Leadership Trumps Strategy

Creating a great culture is a key responsibility of leadership. When you invest in building a strong culture, the business and financial results follow. Fail to do so and your business will end up in unpleasant situations.

Great leaders drive excellence in their organizations. They lay the foundation, set the tone, and prove the catalyst for long-term bottom line success no matter the size of a company, the industry, or external economics.

These leaders’ secret to success isn’t their strategies. It’s the pervasive cultures they create at their companies with positive values-based attitudes, real actions, and strong commitment. In turn, their teams are energized and so are their bottom lines, in good economic times and bad.

This connection between leadership and success isn’t abstract. Concrete results of stellar leadership include better productivity, less staff turnover, greater achievement of potential, better customer satisfaction, and better bottom lines.

The proof is in the numbers. A report from the Society for Human Resource (SHRM) Foundation found that companies with outstanding leadership have:
• 50-percent less staff turnover
• 10- to 30-percent higher customer satisfaction ratings
• 40-percent higher employee commitment ratings
• Double the net profit vs. their peers

Studies from other reputable organizations—including The Hay Group, Ken Blanchard Companies, Aon Hewitt, and CEB—found similarly positive links between stellar leadership and company successes.

The proof, too, is in the stories of extraordinary leaders whose winning approaches have helped them build successful companies.

University standout

Nido R. Qubein, Ph.D., came to the United States as a teenager who couldn’t speak English. Today he is president of North Carolina’s High Point University, chairman of the Great Harvest Bread Co., and a motivational speaker, entrepreneur, and author.

When Qubein took over High Point University, it had 1,000 students. Today, a decade and more than $225 million in donations to the university later, High Point has approximately 4,300 students on two campuses. Since 2013, it has ranked as the top regional college (South) by U.S. News and World Report.

Winning small business

Dan Michelson knew the importance of strong leadership and a values-based culture when he took the helm of Strata Decision Technology, a Chicago-based financial and analytical software developer.

As former chief marketing and strategy officer for Allscripts Healthcare Solutions Inc., Michelson helped grow that company from 100 employees to more than 7,000, and boost revenues from $26 million to more than $1.4 billion.

His leadership has netted success at Strata Decision, too. The once-struggling company was named to Inc. Magazine’s list of the 5,000 fastest growing private companies in 2013 and 2014.

High-tech leader

Lars Bjork is CEO of Qlik, one of the fastest-growing technology companies in the world with more than 2,300 employees in 30 countries. He’s also passionate about the positive effect that the right leadership and culture can have on the bottom line. (Full disclosure: He’s also my boss. #greatleader)

Bjork has nailed it: leadership and culture. Happy employees equal happy customers equal happy finances, he says, and he’s right. The company has registered five consecutive quarters of record growth.

With that growth, Bjork was concerned about how to maintain open communications and the collaborative culture that he has always promoted.

To solve the scaling dilemma—a common challenge of growing companies—our teams strengthened communications programs. Leading by example, we added listening forums—small groups of people who join Bjork and me (I lead Qlik’s Culture and Talent team) to talk about what works and what needs improvement. Bjork also regularly holds all-hands meetings and discussions with managers worldwide.

As the company’s financial and people successes reflect, the approach works. Our teams are happy, attrition is low, and the company’s bottom line continues to improve.

Poor leadership main reason for exit

Unfortunately, not all companies and their leaders are as committed to transparency and excellence as the examples above. The number-one reason people exit companies is lack of solid leadership. A few all-too-common real-life examples include:
• Failure to invest in employees. A C-suite executive (it could be a small business owner too) claims it costs too much to properly train employees on new software. Team members instead must struggle with the software to their frustration and at the expense of helping their customers. The reality is that you can’t afford not to adequately train your teams and to provide them with opportunities for advancement and career development.
• Uncaring attitude toward others. A company refuses to give an employee time off to work with inner city youth through a local nonprofit volunteer education organization. The employee’s boss says, “Do it—but on your own time.” That snub of social responsibility comes at a price. Likely the associate won’t stay at this company much longer.
• Favoritism by a supervisor. A leader continually gravitates toward his buddies and their ideas as opposed to listening to, appreciating, and growing by creating a truly all-inclusive and collaborative working environment. However a company’s leadership comes up lacking, if unchanged, the outcome is the same—eventual loss of revenues and a lack of long-term success.

Great leadership is accountable and measurable

At the other end of the spectrum, great leaders take the time, make the effort, and understand the value-added nature of creating a culture that perpetuates inspiring and teaching others, setting goals, and owning solutions.

Across the board in any organization or industry, actions of great leaders include:
• Make a difference and achieve results. Social responsibility creates a positive force for your peers, the company, and the community no matter external economics. Plus, when a leader models the behavior, others follow.
• Clients and others come first. That means always doing the right thing, which isn’t always the easiest thing to do.
• Regularly communicate openly, honestly, and without negative repercussions. Success, after all, is a team effort.
• Develop  and reward teams as a part of overall accountability. Accountability extends to everyone, including the leadership team.
• Aim for innovation in everything the company does. Focus on innovative ideas, processes, and actions, and on the future. No matter how successful a company may be, the status quo is not enough to guarantee future success.

Whatever your company, its size, or industry, if its leaders model these positive behaviors and build them into everything the company does, it will transform the organization.

First published Dec. 7, 2015, on thoughtLEADERS LLC.

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