Why all the Fuss about Leadership?

Gather any group of CEOs together and ask them what their top five concerns are about the future of their enterprise and Leadership and Leadership Bench Strength will be among the most frequently sited concerns. Why all the fuss? Does leadership really make that much difference?

My experience, along with the research, says “yes”. I remember taking a trip to Mexico to visit a company’s facilities there. I was traveling with executives of both the U.S. parent company and those of the Mexico subsidary. We were scheduled to travel to five cities over the week and visit the various retail formats that this company had throughout the country. The five of us were on the plane discussing each of the locations where we would visit. We had with us, two documents for each of the locations, the P&L and the HR Scorecard, where we could learn about the profitability and employee retention in each facility. We wanted to show support as well as learn all we could about the manager’s perception of their successes as well as their challenges. One thing that made this trip an experiment in leadership was that this company would often have two to three different retail formats in the same parking lot, serving the same population and drawing from the same base for its employees. Some of the outlets were profitable and some were not.

The success or lack theirof was evident immediately upon entrance into the store. Where there was success the people approached us with enthusiasm and pride, ready to tell us stories about their successes, their profitability, and their potential for earning a bonus. Where the profits were not so great, the employees stood back and only the manager would approach us. Though the successful outlet was just across the parking lot, more often than not the manager would begin to tell us how difficult the market was, how the Maquiladoras were stealing their employees by offering better pay and benefits, thus making it difficult for them to establish all that would be required for success. It became apparent after several of these stops that the primary difference between the successful outlets and the unsuccessful ones was the leadership in the facility.

Additionally, when I speak to regional directors or vice presidents responsible for multiple facilities around the country I am told time and again, that they can tell where there are leadership problems in just a short time after entering one of their facilities. They tell me there is a different atmosphere among the employees that often shows up on one of several of their scorecards as well.

The fact that leadership makes the difference is much more than anecdotal. The research validates this as well. In his highly acclaimed book, Good to Great, Jim Collins sets out to determine what led to the turn around in the companies he highlights. As much as he had hoped to avoid writing a book about leadership, his researchers compelled him to look at the evidence. Leadership is what it took to move those companies from good to great, albeit leadership that focused on all the other success factors outlined in the book. In the Gallup research reported on in First Break All The Rules: what the world’s greatest managers do differently, Buckingham and Coffman point to the front line leader or manager as being the key to shaping the perceptions of their employees in such a way as to have a statistically significant, positive impact on productivity, profits, customer satisfaction and employee retention.

Leadership, more often than not, is the difference between good and great results. That is the reason the executives surveyed note it as one of their top five critical concerns. And the best of those executives invest in the growth and development of their leaders because they know it pays great dividends. There are lots of things you can do to develop your yourself as well as your leaders, but that is a topic for a different discussion. Right now, be reminded to take a closer look at the value and importance of leadership. It trumps most everything else.

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