By: Mostafa Sayyadi
How do great leaders separate themselves from the rest? This article will examine how several excellent leaders, including Rich Teerlink and Steve Jobs, were able to inspire their teams, develop incredible products, and transform their companies.
A good leader can turn a weak business plan into a success, but a poor leader can ruin even the best plan. One example of this comes from CEO Rich Teerlink, who dramatically transformed Harley-Davidson, and fundamentally built a different organization that still prospers today. The success of leadership at the Harley-Davidson Corporation has stood the test of time. Harley-Davidson’s leadership created a more effective organization built upon three primary principles: 1) focusing on people, 2) challenging norms, and 3) continuing to fundamentally change. At Harley, every employee can participate in leadership decision-making.
Another example of great leaders in a highly competitive business environment is Steve Jobs, former CEO of the Apple, who built a highly effective organization through taking a change-oriented leadership approach, which highly manifested itself in talent, product development, organizational structure, and intense marketing. He transformed Apple by attempting to change the basic values, beliefs, and attitudes of followers so that they were willing to perform beyond their previous or originally level specified by the organization in their job description. Also, Jobs contributed to new products and services to meet dynamic market needs, through higher expectations for new and strategic opportunities to meet the needs of customers in the marketplace. As a result, leadership, being the core of management, is crucial to company’s success—-both from a performance and management level.
The evidence from these examples suggests that leadership is highly demanding at the corporate level. For organizations to achieve a sustained change and eventually a higher degree of efficiency and effectiveness, selecting a CEO acting as a great leader is the key to success. In the absence of leadership, organizations lose their required direction to achieve a high degree of hypercompetitiveness, and cannot implement successful change in order to adapt with today’s global business environment.
Leaders know that financial aspects of firm performance include return on assets, return on sales, earnings per share, and stock price performance. Also, non-financial performance can be enhanced thorough aspects such as active response to environmental changes, production and service quality, customer focus, innovation, and providing learning and growth opportunities for employees. Armed with these two tools, leaders effectively increase firm performance.
As CEOs attempt to manage people they find that intellectual capital is the in the forefront of success—Bill Gates once mentioned that if he lost his top 50 people that he would not have an organization anymore. Leaders develop organizational communications aimed at providing valuable resources for all organizational members. They enhance knowledge sharing among intellectual capital and stipulate knowledge to be shared around the organization. Sharing the best practices and experiences could positively impact some aspects of non-financial performance such as innovation, providing learning and growth opportunities for employees. Empowered employees can enable organizations to actively respond to environmental changes, which can in turn enhance financial aspects of firm performance in terms of return on assets and return on sales.
The outcome is success which narrows the gap between success and failure and this can be achieved by the commitment of organizational members and facilitated by a CEO acting as a leader. Leaders identify employee’s needs and show concern for both organizational needs and follower’s interests concurrently. When leaders show concern for the employee’s individual needs, individuals begin to contribute more commitment and they become more inspired them to put extra effort into their work. This extra effort improves the quality of products, customer satisfaction, and impacts shareholder value and improves operational risk management.
Leaders also inspire employees through setting highly desired expectations. The higher level of desired expectations for employees can enhance productivity and perhaps decrease organizational costs. Thus, leaders positively affect firm performance through decreasing costs, improving innovation, increasing the rate of responses to environmental changes, improving the quality of products and services, and increasing sales and profitability.
In conclusion, this article highlights the vital importance of leadership in business area. Success in business can be more effective when leadership is applied to change attitudes and assumptions at the individual level and creating collective-interests for cultural adaptation. At the corporate level, great leaders make a fundamental change in the processes by which business organizations serve their clients.
About the Author
Mostafa Sayyadi works with senior business leaders to effectively develop innovation in companies, and helps companies—from start-ups to the Fortune 100—succeed by improving the effectiveness of their leaders. He is a business book author and a long-time contributor to business publications and his work has been featured in top-flight business publications.
Featured image via Unsplash.