The Impact of Leadership on the Bottom Line

The research showing the connection between leadership and the bottom line continues to strengthen. Most recently, researchers Jack Zenger, Joe Folkman and Scott K. Edinger analyzed a database of 300,000 feedback reports on approximately 30,000 managers to answer six questions: 

  • How does leadership drive profit?
  • How do organizations and leaders maximize, if not double, profit opportunity?
  • How do we capitalize on leadership as a means to profit and growth?
  • What issues can leaders impact that will most effectively drive profit?
  • What data supports the claim that extraordinary leaders double profits?
  • How do we identify and develop extraordinary leaders?

Publishing their results in an article entitled How Extraordinary Leaders Double Profits, the authors identified concrete performance metrics that allowed them to compare measurable business results with leadership effectiveness. Using the data they were able to show the performance difference between business units with good leaders versus those identified as having poor leaders and to also identify the leadership behaviors that separated the two groups. 

Be sure to check out this article to learn more about the ways that leaders impact performance. 

If you would like to explore some of the ways that leader behavior is impacting performance specifically in your own organization and what the costs or ignoring it are, take a look at a Cost of Doing Nothing Calculator on The Ken Blanchard Companies web site.  It uses some of the same source material referenced by the authors of this article to help you calculate the impact of better leadership in your own organization.

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