things you can do is do nothing at all.

Not everyone will make the right decision every time, but appearing indecisive at critical moments can fatally undermine your position as a leader.

(Read more: Ten brilliant British entrepreneurs under 30)

Inspiration is not all about making great speeches and being a tough taskmaster. It is more about leading from the front and showing your true mettle when it matters the most.

James Caan is one of the U.K.'s most successful entrepreneurs, as well as the guest presenter of CNBC's "The Business Class".