Leaders are the foundations of both successful and unsuccessful businesses.
They are the cause (in the majority of situations) of the failure and success attained by and through the people within these enterprises. As we perceive issues from diverse perspectives, the function of a leader is sometimes undervalued or overstated.
Companies must profit, according to Solomon Sisay, CEO of Adwa Technologies. Otherwise, they will cease to exist. But the question is, at what cost?
Sisay, from his wealth of leadership experience as well as observations of leaders in various sectors and businesses around the world, sees two types of leadership at work: profit-driven leadership culture-driven leadership.
’’Profit-driven leaders are always concerned with how much profit they will gain from their activities.” Their primary focus is their financial well-being, as well as the financial well-being of the organisation.”
Culture is something in which these types of leaders are willing to invest as long as it has a direct link to profit. And profit is usually calculated in financial terms (revenue).
The profit-driven CEO is constantly on the lookout for what will benefit the organisation. How the company saves money. How to generate financial revenue and maintain profit.
However, Sisay emphasised that while such leadership may bring short success (financially), it is doomed to fail in a few areas in the long run.
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The organisation will fail to unify its personnel around its vision because individuals are self centered (as they learnt from the boss), short-sighted, and continually looking for what will be better than this one.
Because everything is centred around generating or saving money, the company will also fail to be innovative, and become disruptive in its field.
Culture-driven leaders, on the other hand, are the second sort of leader in Sisay’s concept. Everything about the company, according to them, is ingrained in its culture. They are constantly working to create the ideal culture and atmosphere to attract people to join the culture’s development team.
They are incredibly detail-oriented because they understand that creating the appropriate culture necessitates it. They are the ones that frequently link seemingly unrelated dots, and their zeal makes them appear aggressive when it comes to avoiding anything that jeopardises the culture. These leaders are the architects of the organization’s long-term strategy to transcend time and space.
Culture-driven leaders invest in their people, in their skills, and in creating a setting that people find distinctive and conducive to being human beings with the need to be respected and recognised.
They prioritise culture building over everything else. Their perspective on running their businesses is rooted in their notion that a company is a collective product of how well its people perform on a daily basis. They are in charge of building, fostering, and enhancing the culture while always attempting to involve everyone in the firm.
They are always close to their employees, learning and understanding their needs while working to perfect communication channels, procedures in which their people assume varied roles, pioneering activities that establish strong habits, and learning from the process.
There are few companies that have executives who are culture-driven, but there are plenty that are profit- driven. The world, on the other hand, has shown us that the greatest firms that exist today are founded by culture-driven executives.
They have been able to cultivate and maintain an environment in which talented people would do anything to join and stay because of them. If you ask the greatest people who have stayed in these successful firms, they will tell you that they are there because their leaders believed in them and developed them, taking all risks and investing in them.
A Case Study of How Leadership makes a firm prosperous
Tony Elumelu is the Chairman of the United Bank for Africa (UBA), a pan-African financial services firm that operates in 20 African nations, the United Kingdom, France, and the United Arab Emirates, and is the only African bank with a commercial deposit taking presence in the United States.
UBA serves over 35 million customers worldwide with corporate, commercial, SME, and consumer banking services.
Elumelu also serves as the chairman of Transcorp, Nigeria’s largest publicly traded conglomerate, whose companies include Transcorp Power, one of the country’s main electricity providers, and Transcorp Hotels Pic, the country’s premier hospitality brand. He is the Founder and Chairman of Heirs Oil & Gas, a Nigerian upstream oil and gas company with assets including Nigerian oil block OML17, which has a current production capacity of 50,000 barrels of oil equivalent per day and 2P reserves of 1.2 billion barrels of oil equivalent, with an additional 1 billion barrels of oil equivalent resources of further exploration potential. Heirs Oil & Gas is dedicated to adding value to the African continent through resource extraction.
This example clearly demonstrates that organisations may only exist and bloom because of the leader.
Qualities of a leader that can boost the company’s revenues
Culture Of Leadership And Engagement
A company’s culture arises from shared beliefs and essential attitudes developed through business experience and leadership attitudes.
Leaders with the correct business vision can communicate their ideas to their teams. As a result, each employee will follow the defined behaviour culture and earnings will rise. Furthermore, mimicking the leader’s behaviour will drive the team to acquire the same expertise.
Hence, leaders must communicate properly with their people, manage culture, and coordinate plans to increase the company’s revenue.
Customer Retention and Leadership
The capacity to serve and retain a client well – a person with a strong character who can greatly impact the level of services offered – is the major aspect that assures good profitability in business and a stable income. Leaders create and manage business strategy, customer collaboration, command and control communication, product delivery, and good outcomes.
Customer retention is a company-wide strategic priority. The goals and plans for interacting with existing clients are created precisely at the level of the leader. These responsibilities are then assigned to the sales or marketing department and are specified down to the level of particular actions: when, when, with whom, how frequently, and on what subjects the employee should contact existing clients.
Compromises and Leadership
The third factor that boosts earnings is the company’s capacity to identify concessions, solutions, and agree on all issues between employees or consumers. In your opinion, when does a firm become profitable? While you are contemplating, we will pull back the curtain – the company is most successful when everyone is happy with the atmosphere, and the team works well together.
Employees foster a chaotic environment consisting of misconceptions, understatements, and unclear work expectations when there is no leader on the team. Conflicting aims, a lack of a strong leader, and the encouragement of insecure work all undermine the company’s culture and send it to the bottom.
Employees will not listen to one other’s perspectives in contentious situations since they are on equal footing and believe their thoughts are superior to those of others. The leader, on the other hand, assists the organisation in reaching strategically right, coordinated, and logical agreements among all team members. By nature, the leader seeks a way out of a dilemma, makes concessions, and suggests ways to keep a healthy team atmosphere.
The leader is always superior to his subordinates, and they respect him. In turn, the leader will listen to the ideas of the team and reason in a way that benefits the firm.
As a result, a team spirit develops, as do common goals and an understanding that no employee will be overlooked. Employees are easily persuaded by occurrences that contradict their beliefs because they believe that the decision of a leader would benefit the organisation. As a result, a well-coordinated team is essential for success and high profits.
Forbes’ Research: Leaders Can double profits
Good leaders generate more economic value than bad leaders, and exceptional leaders generate far more value than good leaders. Few investments, clearly, will pay off as handsomely as the decision to build excellent leaders within your firm.
To some extent, the link between leadership and the bottom line has been established. However, the majority of evidence on this topic comes from the personal writings of prominent and successful executives. While interesting, the various perspectives on leadership’s involvement in profit creation are insufficient and often inconsistent.
As a result, Forbes gathered information to back up the bold claim that leaders, both good and poor, have a direct impact on an organization’s bottom line or revenue base.
In the research report, a large database of around 500,000 feedback instruments (usually known as 360- degree feedback reports) pertaining to approximately 50,000 managers was evaluated. The theory was simple: if you want to know how good a leader is, ask people who are led what they think.
“We obtained solid evidence of the huge influence of leadership performance on net income through a study of these reports commissioned by a subsidiary of a Fortune 500 commercial bank,” the report read in part.
The Forbes study began with a 360-degree assessment of the leadership abilities that create a quantitative difference in a leader’s performance.
The leaders were then separated into three groups: the top 10% were the best, the bottom 10% were the worst, and the middle 80% were the rest. This split highlighted the tremendous difference between mediocre and outstanding leaders and helped us comprehend the impact of leadership at its peak.
In short, bad leaders lost money, good leaders made money, and remarkable leaders more than doubled the company’s profits over the other 90%!
In reaction to this astounding data, the prevailing consensus is that remarkable leadership can be formed. Yes, we can build leaders that motivate people to perform at a greater level, increasing corporate productivity and revenues.
In addition, the report revealed that many firms have seen constant increases in productivity as a direct result of their leadership development activities. For example, General Electric once achieved a 5% annual increase in staff productivity at a time when many firms were only seeing 1 % or 2% productivity gains.
Organizations must adopt a leadership development model that identifies the right capabilities to make a difference and apply development approaches that actually work to realise significant increases and sustain these gains over time.
To influence leadership effectiveness in a way that affects organisational profit, trendy leadership programmes that fail to focus on the behaviours that matter most must be avoided.
According to the Business Development Bank of Canada (BDC), an organisation that provides funding and advice to small and medium-sized businesses in all industries and stages of development, there are some successful leadership behaviours that are required to create a culture of continuous improvement in your business. You might want to utilise this list to rapidly discover your own leadership style.
- Know exactly where you want to take our company and communicate this idea to team members on a daily basis.
- Spend time on the floor every day interacting with team members.
- Spend enough time recruiting personnel and mentoring them to become tomorrow’s leaders.
- Avoid preaching and instead use questions to get team members to think on their behaviour when mentoring (the Socratic method of teaching).
- Maintain current knowledge in your profession and share it with team members. Not who failed, but where you failed in the process.
- Instead of financial results, use operational measures to assess the efficiency of your procedures.
- When it comes to organisational values, you must ’’walk the walk” every day.
- Listen more than you speak and ponder before you speak.
See issues as chances for your team to improve, not as a burden to be borne.
