Learn about what type of leadership behaviour organisations should encourage.

Existing research has consistently indicated that effective leadership is a critical aspect of organisational health and a key driver of shareholder returns. However, what defines good leadership has generally been subject to debate and anecdotal experience.

Should organisations focus on role modelling, agile decision-making, mapping out visions and adaptable leadership? Or should more emphasis be placed on clear and constant communication? Without a consensus to these discussions, it may help explain why only 43 percent of CEOs feel confident that their investments in leadership training will show results.

Recent research, however, has shown that there are four key leadership traits which closely correlate with success.2 With a sample size of 189,000 people across 41 diverse organisations, the results indicate these traits account for 89 percent of the variance between organisations with effective and ineffective leadership (Figure).

Figure
Four characteristics account for 89 percent of leadership effectiveness.

● Supporting others: being supportive means being understanding towards others and how they may feel. A leader who shows a genuine interest in the people around them forges trust between colleagues and can inspire and help them overcome challenges at work.

● Operating with a strong results orientation: focusing on results means emphasising efficiency, productivity and prioritising the work which produces the most value. Not only will the company develop a vision and set targets to achieve, but also follow through to see results materialise.

● Seeking different perspectives: this enables managers to gain a broader grasp of the changing business landscape, as well as stakeholder concerns. Typically, these types of managers would monitor trends affecting the company, encourage employees to contribute ideas and tend to make decisions with sound and unbiased analysis.

● Effective problem solving skills: with new challenges arising daily, solving problems effectively and in turn making the best decision available, is one of the most important facets of running a successful company. It is difficult to get right and involves understanding of the challenge at hand and critical thinking.

Undoubtedly, experience will also indicate that different business circumstances require different styles of leadership. However, for businesses invested in developing future effective leaders, prioritising these four traits would be a good place to begin.

Footnotes

^[1] See Aaron De Smet, Bill Schaninger, and Matthew Smith, “The hidden value of organizational health—and how to capture it,” McKinsey Quarterly, April 2014.

^[2] See Claudio Feser, Fernanda Mayol, and Ramesh Srinivasan, “Decoding leadership: What really matters,” McKinsey Quarterly, January 2015.