Liz Hey | Principal Psychologist, Hogrefe Ltd
Leadership has been consistently identified as playing a critical role in the success or failure of organisations. Research has found that 45% of an organisation’s performance depends on the quality and effectiveness of its leadership team (Bass & Stogdill, 1990) and good leader development can result in a 23% increase in organisational performance (BIS, 2012). There is also a strong relationship between leadership styles and behaviours, and employees’ job satisfaction and work performance (Schriesheim & Neider, 1996). The human resource advantage of having a workforce that is engaged and happy and believes that the organisation’s leaders are acting in their best interests and are fair and honest, leads to lower turnover and higher employee satisfaction (Wang et al, 2014).
In a post-Covid world what will be most important at work? The majority of employees now expect more flexible working arrangements, allowing for a greater balance perhaps between work and life and a stronger focus on health and wellbeing. For organisations, there will be an increasing focus on work performance in a competitive world with diminishing resources. How then can these two be reconciled? Leaders must ensure that the workforce is performing at an optimum level for the success of the business and, at the same time, do as much as they can for employees to be happy and fulfilled at work.
The concept of leadership in organisations has developed continually over the past century and much has been written and researched about which leadership styles are most effective. So, what should we be looking at today in terms of impactful and successful leaders?
Classical theories of leadership, formed from the 1940s onwards, describe effective styles of leadership as charismatic, visionary and transformational, which depend on the symbolic, emotional and motivating behaviours of leaders. These theories are based on principles of the control and management of workers. As organisational and employee behaviour and expectations have changed over time, theory and research has focussed more on other styles such as servant, or contingent leadership – which depend on the situation and employees – or relational, which look at the nature and quality of relationships between leaders and followers (Gutterman, 2017). There are also authentic and ethical leadership styles, which focus on inherent positive traits of leaders and how these impact an organisation.
A 2021 McKinsey report highlighted what leaders needed to do to be successful, both during and after the pandemic. Leaders, the report stated, should be able to organise networks of teams, adopting less of a top-down approach, thus fostering a culture of collaboration and transparency. Leaders also need to create a climate of psychological safety, allowing for voices other than theirs to be heard without repercussions, and empowering people throughout the organisation to make decisions. And leaders should be able to demonstrate transparency and empathy to their employees.
Trust in leaders seems to be an increasingly prevalent theme both in research and in the media. We know from the events of the last few years, including economic crises, public health disasters and political scandals, that the consequence of a lack of trust in business and political leaders has serious ramifications for society. Trust is a fundamental trait of successful leaders and there is a need for a more ethical and people-centric approach to leadership. In a recent research study, the CIPD found that only 40% of employees in the UK reported that their leader behaves ethically, and a third rated both their leader’s ethical behaviour and the alignment of their own values with those of the organisation as low (CIPD, 2021).
In order for leaders to be effective, it seems important then to inhabit particular traits and behaviours, rather than relying on traditional, seemingly successful leadership approaches. Research suggests that no one style of leadership is better than another, and that the interplay of different approaches and styles is best for the organisation. Above all, the need for transparent, ethical and trustworthy attributes in leaders is highly desired.
We know how critical it is to identify good leaders from the start and to ensure, through regular monitoring and development, that leadership practices are still effective and working for the organisation.
Is leadership state or trait? Can good leadership be learned? Do bad leaders intend to be bad, or is it bad business decisions which lead to unethical behaviours or actions?
As we have seen, research would suggest that good leadership is underpinned by positive traits and good principles, as well as the ability to lead with conviction.
Trait measures include the NEO Personality Inventory, Third Edition UK (NEO-PI-3) which looks at the ‘bright side’ of personality, giving a comprehensive profile across the well-researched Big Five personality factors. The NEO’s Primary Colours Leadership report uses the strength of the NEO questionnaire to look at a specific leadership model. The Dark Triad of Personality at Work (TOP) looks at the ‘shadow side’ of personality and can help to identify potential derailing behaviours at work. The Business-Focused Inventory of Personality (BIP) combines an assessment of both work style and motivation, providing a useful insight into the impact of behaviour on other people, and makes for a rich source of information in a development setting.
State, or situational, tests such as the Leadership Judgement Indicator (LJI-2) can identify which strategies someone will choose to solve a series of work problems and give a clear sense of what leadership approach they would be likely to adopt in a senior role.
Investing in a considered approach to the leadership selection will help to mitigate the risk of poor business decisions and demotivated employees. In a continuing climate of uncertainty and volatility, it will be of critical importance to put the right people in charge, helping to promote a climate of stability and preparedness for further change.
Bass, B. & Stogdill, R. M. (1990). Handbook of Leadership: Theory, Research, and Managerial Applications (3rd ed.). New York: Free Press.
BIS, the Department for Business Innovation and Skills (2012) Leadership & Management in the UK – The Key to Sustainable Growth. © Crown copyright 2012. www.bis.gov.uk
Gutterman, A. (2017). Leadership: A Global Survey of Theory and Research. 10.13140/RG.2.2.35297.40808.
McKinsey (2020): https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/leadership-in-a-crisis-responding-to-the-coronavirus-outbreak-and-future-challenges (authors: Gemma D’Auria & Aaron De Smet)
Wang, H. U. I., Sui, Y., Luthans, F., Wang, D., & Wu, Y. (2014). Impact of authentic leadership on performance: Role of followers’ positive psychological capital and relational processes. Journal of Organizational Behavior, 35(1), 5–21.
Schriesheim, C. & Neider, L. (1996). Path-Goal Theory: The Long and Winding Road, Leadership Quarterly, 7, 317–321.