Executive Guidance for 2010: Confronting Six Enemies of Post-Recession Performance

Many organizations have responded to the financial downturn by focusing on improving the quality of the leadership bench. No wonder—the difference between high-performing leaders and low-performing leaders significantly impacts on team and overall corporate performance. Teams led by the best leaders were 30% less likely to turn over, and worked 26% harder than teams led by the worst leaders. Where are all the good leaders? They are right inside your company. The problem is that most companies have the right talent buried in the wrong places and stymied by significant organizational constraints:

• Many leaders are unable to adapt to changing situations. Different market situations require different competencies. To enable success, companies must assign leaders to roles based on the identified competencies needed in the current markets. Proper allocation of leadership talent can improve a company’s ability to outperform on revenue outcomes by as much as 31%.
• Capable leaders may still face structural, resource, cultural, process, and interface barriers. As much as 40% of leadership performance is hindered by organizational barriers including lack of role clarity, poor goal alignment, and weak knowledge transfer systems. For example, clarity about empowerment can improve leaders' ability to outperform against their objectives (revenue, profit, budget, service delivery) by as much as 9%. Performance requires an effective leader and an effective organization.

Confronting the Enemy

• Remove all barriers to leadership performance—both soft and hard.
• Clarify leadership roles and accountabilities.
• Deploy leaders with the right capabilities against current and future needs.
• Continuously analyze which leadership capabilities should be leveraged in each critical area.