Leadership: What Really Matters

Leadership is the single most important human-capital issue in a company or organization, it’s a critical part of the organizational health, which is an important driver of the company’s performance and/or shareholder returns.

Well, nothing new under the sun, you might think, because phrases like these are well known and appear in every second ‘how-to’-book about management.

Therefore, it’s of much bigger importance to determine what specific leadership-qualities are the most effective to reach the intended result.

That’s exactly what consulting company McKinsey did. The result of a broad survey of 189’000 people in 81 diverse organizations around the world suggests, that only a small subset of leadership skills closely correlates with leadership success. 

In a first round, the study came up with a list of 20 distinct leadership traits (see table 1 – ‘A toolbox for leadership success’) of which 4 kinds of behavior account for almost 90% of leadership effectiveness. 

Let’s examine these 4 principles: 

Solve problems effectively

The process that precedes decision making is problem solving, when information is gathered, analyzed, and considered. This is deceptively difficult to get right, yet it is a key input into decision making for major issues (such as M&A) as well as daily ones (such as how to handle a team dispute).

Operate with a strong results orientation

Leadership is about not only developing and communicating a vision and setting objectives but also following through to achieve results. Leaders with a strong results orientation tend to emphasize the importance of efficiency and productivity and to prioritize the highest-value work.

Seek different perspectives

This trait is conspicuous in managers who monitor trends affecting organizations, grasp changes in the environment, encourage employees to contribute ideas that could improve performance, accurately differentiate between important and unimportant issues, and give the appropriate weight to stakeholder concerns. Leaders who do well on this dimension typically base their decisions on sound analysis and avoid the many biases to which decisions are prone.

Support others

Leaders who are supportive understand and sense how other people feel. By showing authenticity and a sincere interest in those around them, they build trust and inspire and help colleagues to overcome challenges. They intervene in group work to promote organizational efficiency, allaying unwarranted fears about external threats and preventing the energy of employees from dissipating into internal conflicts.

As a final thought: ‘Effectiveness‘ – the capability of producing a desired result – origins from the Latin word effectīvus, which means ‘creative’ and ‘productive’ – aren’t these 2 virtues something that the Romanian economy could start to build up? It’s up to romanian leaders to get rid of their – sometimes ridiculous – authoritarian or dictatorial behaviour towards employees and adapt these effective principles to become real, respected – and successful – leaders.

Table 1: A toolbox for leadership success