Posted by Adaptable Leadership - Building Leaders for Changing Times on 8/14/2008

The Extraordinary Leader is an excellent book written by John Zenger and Joseph Folkman that outlines the impact of great leaders. The effect is so clear that I will take the next five posts to highlight the substantial results that they have on the organizations where they work. The difference that great leaders make is not just in warm fuzzy's. Great leaders make a difference in money. Tell me if I am wrong, but all companies are in it to make money.
Today let's look at how Leadership Effectiveness correlates with Net Profits: a critical factor for shareholders. The chart in this blog depicts the results from a study conducted at a mortgage bank.* The study found that the bottom 10% of leaders actually lost money for the company. The good leaders in the middle 80% made a healthy profit. However, the impact of the top 10% of leaders was extraordinary. The top leaders nearly doubled the impact on profits compared to the good leaders. This is a remarkable result that demonstrates the tangible difference extraordinary leaders have on the monetary gain for their company.
What would the impact be if more leaders moved to the top 10% of performers? The financial gain would far outweigh any investment in a good leadership development program. It is absolutely clear from this study that Leadership Effectiveness has a direct and positive impact on the net profits a company can produce. Make sure you are moving your leaders from good to great!
* The Extraordinary Leader