How much difference does your leadership style make to the bottom line?
Psychologist Fred Kiel differentiates between virtuoso and self-focused leaders.
Virtuoso leaders have the following qualities:
- They are reliable, trustworthy and follow through with their commitments.
- They take responsibility for their mistakes and take steps to correct them.
- They accept that others make mistakes and they forgive them.
- They treat individuals as persons not as numbers or machines.
By contrast, self-focused leaders have the following attributes:
- They cannot be trusted to keep their promises.
- They tend to pass off blame to others.
- They punish well intentioned individuals for making mistakes.
- They are unable to care for others.
Kiel studied the effect of these two radically different leadership styles within a sample of 84 CEO’s. These CEO’s were ranked by their teams in terms of the above qualities.
Over a period of two years, the companies led by virtuosos delivered a return on assets of 9.35% compared with only 1.93% for those led by self-focused types.
Employees under the virtuoso were far more satisfied with their company. The virtuosos also made far better financial decisions.
Kiel’s study ran for only 2 years. One shudders to think what kind of corporate culture would be developed under a self-focused leader. Their qualities, as listed by Kiel, would seem to have one thing in common: A failure to recognise their own limitations and to instead blame these on others. If such a pattern were to ripple through their company further financial losses would be represented in workplace bullying, depression amongst the staff and absenteeism. There would also be the risk of action being taken through the courts as well as the cost of out of court settlements.
However, it is the human cost that should concern us most. We must be much more stringent in our determination as to who is the right person to be CEO and we should insist on regular training and review along the lines described by Kiel.
Source: KRW International, www.krw.intl.com