Outcomes Follow Leadership Styles
Blog: Jim Sinur
While the overall behaviors of organizations are influenced by history, business models, and organizational culture, the leadership style has a significant influence on current outcomes. If a particular leadership style persists through generations of CEOs, it can have a make or break impact on the organization itself over the long run. There is a strong tie between the successful background of the CEO and the outcomes. Often leadership styles emanate from where the CEO grew up in organizations. Let’s dive into some of the typical tributaries for CEOs and what influence their upbringing has on outcomes both short and potentially long-term. The skills honed in these contributing departments get magnified when put at the top of an organization.
If a leader comes from the investment side of an organization, they are likely to be focused on what part of the organization should be grown or invested in to take the organization to the next level. Outcomes will be focused on balanced growth in a portfolio mindset looking for rates of return for each investment with careful maintenance and growth for long-term success. There will be an emphasis on planning. The weakness here would be keeping an eye on short-term results and letting things go too long.
If a leader comes from the finance arm of an organization, they are focused on short-term results. Often there is an emphasis on cost-cutting efforts. It is all about the numbers and short-term key performance indicators. They are at their best during downturns, but they often tend to forget the employees and customers. Often they are called “bean counters” If left to their own devices, they can negatively affect culture, loyalty, and business model over the long term.
Leaders that bring operational excellence in their bag of tricks are looking to optimize the organization so that it works well and in unison. Things that are out of order and not optimized will be targeted for improvement with this style of leadership. There is an emphasis on collaboration and teamwork under this brand of leadership. The weakness may be forgetting the top line and the necessary changes that new trends might require. This is a smooth operation that hates any change to operational excellence.
Sales and Marketing:
Leaders from this bolt of cloth want growth therefore they will sell the dickens out of what they already have on the shelves. They are great at setting goals for growth and incenting the sales staff to move products as fast as possible. They have a blind spot to the cost of sales and are not great at wanting or defining new products or services. There is a make product faster mentality, so we can sell faster. Operational excellence and governance can be overlooked in order to sell more.
Leaders that emanate from digital-focused disciplines can bring some new approaches to doing business and out-flanking the competition with a better approach. The problem with these “gee-whiz kids” is sometimes they have technologies looking for business justification without regard to the overall impact on the business and the value chains organizations thrive in.
The key skill is to produce products as fast and efficiently as possible within cost constraints. It’s about keeping the machines and people at the highest level of productivity. It’s all about units produced and lack of downtime. There is an emphasis on preventative maintenance and the kind of smoothness that an operations executive deems valuable. The weakness is here is that there are blinders on for new products and customer satisfaction with the units produced.
This is all about the customer experience and keeping them happy no matter the cost. While we all know the highest cost to a company is gaining and maintaining a customer. The issue here is that loyalty can come at a cost, particularly when customers get unreasonable and too demanding. They all can’t have their way,
Research & Development:
This is about creating new products and services. The emphasis is on innovation and creating a better mousetrap. These folks are viewed as “play babies” without any accountability for costs or applicability to the markets that an organization wants to reach and dominate. They are often at odds with marketing, so marketing tries to dictate the products or stifle creativity.
HR is at the center of people’s conflict and is often stuck trying to resolve differences and problems. While this a great skill, HR often coddles people too much. We all know that HR is invaluable for managing our most expensive resource, but they are not always focused on the bottom line.
Legal tries to make sure the organization is protected and stays within governance tolerances, however, they tend to be overprotective and almost paranoid. They tend not to take risks and tend to be excellent negotiators. While necessary, they create a somewhat cold atmosphere.
The obvious answer is to have a leader that fits the need for the time and culture while realizing the strengths and weaknesses that each department brings without pitting them against each other. We don’t want our leaders to forget where they came from. however, we want them to develop an atmosphere of collaboration and accomplishment. Balance is the keyword over the long haul.