Leadership Impacts the Bottom Line...Is leadership development a key component of your overall strategy?

Leadership Impacts
the Bottom Line ...
Is leadership development a key
component of your overall strategy?

Discover Truth. Get Coached. Lead Powerfully.

www.ArsethInsights.com

“Apple stock recovers from initial shock of Steve Jobs resignation” 02
~ Huffington Post Headline

The impact of a leader
can’t be underestimated



Could your company’s leaders be holding you back? 03

A conclusive link exists between a
company’s leadership practices
and enhanced financial returns.

Hewitt 2002



Leadership impacts employee productivity 04

There is a statistically significant correlation between
high-performance work practices and intermediate
employee outcomes such as turnover, productivity, and
overall corporate financial performance.

Huselid, M., A. (1995). The Impact of Human Resource Management Practices on
Turnover, Productivity, and Corporate Financial Performance. Academy of
Management Journal. Volume 3 8 Number 3 , pp. 635 -672.



Leadership impacts employee turnover 05

People leave organizations for a variety of reasons
closely related to leadership competencies including:

1. Lack of respect from or support of supervisor (13%)
2. Supervisor’s lack of leadership skills (9%)
3. Poor employee relations with a supervisor (4%)
4. Lack of recognition (4%)
5. Supervisor incompetence (2%)

Saratoga Institute



Leadership impacts customer satisfaction 06

Leadership practices which lead to higher employee
satisfaction scores translated into higher customer
satisfaction scores, and subsequently into bottom line
impact.

Harvard Business Review “The Employee-Customer-Profit Chain at Sears”
Anthony Rucci, Steven Kirn, and Richard Quinn



Bottom line - leadership development pays 07

Organizations who prioritize leadership development
realize more impact on their business

more effective at raising
84% 73% increase in employee retention
quality and bench strength of
their leadership pipeline

increase in leaders’ ability
67% 66% improvement in
to engage and work
business results
collaboratively

High-Impact Leadership Development, Bersin & Associates, 2008



The job of a leader 08

Recruit, Develop, Retain Develop long-range
course of action

Engage and Inspire Constantly evaluate
performance and strategy



In addition, the new skill set for leaders includes: 09

Fostering a climate
of innovation
Collaborating across boundaries

Reaching across mediums and
geographies

Handling uncertainty and reacting
quickly to new opportunities



Effective leadership now requires interdependence 10

Increased complexity, uncertainty, speed of
The role of technology, innovation, and breadth of scope,
the single all with a global emphasis, requires a different
heroic leader approach
is no longer
effective

It’s more and more difficult for leaders to solve these
complex challenges with their own resources

HBR Panel 2010, CCL white paper 2009, DDI white paper 2008



Interdependence, as the new norm, creates a need for different
leadership skills 11

Managing across Driving innovation across
horizontal boundaries the organization
• 71% of executive leaders see • When asked about the top 10 trends
managing through silos, turf battles, to impact organizational strategy over
and matrix management as the the next 5 years, the drive for
biggest challenge in this new innovation was number one (92%)
environment
• There is a direct correlation ...
• 86% of senior executives said integrating expertise and experience
collaborating across boundaries is across all functions is a powerful route
extremely important, only 7% said to innovation
they did it effectively

CCL Survey, 2009



12

Leadership can be developed



Developing leadership talent for the future 13

Start at the top Senior management defines what is needed

Assess Evaluate the current talent pool

Strategy
Develop a strategy to fill gaps and prepare for opportunities
Development

Monitor &
Assess progress and individuals frequently
Measure

Reward Differentiate compensation to reward leadership



Key principles of leadership development 14

Prioritize Variety & Challenge
The right
experiences to
Strategy Successful leaders
have a variety of specific
those most likely All leadership and challenging work
to advance and and disorienting
mission -critical development activities experiences
employees
should align with
company strategy

Balance
Learning Experiences Build capabilities for
Most impactful include: new ways of working with a
On-the-Job (70%) balance between individual
Relationships (20%) competencies and the
Classes & Training (10%)
Demand Pull collective capabilities
of teams
Demands of the job
pull the leader to
develop new skills



The most impactful leadership development experiences 15

1. Empowered decision-making
TOP 2. Customized development plans

10 3.
4.
5.
6.
7.
Robust feedback
Skill training in people management
Work in a new line of business
Peer interaction and learning
Sessions with an executive coach
8. Lead high-quality direct reports
9. 360 feedback
10. Turn around a struggling business

CLC 2001



Getting to yes – gaining the support of management 16

Provide data to support a change in approach
• Share statistics, research, or case studies that substantiate your recommendation
• Quantify the implications if no action is taken
• Conclude with ROI
Present recommendations in light of the business strategy and challenges
• Talk their language
• Explain how your recommendations advance the company strategy
• Articulate why this is the right time

Make it easy to say yes
• Start small by using pilots
• Minimize cost by doing what you can internally and focusing on critical components
• Build credibility through a grass roots approach
• Introduce solutions whenever possible that support a more comprehensive strategy
Have a clear call to action
• Make it clear what you want them to do



17
www.arsethinsights.com

Thank You !
To learn more about executive coaching and leadership
development, contact Suzann for a complimentary consultation

Suzann Arseth
Executive Coach
suzann@arsethinsights.com



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