The company with the second best organization ends up second place in the market.
– D. Wayne Calloway, CEO PepsiCo.
Leaders do make a difference according to research based on facts. Leadership often surfaces in a battle or fiscal emergency, where the consequences of poor judgment are fatal. But, can an extraordinary person make a difference in a business organization or a team?
Studies continue to indicate that leadership is often exemplified in teams and small organizations. For example, small product development teams have developed breathtaking products, project teams have constructed wonders of the world, and small combat teams have changed the outcome of battles and even wars. In all these instances, the leader’s personality had a dramatic impact on organizational performance.
A simple business example also illustrates the power of leadership. The captain of a fishing vessel can be a leader who makes a noticeable difference. A fishing vessel is a unique environment. It’s a mobile small business whose success is determined by its catch of fish. It’s isolated from many influences. It’s self-contained and can be studied. One study found that 40% of the variation in the herring catch among boats in the country’s fishing fleet depended on the personality of the captain. A similar survey of top US and Canadian companies concluded that 15 to 25% of the variation in a company’s profitability was directly due to their chief executives.
A huge issue is being discussed these days. The difference between what a CEO makes and what’s the average salary of its employees make has been increasing. At what point do you think the leader makes too much?
Life Lesson Earned: Most people don’t work to monetize their efforts and their company. What would you have to do additionally to make a demonstrable value added or monetizing difference in your organization?