What Really Drives Organizational Outcome

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Forget high salaries and astronomical bonuses. Forget super expensive experts. The secret to outstanding Organizational performance can be right in front of you.

It is all about  managers & leaders!

Yes, even though processes improvement and new technologies helps increase efficiency, productivity and outcome, nothing is more powerful than effective managers and leaders in house in order to provide improvements, quality and productivity for the Organization. That’s what I call “Effective Manager Effect”.

Considering leadership as a positive influence on the team member, estimulating him to challenge himself, to be more productive, and to work committed in order to achieve the goals, we can say that effective managers & leaders are the key-factors that drives the Organizational outcome up.

My experience showed me a lot of examples. Once, in an automotive industry, one assembly worker has found a different bolt in a bin. The difference was really subtle, it had same size and shape, but different aspect of surface treatment. This bolt has passed through the supplier quality delivery procedures, trough our warehouse receiving inspection, quality inspection, but not through the assembly line worker. Guess where we had a great leader working? Yes, in the assembly line.

Studies shows correlation between effective leadership and organization outcome!

The study “Leadership and Teamwork: The Effects of Leadership and Job Satisfaction on Team Citizenship” (Seokhwa Yun-Seoul National University, Jonathan Cox-Houston, TX, Henry P. Sims, Jr. & Sabrina Salam-University of Maryland) has been conducted using the five archetypes of leadership: aversive Leadership (leaders uses aversive methods such as reprimand or intimidation), directive leadership (leaders take decisions, give commands and expect employess to carry out the decisions), transactional leadership (leaders engage in exchange relationships with employees by negotiating and strategically supplying rewards in return for achievement of goals), transformational leadership (leaders inspire, stimulate, motivate and challenge employees), empowering leadership (leaders promotes self-influence and self-management). The results suggested that transformational and empowering leadership are the most effective types for the guidance of teams, the other leadership styles either had no significant effects (directive and transactional leadership) or a negative effect (aversive leadership), and the research supports the notion that both transformational and empowering leadership can enhance teamwork through the influence of job satisfaction.

Another study called “The Effect of Leadership Styles on Organizational Performance at State Corporations in Kenya” ( Peris M. Koech & Prof. G.S Namusonge)  was conducted in 30 state-owned corporations based in Mombasa, Kenya. This study extended to middle and senior managers, and has divided leadership in transformational (leaders encourage members to go beyond what they expected, feeling trust, admiration, loyalty, and respect toward leaders), transacional (leaders focus mainly on needs of employees, and the relationship is based on bargaining exchange or reward), and laissez-faire (leader does not intervene in the work affairs of subordinates, and avoid responsibilities). The results showed that correlations between the transformational leadership and organizational performance ratings were high, correlations between the transactional leadership and organizational performance were relatively low, and laissez-faire leadership style was not significantly correlated to organizational performance.

The study “Leadership behaviours: Effects on job satisfaction, productivity and organizational commitment” (Jennifer C F Loke-University of Hull-UK) conducted in health care Organizations in Singapure is a replication of a previous researches conducted in Seattle and Los Angeles. There were some differences in the samples and the settings, however, the results are similar to the original two studies: the employee outcomes like productivity, job satisfaction and organizational commitment had statistical correlation.

Another study, “How leadership matters: The effects of leaders’ alignment on strategy implementation” (Charles A. O’Reilly-Stanford University, David F. Caldwell-Santa Clara University, Jennifer A. Chatman-University of California, Margaret Lapiz-The Permanente Medical Group USA, William Self-University of California) conducted in a large health care organization that provides comprehensive health care to over one million plan members showed a highly significant interaction effect between effective leadership and performance of the employees.

The Hawthorne Effect is another important study conducted in Hawthorn Works company (Illinois), and says that people change or improve their behavior in response to their awareness of being observed. For managers/leaders is another clear message that good influence can drive to good results. Who has never felt that?

Effective Managers & Leaders is not the only way to improve Organizational outcome, but is the most powerful!

You probably have already thought about improving Organizational performance by recreating processes, or implementing new technologies, and that’s ok, but I would strongly recomend starting from the in house leadership, and the most effective way is top down, from the CEO to the shop floor leadership.

It is expected that an effective manager/leader build a trustful and respectful relationship with the team members, challenging them, and driving them to achievements. Other thing, very much important and expected from leadership is developing the team members, and if he has also a management responsibility, he has to replace (or address the issue to the next management level) the members that not show commitment, performance or results.

So, to do this job, is very much important to have a proper manager in the top position, because he will start working in cascade to evaluate and develop (training) the other managers and leaders, or replacing them if needed.

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