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What We Know About Leadership

Monday, October 14, 2013
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Leadership is one of the most important topics in the human sciences, and historically one of the more poorly understood. With good leadership, people and organizations thrive and prosper. Bad leaders perpetrate terrible misery on those subject to their domain.

When we first began studying leadership in the mid-1980s, we quickly discovered that the literature contained few defensible generalizations. Since then, we have been assembling a perspective on leadership that allows organizations to identify good leaders, identify bad leaders, measure leader performance and enhance business outcomes.

Defining Leadership

Leadership is usually defined in terms of a person's status in an organization -- if a person has the title, he or she must be a leader. However, consider what it takes to get ahead at most large, bureaucratic organizations.

Many such organizations rely on performance appraisals and supervisor nominations to identify and promote talented individuals. Because performance appraisals reflect how much supervisors like their subordinates, those designated high performers are often more skilled at office politics than leadership.

Leadership should be defined in terms of the ability to build and maintain a team that can outperform the competition.

Good Leaders

If leadership is the ability to build an effective team, then a good leader must be someone others are willing to follow. People look for four essential characteristics in leaders: integrity, judgment, competence and vision.

Integrity. People need to know that the person in charge won't take advantage of his or her position, and won't lie, steal, play favorites and betray subordinates.

Judgment. Judgment has two parts: pre- and post-decision. First, effective leaders process information quickly and make good decisions in a timely way. Second, effective leaders adjust when they make a mistake.

Competence. Good leaders are perceived as knowing what they are talking about, as being competent in the team's business. Subordinates see leaders who lack business acumen as empty suits, and are unwilling to follow them.

Vision. Good leaders explain to their teams the significance of their mission and how it fits into the larger scheme of things. By adopting a common vision, people can transcend their selfish interests and develop impersonal ends for their actions.

Bad Leaders

Our research indicates that two-thirds of the managers in corporate America are ineffective or incompetent, and ultimately will fail because they are unable to build or maintain a functioning team.

We asked a sample of working adults about the personalities of their best and worst bosses. Among the more than 2,000 respondents, 52 percent described their worst boss as arrogant, with 50 percent saying their worst boss was manipulative, 49 percent indicating their worst boss was emotionally volatile, and 48 percent reporting their worst supervisor was guilty of micromanaging. In addition, 44 percent described their worst boss as passive aggressive, and 42 percent said their worst boss was distrustful of others.

Personality and Leadership

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Who you are determines how you lead. Hogan assesses personality from two perspectives.

* Bright-side, or normal, personality describes people when they are at their best.

* Dark-side personality describes people when they are stressed, bored or simply not paying enough attention to their behavior. This behavior alienates subordinates and prevents managers from being able to build an effective team.

It's also important to understand what drives leaders' behavior. Values are the motives, interests and beliefs that determine peoples' choices and play an important role in predicting leadership style. If reputation describes how a person is likely to lead, values describe why they are likely to lead that way.

Finally, it is important to understand how leaders approach problem-solving. Cognitive ability describes peoples' ability to solve problems and make business-related decisions using textual, graphic and quantitative data.

Leadership Matters

Personality predicts leadership style. Leadership style, in turn, directly impacts employee engagement. Good leadership creates engaged employees, while bad leadership leaves employees alienated and demoralized.

Engaged employees are energized, proud and enthusiastic, and have positive attitudes at work. Companies whose employees are engaged show higher returns on assets, are more profitable and yield nearly twice the value to their shareholders compared to companies characterized by low employee engagement. Disengagement, on the other hand, results in an estimated $300 billion in lost productivity in the United States each year.

The bottom line? Leadership creates engagement, and higher employee engagement equals better organizational performance.

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