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The Impact of Leadership Style on Organizational Performance

Leadership Styles - A Closer Look

There is a myriad of different leadership styles, and, as you might imagine, many different factors that influence each style.  Some stem from the leader's personal style.  Others can be a combination of personal style, organizational values, and specific competencies or skills.   Add to the mix different business challenges and employee skill sets, and we're looking at a very complex situation with lots of variables.  The Hay Group, a global management consulting firm, identifies six distinct leadership styles:

  • Directive - Exercises tight control and expects immediate compliance
  • Visionary - Explains "why" and provides long-term direction/vision
  • Affiliative - Is concerned with being "friendly" and creates harmony
  • Participative - Invites employee participation, builds commitment
  • Pacesetting - Leads by example, accomplishes tasks to high standards
  • Coaching - Supports long-term professional development of employees

Which do you think is your style?  Upon reading this, it's a natural inclination to try to fit yourself into one of these styles.  Kathy O'Doherty, principal of Executive Coaching Connections, LLC, a Chicago-area organizational development firm, advises that leaders can and should utilize many styles.  "Hay Group leadership styles provide a good framework to think about our own leadership styles.  A leader can embody two, three or even four of these styles.  In fact, the most effective leaders use the full array of styles.  Being truly effective means knowing when to wear the right "hat" to be the most effective in coaching and leading individuals and teams."  The Hay Group agrees: "Managers who use leadership styles effectively perform better."(1)

Styles Set the Tone

With so many styles at play, how does a leader focus to improve performance? O'Doherty points out that, "The ability to assess and adapt is critical."  The factors that influence how a leader acts are many:  

How experienced are your employees in the tasks you're asking them to perform?  Are there any apparent strengths or weaknesses? Are there time pressures and adequate resources to do the job?  Finally - how is performance rewarded, and how is lack of performance addressed?  

The leadership style you use to address these questions has broad implications. says O'Doherty: "By using the right combination of styles to address your specific organizational situation, you begin to create a very specific climate."  Creating a positive climate, or ‘how it feels to work here,' in your organization is paramount.  This is essentially the environment in which your employees will function during day-to-day operations.  

Think About the Paradox...

One of the leadership models that O'Doherty recommends that leaders consider is Level 5 Leadership, discussed by Jim Collins in Good To Great.  The term "Level 5" refers to a hierarchy of skills and capabilities identified in Collins' research.  Collins defines a Level 5 Leader as one who demonstrates the powerful combination of a fierce resolve for results, to be the best company or the best team, and personal humility and modesty.     

"What's it like to work for a Level 5 leader?" O'Doherty asks.  "Everyone is focused on getting great results and always looking to improve.  Each individual feels a part of the success.  The leader doesn't take the credit but rather takes responsibility.  While the Level 5 Leader may use different styles and skills, his or her personal standards are consistent.  This leader looks for feedback:  "How can we get better results?  How can I be a better leader?  How can we be a better team?'"

"Consider how far a positive environment like that will go in creating an engaged, highly-motivated and ultimately high-performance workplace," O'Doherty suggests.  "It has huge implications for performance, motivation, and results."  

Tools and Tips for Creating the "Right" Environment

There is no one game plan when it comes to creating the environment that will allow your organization to flourish.  However, absent waving a "magic wand," leaders can use a number of tools and techniques to foster a positive climate.

  • Feedback is your friend.  Sometimes the act of "receiving feedback" can conjure up mental images of negativity.  However, most experts would agree that, when encouraged to give feedback, people often feel that they're contributing to the decision-making process and have more "skin in the game." Don't just ask for feedback.  Invite it by asking questions like, "What's the one thing I could do to be a more effective leader?"
  • Establish expectations clearly and early.  Ambiguity can foster uncertainty and a lack of focus and direction.  Be sure to articulate your expectations clearly for all of your employees.  Being available to discuss expectations goes a long way too.   
  • Create an encouraging environment.  When creating the work environment, remember that this is an opportunity to allow people to grow and develop.  A sure sign of an invested employee is that they feel that they are personally growing along with the organization.  
  • Look for problems.   Achieving great results means finding, discussing and fixing what's not working so well.  It's important that leaders create an environment where issues can be discussed openly.  Establish routines and processes to get at the issues.  O'Doherty suggests using the Executive Coaching Connections, LLC tool called "3Ups/3Downs" when looking for a way to acknowledge individual and team accomplishments and identify problems in their early stages.  "We've found that teams are able to surface issues as well as design solutions," she says of the process.
  • Recognition goes a long way.  Think back to the last time you got positive feedback for a job well done.  How did it make you feel?  Harness that positive energy, and remember that praise goes a long way.  Recognize individual and team accomplishments.

O'Doherty: "When it comes to defining your leadership style - or combination of styles - there are lots of tools and exercises, definitions and models.  But at the end of the day, when it comes time to living out that combination of styles, we need to remember that leaders lead other people.  And the human bond is really our common bond.  A powerful, effective leader is one who can set the tone and expectation for driving results and genuinely connect with each individual.  Create a motivated team with purpose and alignment and watch the results come in." 

Hay Group's Leadership Styles and Organizational Climate Accreditation Training: Helping Leaders Create a High Performing Organization

Authored by EXPERT:  Steven Marks, Comunications Director, Executive Coaching Connections

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