The connection between leadership and the bottom line has, to an extent, been made. Yet most of what we’ve seen published on the subject of leadership is the result of closed-door boardroom brainstorming sessions and personal treatises of famous, successful executives. While interesting, many feel torn by the variety of opinions on key issues involving leadership and the slew of contradicting leadership development models. Zenger Folkman wanted to provide a more scientific approach to connect the link between great leadership and the bottom line.
“Though we may not be able to determine an organization’s raw profit, we can measure the factors that lead to profitability with consistent results,” said Jack Zenger, CEO of Zenger Folkman. “These indirect influences of leadership effectiveness include: employee satisfaction/commitment, Employee turnover, percent of employees who think about quitting, Satisfaction with pay, and high commitment.”
The results are dramatic. For instance, in the case of the impact of leadership effectiveness on employee satisfaction/commitment, the bottom 10% of leaders were below the 25th percentile on employee satisfaction/commitment. Compare that to leaders in the top 10%, who had employees in the 75th percentile for satisfaction/commitment, and the difference is clear.
Here’s another example: more than 50% of employees that “think about quitting” their jobs report to leaders in the bottom 10% versus just slightly more than 15% who “think about quitting” their positions reporting to leaders in the top 10%. Organizations can waste a lot of money and time in training new employees.
“In one study a Fortune 500 commercial bank commissioned us for, we found that poor leaders lost money, good leaders made money and great leaders were able to double profits,” said Joe Folkman, president of Zenger Folkman. “There is enormous potential for organizations to improve their bottom line by developing leaders who, for instance, inspire people to perform at higher levels and who can recognize and remove obstacles to employee productivity.”
To learn the results from the rest of Zenger Folkman’s research attend the webinar, How Extraordinary Leaders Double Profits: Why Excellent Leadership Deserves Your Attention, on Jan. 21 by registering at http://zengerfolkman.com/event/webinar-extraordinary-leadership-the-key-to-increasing-profits/. For more information on these findings, and how to incorporate them into a leadership development plan, visit www.zengerfolkman.com.
About Zenger Folkman:
Zenger Folkman is the authority in strengths-based leadership development. Their award-winning programs employ research-based methods that improve organizations and turn good managers into extraordinary leaders.
