leadership capacity is critical to organizational success

March 10, 2010

Very interesting study on leadership by the The Ken Blanchard Companies on the importance of leadership. Following is a short excerpt:

Earlier research has shown that there is a Service-Profit Chain, a Value-Profit Chain, and an Employee-Customer-Profit Chain. Blanchard® research indicates that there is also a Leadership-Profit Chain. The data clearly shows that strategic leadership as well as organizational leadership capacity are critical to overall organizational success.

In addition, leadership impacts customer loyalty and devotion as well as employee engagement and passion. We found throughout the literature that, often, leaders attempt to influence organizational vitality through overhead control and fiscal measures, which has been proven to be ineffective over the long term. Many leaders believe that they can impact organizational vitality by tinkering with the process and policies directly governing the use of economic resources rather than educating, empowering, and supporting employees’ wise use of resources. Thus we determined that the key variable that drives long-term sustainability and organization profitability is a combination of strategic and operational leadership actions that drive employee passion and customer devotion. (emphasis added)

Very interesting paper and worth reading if you enjoy learning about leadership. Click here.
BG