Research finds leadership critical to organisational performance

Research by The Ken Blanchard Companies identified connections between leadership capacity and organizational vitality, the research findings indicate that “strategic leadership as well as operational leadership capacity are critical“.

“Strategic leadership defines the imperatives for everyone in the organization,” says Blanchard. “It is the ‘what’ that proves the key relationships and metrics needed to ensure that all units follow the same strategy.” According to Zigarmi, who joined with Blanchard to drive the study, “Organizational management practices provide the ‘how’ in organizations—enabling departments and employees to understand the manner in which they specifically contribute to organizational success. These are the procedures and policies that clarify how each unit will achieve the overall strategy.”

The Overall Findings

Analysis of the research…. suggests that leaders who hold people accountable and ensure effective, productive behaviors in their people are the most effective influencers and drivers of organizational results. Equally important is a leader’s ability to affect the mood, attitude and engagement of employees and the overall culture of the organization through a specific chain of events that are implicitly linked.

The research also revealed that Employee passion results from the employee’s positive experience and overall satisfaction with the organization, its policies, procedures, products, and management practices, and directly predicts customer devotion and organizational vitality. Hard measures of employee passion include retention, absenteeism, tenure, and productivity. Soft measures include employee perception of fairness, justice, and trust. Customer devotion, another direct indicator of organizational vitality, occurs as a result of positive experiences with the organization’s products, services, policies, procedures, and personnel. Hard measures of customer devotion include customer retention, length of the customer relationship, number of transactions, average transaction size and referral of new clients.

The conclusion: Creating an organization that is successful and effective is an inside-out proposition. The quality of the culture, the quality of management practices, and the alignment of these practices with key strategic initiatives rests with leadership…… leaders also hold the key to organizational vitality—the creating of an environment that allows employees to win and be passionate about what they do. By taking care of employees, leaders establish an environment in which the employees take care of the customers at a level that causes the customer to want to return year after year.

Leadership is the key to organisational health, yet we still have too many managers and too few leaders in organisations. Sadly, leadership development often takes a back seat to day-to-day operational pressures. This research confirms my belief that leadership development is one of the most important investments we can make.

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Tagged as: Management, Research, Results