Tag Archives: higher performing organisations

Is Investing in Leadership Worth the Hype?

leadership impactOk a slightly provocative question perhaps?  But do we think of leadership development as a necessary “retention cost” or an investment in culture and organisational performance?

Comprehensive research presented at the Future Jobs Forum in Australia in October 2011 identified that positive leaders and progressive management practices are central to increasing productivity in the workplace.

An 18 month Australian landmark study by the Society for Knowledge Economics, found that companies with strong leadership and a positive workplace culture are significantly more productive and profitable than their less progressive peers.

The report – Leadership, Culture and Management Practices of High Performing  Workplaces: The High Performing Workplace Index –followed 18 months of research involving more than 5,000 employees. The report found that High Performing Workplaces (HPWs) have 12 per cent higher productivity than Low Performing Workplaces (LPWs) when ranked in terms of their innovation, employee engagement, fairness, leadership and customer satisfaction.

What’s more, it found that the quality of an organisation’s leaders and their ability to innovate and create positive employee experiences was directly related to the organisation’s financial performance and productivity –

the average profit margins of HPWs are three times higher than those of LPWs.

The study demonstrates that leaders in higher performing organisations prioritise people management as a key priority, involve their people in decision making processes; are more responsive to customer and stakeholder needs;  these more effective leaders also encourage a high degree of responsiveness to change and learning orientation, and enable their staff to fully use their skills and abilities at work.
The identified high performing organisations are not just much more profitable and productive, they also perform better in many important “intangible attributes”, such as encouraging innovation, leadership of their people, and creating a fair workplace environment.

This was a landmark report when it was released and it provides some interesting measures of leadership impact .

Check out the full report here

As someone who has been working within or consulting to organisations for many years, it still astonishes me that the concept of Leaders and the environment they create having an impact on the performance of their organisation is seemingly a revolutionary idea.  Talk to any employee of a large organisation for any length of time and they will be very clear for you what impact their Leaders and Managers have on them and their motivation and capability to be successful.

So why aren’t more organisations focusing on the key leadership attributes and management practices that improve productivity and profit?

Well there are probably a number of reasons from budget pressures to competing priorities or a lack in confidence in training and development return on investment.

Whatever the excuse, under investing in your leadership capability carries a huge opportunity cost. I  passionately believe (and always have) that building leadership capability through properly designed leadership programmes has a huge impact on  change agility, engagement, organisational and team performance, it looks like the research continues to back this up!

Not sure on how best to develop your leaders’ capabilities to turn  your organization into a High Performing Workplace? Well we are happy to offer you a free no obligation white board and coffee session to help you get clearer on your questions and possible solutions. Click here to contact us