3 Ways Leaders Impact Organizational Performance


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Last week, we started our 5-part series, The 5 Keys to Strategy Execution, with our article on Key #1, Strategic Understanding.  Today’s article will focus on the second Key, Leadership.

We are all well aware that Leadership is made up of a broad set of skills that are critical to an organization’s collective achievement of business goals. It is only through strong Leadership that people across an organization focus on the business strategy and share common goals.  It’s through Leadership that the workforce engages.  And it’s through Leadership that extraordinary accomplishments are made.  Leadership skills are so critical that articles on this subject are ubiquitous:  we devour article identifying Leadership attributes, sharing the techniques used by the best leaders in managing priorities and relating what great leaders do and don’t do.  And, while I haven’t tracked this, I’m confident that LinkedIn group discussions on Leadership probably generate hundreds of comments per week.

But, what is Leadership? Kevin Kruse provided the best definition of Leadership I’ve seen, in his article on Forbes, “What is Leadership?” where he shares the wisdom of Drucker, Bennis, Gates and Maxwell and then provides his own excellent definition: “Leadership is a process of social influence, which maximizes the efforts of others, towards the achievement of a goal.”  Read his article in its entirety at http://www.forbes.com/sites/kevinkruse/2013/04/09/what-is-leadership/ .

Think about it:  Leadership is a process of social influence… Today’s article focuses on 3 dimensions of Leadership that significantly impact organizational performance:

  • Credibility
  • People-skills
  • Influence


Credibility fosters trust and confidence throughout the organization. How have you felt about following a leader lacking credibility? Or, when you’ve followed a leader who had high credibility?  It stands to reason, as well, that high credibility, when perceived as an indicator of strong financial performance to come, can draw investors.  Leadership credibility is so powerful it can build excitement among employees to achieve higher performance. The best leaders inspire people to innovate, to go the extra mile, and to transform industries.  People want credible leaders and respond to that Leadership with energy and commitment.  If we simply look at history, it’s so easy to recognize great leaders.  Martin Luther King, John F. Kennedy, Abraham Lincoln, Gandhi…are just a few of many who have demonstrated unquestionably the power of Leadership in bringing about transformation through ordinary people.  Who do you think of when you think of great leaders?

As powerful as credibility can be, it is as fragile as glass. In a split second it can be shattered, generating short or long term repercussions. Take a moment to think about the leaders you’ve observed. What did they do that built their credibility, sustained it and/or lost it? What was the impact on people and the organization? I believe this true because credibility has its roots in trust.  Do we not decide a leader is credible when we trust his/her true intentions are good for us and the organization?  Do we not decide a leader credible when we learn we can trust his/her judgment?  Do we not decide a leader is credible when we see we can trust in his/her wisdom and industry knowledge?  Take just a moment to think about leaders you’ve decided were credible in the past.  What led you to that decision?


Communication and interaction of all kinds require people-skills if we want to impact or touch others.  How can a leader make a difference in organizations without connecting with people’s hearts and minds?  The best leaders engage with people and build strong bonds.  One now-famous example is Artie T with Market Basket, whose bonds built the kind of loyalty most of us have never before witnessed in an organization.

Strong leaders read people, respond to situations and to pressure appropriately and  monitor their own body language.  They apply their understanding of people and of the business to move the organization through change. As a leader, how would you assess your people-skills?


The third dimension of Leadership that impacts business performance is influence.  An article in Harvard Business Review in June, 2013, “When CEOs Talk Strategy Is Anyone Listening?” cites a survey in which only 29% of employees in companies with clearly articulated strategies had actually taken in the information. Here is a link to the article: http://hbr.org/2013/06/when-ceos-talk-strategy-is-anyone-listening/ar/1

Skilled leaders use their influence to drive a powerfully persistent focus on the business strategy among individuals and teams and across functions throughout the organization.  Influential leaders establish momentum through shared goals that enable people in Sales to partner with people in Production, that bring teamwork to Quality and Manufacturing, and that build mutual understanding and respect between Office and Direct Labor groups.   Can you think of leaders who have done this well? How did they embed this kind of eye-on-the-ball focus into the culture?

Organizations typically “cascade”  communications down through the hierarchy to efficiently share information about the business strategy, goals and results. And, cascading can work well, involving all levels of management in delivering key communication, sharing leadership.  We must keep in mind, though, that cascading this communication can water down the messages as well as distancing the CEO from the people when setting direction for the organization.  As the top executive,  it is the  President/CEO whose personal influence, communication and interactions cannot be sacrificed for efficiency. There is no substitute for the personal touch and visibility of the President/CEO.  Others may join with the President/CEO in communicating key messages to the organization, but should not substitute for the senior executive.

Leadership is the 2nd of 5 Keys to effective strategy execution. The 5 Keys are:

  1. Strategic Understanding
  2. Leadership
  3. Activities and Structure
  4. Metrics/Balanced Scorecard
  5. Human Capital

Together with Market Discipline, these comprise the recipe for successful strategic performance.  Our next article will focus on Activities and Structure.

How does your organization’s Leadership measure up in Credibility, People-Skills and Influence? What examples can you share? Are there other dimensions of leadership that impact organizational performance  that you’d add?  Please share your opinions, experience and knowledge by commenting.

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