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July 10, 2022

4 Ways Effective Leaders Help Sharpen Your Business Performance

Categories:  Assessments | Coaching | Leadership
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In life, there is no such thing as impossible; it’s always possible. ~Venus Williams

Can effective leaders improve your company’s bottom line? Research shows that they absolutely can! With so many businesses struggling with employee retention, inflation, and a possible recession, we know just how vital it is that businesses improve their overall performance.

Through the certification process in the Leadership Circle 360 assessment, I was introduced to the direct correlation between effective leaders and effective business.

Here are four ways that we’ve seen effective leadership improve company performance.

1. Effective leaders hire and retain top talent

High-performing leaders equate to high-performing teams. When your company invests in improving leadership effectiveness, you’re improving the culture from the top down.

That means that leaders will better understand what their teams need and where there might be gaps. They may also better communicate those needs during the hiring process to ensure that the people your company hires are actually people your teams need and with whom they want to work.

This type of leadership creates a more productive environment, but also one that can be resilient to changes or notice problems before they happen. When it comes to a tricky job market, you want your leaders to hire the right people and keep them for longer.

2. Production increases alongside leadership improvement

One of the most shocking things we’ve learned is that taking a leader from okay to exceptional can make a huge difference. It’s not just about improving the leaders you know aren’t doing well; improving a middle-of-the-road leader will increase production.

Zenger-Folkman’s research shows that the business will produce two times the results when you take a leader’s effectiveness from the 60th percentile to the 80th percentile (Source 1).

That means that even if your leadership team isn’t actively hurting your business if they aren’t extraordinary, you’re missing out on increased business effectiveness.

That’s a hard pill to swallow, but the difference between good and great is substantial. An effective leader is a business necessity.

3. Recession-proof your business with effective leadership

As we mentioned earlier, there’s a lot of talk of a recession on the way. If you’ve been in business for a while, you may remember how much a recession challenged your company.

Effective leaders give you the edge against your competitors when the going gets tough. It means your teams will be aligned, problems will be identified earlier, and decisions made will help your business thrive.

In a time when so many are nervous about the state of the economy, a way to recession-proof your business is to start investing in the development of your leadership team.

4. Investing in leaders has a higher ROI

Everyone knows how important ROI is. If your business plans to spend money on anything from new hires to marketing, you want to ensure you’re getting the most for those dollars. That’s especially true now when inflation increases, and people are worried about their bottom line.

Research from the Leadership Circle shows that when you invest in leadership development, you have a 38% higher probability of seeing that improvement translate into higher business performance (Source 2). Since most profit margins are well below 38%, investing in leadership development is money well spent.

Ready for more effective leaders?

If you’re looking to improve your business performance by fostering more effective leaders, we want to chat with you. Contact us today to get started.

Let’s work together, and we’ll bring powerful, positive change to your organization,


Lori Heffelfinger and James Jackman

Supporting Business Leaders to transform cultures and transition beyond the pandemic.

Source 1:
Zenger-Folkman (2009) The Extraordinary Leader: Turning Good Managers into Great Leaders 2nd edition McGraw-Hill Publishing

Source 2:
Leadership Circle

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