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Profit-Building Leadership Practices

Four practices have clearly been shown to correspond to financial returns.

September 18, 2003
Related Topics: Behavioral Training
Every researcher has his own take on what constitutes an effective leader.Some people study leadership traits, others identify leadership behaviors, andstill others match leadership actions with leadership situations. Add to thisthe fact that people still can’t agree on whether leaders are born or made,and whether leadership is an art or a science, and you begin to see why it’sso difficult to determine what is lacking--and what is necessary--in today’sleaders.

    That said, the University of Michigan has been studying leadership practicesfor 15 years to determine which ones directly correspond to bottom-line returns.The university’s research has been continuously updated and involves severalthousand companies on three continents. David Brewer, a principal with TheLeadership Consulting Group in San Francisco, uses the university’s data inhis leadership consulting practice. He says that over the years, four leadershippractices have clearly been shown to correspond to financial returns:

  1. The leaders make the company’s mission clear and compelling to everyone involved, including the executive team, customers, suppliers, stockholders, andthe board. "Effective leaders engage all stakeholders to see the mission inclear and compelling terms," he says.

  2. The leaders are not only close to the market, but also responsive to itsneeds. Leaders who excel, Brewer says, are constantly attuned to market data,customer input, and so on, and have an internal capacity to act on thatinformation and modify strategy accordingly.

  3. The leaders are team-oriented. "Successful leaders cultivate talent inothers and give credit where credit is due," he says.

  4. The leaders are consistent in their execution. The research shows thatgood leaders know they have to build an infrastructure in which everyone’sefforts are coordinated and integrated so that work is performed consistentlyover time.

    Brewer says that effective leaders communicate the mission, adapt to themarket, and involve people at all levels. "True leaders modify their own needfor achievement in order to make others high achievers."

Workforce, December 2002, p. 31 -- Subscribe Now!

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