The level of ability that we display in each of our key leadership skills, as well as our actual leadership style, truly does matter. In fact, if you are content with just being a good, or average, leader, and haven’t taken the steps necessary to reach the next level to become a great or exceptional leader, then you and your organisation are missing out, according to science!
Research conducted and published just last year by Zenger Folkman indicates that if you want to increase the effectiveness and efficiency of your organisation, and literally double your profits, the one factor that will most impact your ability to do so is the actual quality of leadership within your organisation!
Level of Success Comes Down to Your Level of Leadership
Extraordinary leaders truly are different, and lead their teams to higher performance and results than those managers that merely perform to expectations and “meet” minimal requirements. According to Zenger Folkman’s data, great leaders outperform their counterparts in a number of core areas. It is these differences that lead to their phenomenal performance and results and that set them apart from others.
The study found that exceptional leaders dramatically improve results for their organisations in key metrics that drive profits, including: sales, employee retention, team satisfaction, engagement and commitment.
The Science and Statistics on How Great Leaders Drive Performance and Profits
Data from the study shows that when comparing the results of branch managers for a large company with locations across the United States, leaders who were placed in the bottom 10% based on their leadership skills and style actually lost the company $1.2 million USD, but the middle 80% of leaders in the same company saw an average profit per branch of $2.4 million USD. The remaining top 10% of leaders, however, more than doubled the amount of profit of the managers in the middle tier of leadership ability, with an average of $4.5 million USD in profit per branch.
The results of this study correlate with other data from Zenger Folkman that indicate that this phenomenon is widespread, and applies to leaders worldwide, regardless of a sector or country’s current economic state. For example, additional data provided in the study cited the performance results of nearly 100 leaders in a retail corporation in Mexico that saw the average same store sales only improve 0.7% for the bottom 10% of leaders. The top 10% of leaders in the company saw an average performance increase of 7.4% from the prior year, despite economic difficulties in the retail sector and that country as a whole at the time of the study.
Additional research cited in the Zenger Folkman study indicated that organizations with more exceptional leaders gain their competitive edge in the form of lower hiring and training costs related to greater employee retention and satisfaction, and greater productivity that results in lower costs due to exceptional leaders directly affecting and driving greater employee engagement, effort and commitment.
Additional statistics cited in the Zenger Folkman report that back up these findings include research that indicates that 80% of employees that directly report to leaders in the lowest 10% tier of skill and ability think of looking for other employment, compared to only 4% of employees who report directly to leaders in the top 10%.
When workers are paid the same, nearly 63% of employees that report to leaders in the bottom 10% say they are dissatisfied with their pay. However, 60% of employees that report to a leader in the top 10% and are paid the same wage, report increased satisfaction with their pay rate.
Data also supports the conclusion that exceptional leaders increase engagement and commitment, as 57% of workers that report to a leader in the top 10% report they would go out of their way to do their best work and “go the extra mile,” as compared to only 13% of workers that say they would do so and happen to report to a leader who exhibits leadership skills and a style that would place them in the bottom 10% for their organisation. This one fact alone can have a profound effect on profitability in organisations whose labour is roughly half of their costs. Increasing productivity, a mere 10% by increasing employee engagement in these companies roughly translates to a 100% increase in profits!
Are You an Extraordinary Leader?
Based on the data, it’s clear that if your organisation wants to drive profits and increase performance, it must start with finding extraordinary leaders that have the skills and leadership style necessary to increase team engagement, satisfaction, retention and commitment.
Whether it’s a specific leadership skill that you need to acquire and develop further, or, if you need other coaching and mentoring to help you learn how to focus on your strengths and develop your unique leadership style, get in touch today and find out how we can help you go from an ordinary leader with average results to an extraordinary one whose performance and results stands out and speaks for itself!
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