Being a great leader takes more than smarts, hard work, and determination. According to management consultant Julia Tang Peters, all great leaders encounter certain decision points throughout their careers. The choices they make at those moments will shape the rest of their careers, she says, and this is as true for those who climb the career ladder at large companies as it is for those who go out on their own as entrepreneurs. "Everyone should look at it as a marathon, not a sprint," says Peters, who explores these critical moments in her new book, Pivot Points: Five Decisions Every Successful Leader Must Make. "So many people in the digital economy hit a home run early with a new company. They want to max out that opportunity, so they get some investors, and they grow quickly. Then, five or six years into it, the investors say, 'Thank you very much; we now need a real leader to get this to the next level.'" The reason this happens often, she says, is that "Leading is a hard thing to do. You have to have the experience to grow." Understanding the five pivot points and making the right decisions when you reach them are what create effective leaders.

1. Launch

The first decision point often comes early in a leader's career--but not always. It's the moment you make a commitment to gain mastery of a skill you need. "Typically, when we start our careers, we all have to face this decision, 'What do I really want to be best at?'" Peters says. "It's not necessarily your first or second job, but it's hopefully a decision all young people starting out reflect on." Some people have later launch points. "You've tried out two or three jobs, and none of them lit your fire. Or perhaps you studied accounting, but now you're in your 30s and don't want to spend the next 30 years as an accountant. That is your first launch and hopefully, having learned about yourself, the next time you've made a more thoughtful decision, and that becomes your real launching point."

2. Turning Point

The turning point comes when you decide to embrace a major opportunity or a major problem. "Not, let's see about this opportunity, but really committing to it," Peters says. Why is commitment at this moment so important? Because, inevitably, you'll encounter roadblocks, especially as an entrepreneur, she says. "It is a tougher challenge. There are obstacles and fewer resources. You feel the setbacks more. That's why it's important to make the emotional commitment of being all in. 'Comes a setback, I'm not giving up. I'm going to do whatever it takes to get through this.'" Just as important, if you really commit, other people will see that in you. "People respect that, and if your energy is out there in a committed way to do something specific that's important to you, it's very compelling," Peters says. "People pick up on it and want to be around that energy and drive. It builds the platform for establishing your leadership in your field."

3. Tipping Point

The tipping point occurs when you encounter a fundamental barrier and decide to break through it by taking a significant risk. "It can be an internal barrier; for instance, the fact that you've never done something before and you have to get through it," Peters says. "Or it may be an environmental barrier, such as a significant competitive threat to your business, so that to stay competitive, you have to do something really bold or head in a completely new direction. You're saying, 'Yes, I can get past this, and by breaking through this barrier, I will take my leadership to the next level.'" One business owner Peters interviewed reached his tipping point during the economic downturn. He responded by building out his management team, hiring great executives when they needed jobs. It was a big risk with a big payoff: Once the economy recovered, his business more than doubled.

4. Recommitment

"Twenty or twenty-five years in, everyone faces this decision," Peters says. You've had some accomplishments and successes. Things have gone well for a long time, but you don't bring quite the same passion to the work that you used to. "When the decision is to recommit to the same company or job, it's really based on recommitting to a more purposeful goal," Peters says. "You've had business success, and now you want to create your legacy. It's moving the goalposts further. That recommitment gives the decision maker the energy and drive to continue on." Sometimes, Peters says, recommitment means making a change. "You think you've done everything you want to do here, and now you want to do this other thing. And you're in your mid-50s--which is a typical age for this--so it's now or never. It winds up being a recommitment to yourself."

5. Letting Go

Letting go is a strategic business decision, especially for a company founder, Peters says. Whether you decide to move on when you reach your recommitment point or recommit to the same company and spend many more years in your role, there comes a time sooner or later when even the best leaders need to move on from their roles. "How gracefully you make that decision and handle the transition depends on succession planning," Peters says. It can take as long as five years to choose, mentor, and train the person who will take over your role, and then step aside when he or she is ready to lead without you. "So many founders think, This is my baby; it all depends on me," Peters says. "Part of being indispensable is taking on the responsibility of choosing the next leader and preparing that leader for success."