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Leadership Benefits: Self-Awareness and ROI

CoachStation: Self-awareness and Leadership Development

Does self-awareness and an understanding of leadership impact really matter to organisations?

CoachStation: Self-awareness and Leadership Development

Nearly all managers and people in leadership roles believe they make a difference. In some cases, this is true. In reality however, the evidence continues to demonstrate that leaders overstate their value and influence.
One of the core traits observed in the best leaders I have worked with is self-awareness. This is tightly linked to a willingness to be honest with themselves as well as others. There are also points such as decision making beliefs and biases that influence our position on many topics. Our actions are also reinforced by these biases. All the more reason to take a strong position that as a leader it is important to regularly review your own performance as well as that of your team members. We overstate our performance across many fields, so anything that provides a more frank and balanced sense of self is valuable.

  • In a survey of college professors, 94% said they did above average work.
  • In a survey of corporate CEO’s, a whopping 92% said they were the only person who could do their job effectively. By the way, more than 50% of those corporations were losing money.
  • In an M&A involving a flailing target, the average firms pays 40+% more for the target acquisition than the current stock price. Why? Because the acquiring execs believe that they can run the acquisition more profitably. (1)

As an example, I have seen the challenge of holding yourself accountable as a leader when participating in performance appraisal calibration sessions within several organisations.
Dilbert: Honest Leadership Assessment
The discussion is often about what employees have not achieved or the reasons why they will be ‘marked down’. There are two strong points of failures with this:

  1. The disappointing attitude of some leaders that the employee underperformance is a surprise. If the leader acknowledges that an individual has underperformed, then they should be prepared to look at themselves and the failure to have made a difference for/with that person over the past 6-12 months. If it is not the leader’s responsibility to manage this, whose is it?
  2. The focus on the 10-20% of what an employee is not achieving is out of proportion with the discussion of the 80-90% of what is working well. In my experience, the vast majority of these type of discussions focus on what is isn’t, not what it is. This is particularly disheartening if there is little support and coaching provided to to turn this situation around throughout the period. I have been in situations where I have held underperforming employees accountable to the point of terminating employment after much effort to turn them around. Afterwards, during performance calibration sessions I have had other managers state that the decision to terminate is a good one as the employee has been a poor performer for years! My response will always be, “why had nothing been done about it then?” I hope you can see the irony in leadership statements such as this.

Does leadership make that much of a difference to business outcomes and success? You bet! The effort and willingness to grow and develop as a leader is the only way that this benefit can be realised, however. There is ample evidence that those organisations who focus on developing their leadership group see the benefit in many ways beyond improved employee engagement.
Organisations with the strongest leaders have nearly double the revenue growth compared to those with weaker leaders. However, most leaders lack the full complement of skills to thrive in today’s rapidly changing environment…organisations must adjust their approach to leadership and develop leaders who are able to build and enable. In order for organisations to achieve higher growth, truly differentiate themselves from competitors and maintain an edge, they must set a higher bar for their leaders, requiring them to go beyond setting strategic direction and driving execution. (2)

One of the keys to knowing whether you truly add value as a leader is through measurement, both tangible and non-financial. A key question here is, are all aspects of business measurable?

Calculating business benefits is often a complex art. As anyone who has been involved in business cases can testify, investments in ‘tangibles’ e.g. IT infrastructure, marketing spend etc. are often difficult to quantify in terms of the real monetary value they deliver. So when we start to think about investments that deliver ‘intangible’ benefits such as changes in leadership behaviour, the waters get murkier still. In too many cases, the evaluation of Leadership Development Programmes is not properly planned or budgeted for. Rather, it is seen as a tag-on, something to be put together at the very end…work needs to have clearly defined, specific and measurable objectives. So start with the end in mind:

  • What is the desired outcome of the programme?
  • What does success look like?
  • And then the killer question…what are the business metrics that we want to see impacted by this piece of work? (3)
The main point here is to ensure that you have a clearly set expectation for every employee, team and leader. You cannot hold people accountable for something that you have not set standards and expectations for in the first place. Confirming that each person understands and has the opportunity to participate in developing these expectations is also important. When combined with honest self-appraisal and subsequent action the opportunity to influence and contribute to your organisation is increased significantly.

Even more importantly, the influence on and buy-in you will receive from your team members will encourage you to continue down this developmental path and feel the effort is worthwhile. The alternative is to stagnate and continue to do what you have always done. Is that the type of leader you want to be?


(1)  http://switchandshift.com/when-leaders-wear-rose-colored-business-glasses

(2) Inside HR – Strong Leaders Grow Revenues Twice As Fast, Issue 2, 2014: Pg 6
(3) http://www.ysc.com/our-thinking/article/measuring-the-roi-of-leadership-development

1 reply
  1. Raymond Huan says:

    Hmm, really good points, I think it is quite a challenging thing self-awareness, cause it takes a level of vulnerability and honesty which not a lot of people are willing to reach or go to.

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