16/12/2013 08:22 GMT | Updated 14/02/2014 05:59 GMT

Leadership and Profitability

Employees do not quit jobs or companies - employees quit their managers. This is quite a provoking statement, which gives food for thought. Especially if you consider that up to 45 % of all managers do an insufficient job in the eyes of their team, as a recent survey conducted by the US consulting company Gallup reveals.

Leading people is often seen as a side activity and taken for granted with some people being more talented than others, which is unfortunately still a widespread opinion in many organizations. Indeed, there are huge differences in the quality of leadership. But why is that?

Very often, a team member is promoted to a leading role based on proven technical skills. This way, the best sales person often automatically gets promoted to head of sales. However, someone who's technically brilliant doesn't necessarily possess the skills to lead a team: such a change of role often almost equals a change of profession. The new set of skills required for the leading role is often not recognized and in consequence not systematically developed. The statement that is often heard, "Just do it, you'll be fine!" shows how much the requirements of a leading role are often underestimated. In the worst case you lose the best technical specialist and gain an average leader who struggles along and becomes more and more frustrated and discontent. Let alone the impact on employee satisfaction and engagement.

Obviously, someone who got promoted into a leading role under these circumstances will hardly become a charismatic and passionate leader and will barely be accepted as a role model with followers who want to follow rather than having to do so. The latter is only possible based on a good and trustful relationship between leaders and followers, as this is a proven key element for employee satisfaction and engagement. This being said, systematic development of leadership competencies should be at the top of the list. Fortunately, an increasing number of organizations is beginning to understand this. Especially in high-performing workplaces, as opposed to organizations in which productivity and profitability are below average, statistics show that leaders are not only allowed to lead but also have the ability and willingness to do so, because they feel empowered and possess the necessary competencies. Out of these various elements, the ability of a leader to understand people's motivators, hopes and difficulties and to create the right circumstances and support mechanisms to allow people to live up to their full potential has the greatest correlation with profitability and productivity.

This indicates that outstanding leadership not only calls for the ability of a leader to build and preserve relationships and the ability to use a broad set of leadership methods adequately and effectively; it also calls for leaders with a stable personality, who know their own strengths and limitations and who deal with them in an authentic, relaxed and open way. Coaching is among the most effective and lasting development measures for achieving these qualities.

How does your team get the necessary support?

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