When comparing the results of companies, it's relatively simple to assess tangible differences in a company's performance. But dig a little deeper into the data to try and understand the actual role that leaders have played in any success, along with the quantitative nature of that involvement, and the answers often become less clear. It begs the question, what is the tangible difference between a good leader, and a great leader?
Now some might quickly say "profit or shareholder return" but we know that a leader only creating these isn't truly great if they have retention issues, an inappropriate strategy for the medium to long term, are depleting the balance sheet for short term gain or reside over a poor culture.
According to the World Management Survey, conducted by Harvard Business School, Stanford University, MIT and the London School of Economics which analysed 12,000 companies across 34 countries to determine the impact that key management practices have on the results of a company, the actions of leaders are significant. Moving a firm from the worst 10% to the best 10% of management practices resulted in more talented employees, better worker well-being, 75% higher productivity, 25% faster annual growth and a $15 million increase in profits.
As a leader is ultimately accountable for the decisions, management practices and discipline within their organisation or business unit, we can then consider that these are broadly the metrics by which great results from a leader can be defined.
There are five main results that great leaders produce, in comparison to the results of average or good leaders.
Five results of great leaders
- Higher percentage of top performers
Top performers, the top 10% within an industry, are attracted to working for great leaders who are producing better results. These highly motivated and driven employees simply can't work for leaders they don't view as being great. They might tolerate a good leader, but only until they can find a better leader to join. They know a leader who isn't great is impacting their career, and they are acutely aware that they want their potential to count for the most.
- Higher retention
Great leaders are good role models and positively impact culture, causing employee engagement and satisfaction scores to rise. Subsequently, employees tend to stay longer as great leaders provide less reason to leave.
- Higher productivity
Great leaders get a higher return for each dollar paid to employees. People in the organisation are more effective because both a successful strategy generally produces a higher gross profit relative to their compensation and an attractive culture is conducive to a more productive environment.
- Consistent growth
You can bank on a great leader growing the business every quarter and every year. The efficacy of strategy, its ability to drive revenues and profits, and its ability to actively consider all potential growth-affecting issues, ensures that growth occurs no matter the environment.
- Consistent results
There are no surprises with great leaders. They have successfully mitigated risks and have built a group of employees and suppliers who do what they're supposed to do when they're supposed to do it, achieving the goals they set and producing the expected results quarter after quarter.
Yet pursuing these outcomes does not create these outcomes. In order to achieve the results above, there are five key roles that a leader must undertake. These roles are Accountability, Ambassador, Culture, Strategy and Succession Planning.
The problem is that without a prescriptive and measurable set of results and roles for a leader to focus on, they end up doing other people's jobs. They spend time helping other leaders, or oftentimes, simply an area they know or that interests them.
But in order to achieve great results as a leader, rather than simply good results, it's important to understand the tangible difference between good and great leadership, and step outside your leadership comfort zone.