Effective leadership is a critical part of organizational health and growth and an important driver of shareholder returns, according to Ohio State’s Ralph M. Stogdill with McKinsey’s Aaron De Smet, Bill Schaninger, with Matthew Smith.
Consistent with this report, more than 90 percent of CEOs said they plan to increase investment in leadership development because they see it as their single most important human-capital issue, reported McKinsey’s Claudio Feser, Fernanda Mayol, and Ramesh Srinivasan.
However, only 43 percent of CEOs reported confidence that leadership training investments will render an acceptable ROI.
To more accurately target developable leadership behaviors associated with superior organizational performance, McKinsey identified 20 critical leadership traits then surveyed 189,000 people in 81 organizations of varying sizes across industries.
They segmented organizations by leadership effectiveness measured by McKinsey’s Organizational Health Index, and focused on companies in the top quartile and bottom quartile.
The team reported that four skills closely correlate with effective leadership and explained 89 percent of the variance in leadership effectiveness between top-performing organizations and lowest-performing organizations:
- Effective problem solving by gathering, analyzing, and considering information before taking a decision,
- Operating with a strong results orientation, developing and communicating a vision and setting objectives to efficiently achieve results,
- Seeking different perspectives by monitoring trends affecting organizations and the external environment and by encouraging employees to suggest improvements,
- Supporting others by demonstrating authenticity and sincere interest in colleagues to build trust and help others manage challenges.
A related post outlines other findings of top leadership competencies required for optimal organizational performance, including “Big Eight Competencies” described by Lominger’s Voices® 360˚ Assessment:
• Dealing with Ambiguity
• Innovation Management
• Strategic Agility
• Motivating Others
• Building Effective Teams
• Managing Vision and Purpose.
-*Which leadership behaviors do you find most imperative?
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Gary W. Kelly wrote:
Good post. Thanks.
Healthy organizations can benefit from the study results. Those that are less healthy in terms of their organizational climate may struggle for some time, and not figure out why it fails to benefit them. Many need consultants to help them find the barriers they have created to success, and remove them first, then develop the climate that can produce good results through the practices described.
In many smaller organizations, the CEO and management have not had management training. They often have habits learned in the workplace, and those are not always good habits. They may use a top-down management style, that shuts off feedback or ideas from the line employees. Others expect other managers to “handle that stuff” and remain remote and detached–sometimes pursuing other interests while ignoring the employees. An atmosphere of mutual respect, open communication, and a culture of excellent in shared tasks is a prerequisite for applying the lessons of this study. If the climate is right, the recommendations will work well.
Kathryn Welds responded:
Thanks so much, Gary, for the reminder that mutual respect, open communication, and work collaboration are prerequisites to excellent leadership behaviors and superior business results.
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