The term leadership represents many ideas. In some contexts, leadership refers to position, e.g. "the senior leadership team." In others, it refers to those who are at the peak of their profession, e.g. "she is the leading performer of the team." In still others, leadership refers to characteristics that drive positive influence and results. It is this latter context that is most meaningful to overall organizational performance. It is also the least understood and most inconsistently applied.
In defense of this misunderstanding, characteristics that drive positive influence and peak organizational performance vary from organization to organization. There is not one universal standard. An organization that relies on frequent product innovations would value the leadership competency of creating a climate of creativity more than an organization that relies on being a low cost provider which would likely more value the leadership competency of operating an efficient organization.
Further compounding the difficulty in understanding, not only do leadership characteristics vary, most are intangible. Characteristics of influence by definition are indirect. Performance improvements are often the ripple effect of someone else’s influence. If you do or say something that motivates your employees to take more responsibility for the quality of their work, the resulting improvement in work quality is theirs. Characteristics of influence that result in higher employee engagement, a stronger work ethic, more responsible empowerment and a deeper sense of ownership for results are extremely valuable, but difficult to objectively measure.
The question becomes how to best measure leadership. Some would rightly suggest than an organization’s culture, attitude, values and energy level give insight to the quality of leadership. However, cultures, attitudes, values and energy are means to an end, not ends in themselves. The same can be said for leadership. Leadership is not the objective but the means to an objective. The objective for example being improved business performance. Therefore, if you want to assess the quality of your organization’s collective leadership competency, the best measure is business performance over which the organization has control.
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