Results-Based Leadership

1. Leadership effectiveness = attributes x results

Effective leadership = attributes x results.

Leadership paradox. Many leaders focus solely on developing attributes - who they are, what they know, and what they do. However, attributes without results are ineffective. Conversely, results without the right attributes are unsustainable. The key is to connect attributes to results and results to attributes.

Balancing act. Leaders must strive for excellence in both attributes and results. This equation suggests that a low score in either attributes or results will considerably lessen overall leadership effectiveness. For example, a score of 9 out of 10 in attributes multiplied by a score of 2 out of 10 on results yields an effectiveness rating of only 18 out of 100.

Shift in focus. To improve leadership quality, there needs to be a shift from an exclusive focus on attributes to a balanced approach that includes results. This requires leaders to:

• Define clear, measurable results they aim to achieve
• Identify the specific attributes needed to deliver those results
• Continuously refine and develop both attributes and results

2. Desired results must be balanced, strategic, lasting, and selfless

Desired results are balanced. They don't build success in one dimension by ignoring (or tolerating failure in) another.

Four criteria for results. Effective leaders focus on results that are:

1. Balanced: Serve multiple constituents (employees, organization, customers, investors)
2. Strategic: Align with and contribute to the organization's strategy and competitive advantage
3. Lasting: Endure over time, balancing short-term and long-term goals
4. Selfless: Benefit the larger whole, not just personal or group interests

Stakeholder balance. Leaders must balance results across four key stakeholders:

• Employees: Building human capital through capability and commitment
• Organization: Developing organizational capabilities
• Customers: Creating firm equity and customer loyalty
• Investors: Generating shareholder value

Strategic alignment. Results should be tied to the organization's strategy, focusing on:

• Business focus (e.g., product, customer, technology)
• Customer value proposition (e.g., low cost, quality, speed, service, innovation)

3. Employee results: Investing in human capital

Human capital = employee capability x employee commitment.

Defining human capital. Human capital represents the collective knowledge, skills, abilities, and commitment of employees. It's one of the few assets that can appreciate over time and is increasingly crucial in the knowledge-based economy.

Building employee capability. Leaders can enhance employee capability through six strategies:

1. Buy: Recruit new talent
2. Build: Invest in training and development
3. Benchmark: Learn from other organizations
4. Borrow: Partner with external experts
5. Bounce: Remove underperforming individuals
6. Bind: Retain top talent

Fostering employee commitment. Leaders can increase commitment by customizing the employee experience across five dimensions:

1. Work arrangements: Flexibility in where, when, and how work is done
2. Work impact: Allowing employees to see the results of their efforts
3. Growth opportunities: Providing challenging assignments and learning experiences
4. Rewards: Offering meaningful recognition and compensation
5. Community: Building strong relationships within the organization

4. Organization results: Creating capabilities

Capabilities must offer integration; capabilities mean not individual competence or management systems, but an organizationwide commitment.

Shift in organizational focus. Leaders must move beyond viewing organizations as mere structures or systems. Instead, they should focus on developing organizational capabilities - the collective skills, processes, and abilities that enable a company to compete effectively.

Four critical capabilities. Successful organizations often focus on developing four key capabilities:

1. Learning: Ability to generate and leverage knowledge
2. Speed: Capacity for change, agility, and quick response
3. Boundarylessness: Collaboration across internal and external boundaries
4. Accountability: Discipline and ownership in achieving results

Developing capabilities. Leaders can build these capabilities by:

• Aligning capabilities with strategy
• Measuring and improving each capability
• Integrating capabilities into management practices
• Creating a culture that reinforces desired capabilities

5. Customer results: Building firm equity

Firm equity results from successfully executing a business strategy that integrates product brands into the cohesive whole known as culture.

Beyond brand equity. Firm equity goes beyond product brand value to encompass the overall value customers place on doing business with the company. It represents the identity of the firm in the minds of customers.

Customer segmentation and customization. To build firm equity, leaders must:

1. Identify target customers through segmentation
2. Customize offerings and experiences for these customers
3. Develop a clear value proposition (e.g., low cost, quality, speed, service, innovation)

Building customer connections. Leaders can increase customer intimacy through:

• Direct customer interactions
• Involving customers in recruiting and employee development
• Including customers in reward systems
• Integrating customers into governance and decision-making processes

6. Investor results: Building shareholder value

Shareholder value in its simplest form means creating wealth for investors.

Three paths to shareholder value. Leaders can increase investor results by focusing on:

1. Costs: Reducing expenses and improving efficiency
2. Growth: Increasing revenues through geographic expansion, product innovation, or customer intimacy
3. Management equity: Enhancing the perceived quality of management

Leadership actions for investor results. Effective leaders:

• Understand their industry and competitive position
• Live within budgets and meet financial commitments
• Build performance management systems aligned with shareholder value
• Lead by example in cost management and growth initiatives
• Communicate transparently with investors
• Create a values-driven culture focused on results

Balancing stakeholder interests. While focusing on investor results, leaders must maintain a balance with employee, organization, and customer results to ensure sustainable long-term success.

7. Becoming a results-based leader

Constantly take action; results won't improve without it.

Shift in focus. To become a results-based leader, individuals must move beyond solely developing attributes to connecting those attributes with tangible outcomes. This requires:

• Clearly defining desired results in all four key areas (employee, organization, customer, investor)
• Taking personal responsibility for achieving those results
• Communicating expectations and targets to team members

Action-oriented approach. Results-based leaders:

• Experiment and innovate to find new ways to improve performance
• Measure the right standards and increase rigor in measurement
• Increase the pace and tempo of their group
• Seek feedback from others on ways to improve outcomes

Personal development. Leaders should engage in development activities that directly contribute to producing better results, such as:

• Job-related experiences and assignments
• Action learning projects tied to business goals
• Coaching and mentoring focused on results achievement
• Tailored skill training with clear connections to desired outcomes

8. Leaders building leaders

Leaders building leaders establish an environment favorable to risk taking and pushback, an environment in which employees do not feel afraid to raise alternative ideas and propose new ways of doing things.

Virtuous cycle of attributes and results. Effective leadership development connects attributes (who leaders are and what they know/do) with results. This creates a reinforcing cycle where:

• Attributes lead to results ("so that" statements)
• Results inform necessary attributes ("because of" statements)

Results-focused development. Leadership training and development should be reoriented to emphasize results:

• Training programs should start with defining required results
• Job assignments should provide experience across all four result areas
• Coaching and mentoring should focus on achieving specific outcomes
• Succession planning should evaluate candidates on their ability to deliver future results

Shared responsibility. Building the next generation of results-based leaders is a shared responsibility:

• Senior managers must model results-based leadership and invest in developing others
• Chief Learning Officers need to design integrated development experiences that emphasize results
• All leaders have an obligation to help define, achieve, and teach others about results-based leadership

Last updated: September 21, 2024