I spend a lot of my time helping leaders become better. But to be honest, research consistently shows that we overestimate the impact leaders have on organizational performance. Consider this recent leadership study showing that firm performance is mostly due to chance. (This study suggests only 30% of the variance in firm performance could be attributed to a particular CEO, though other studies I’ve seen peg it even lower, more like 10-14%.)
So, if the research is right, why invest in leadership development? If your organization’s success are largely out of your control, what does your leadership behavior matter? Here are 5 reasons to keep working at it.
1. Morality: Becoming a better leader means becoming a better person. More authentic, more trustworthy, more disciplined in your appetites, more dependable.
2. Altruism: Becoming a stronger leader helps others. If you become more skilled in coaching and delegating and communicating, you actually can help more people reach their own goals in life. If you care about the people you work with, you will want to become a more effective leader.
3. Resilience: Becoming more masterful and versatile as a leader can actually help you reduce the impact of stress. Psychological flow states happen when our skills are reasonably matched to the difficulty of the tasks. When we are more skilled, we experience less stress in challenging conditions and in turn we experience greater happiness and calm.
4. Narrative: When firm performance can be attributed to strong leadership, people assign even more positive evaluations of the firm’s value than if the performance is due to more random or external factors. In other words, you get disproportionate credit if your success is seen to be due to your gifted leadership, rather than market conditions.
5. Avoiding Disasters: There are lots of ways to get it wrong and send your team or firm off the cliff. Inexperienced or what Gautum Mukunda calls “unfiltered” leaders can either be geniuses (e.g., Steve Jobs or Lincoln) or disasters (Woodrow Wilson or Napoleon Bonaparte). “Filtered” leaders who are developed and vetted may not create sky-high successes, but they are also less likely to fail miserably. (That’s the basis for Mukinda’s compelling post in 2012 “Why boring political conventions are better. “ Worth another read especially as we prepare for the 2016 summer political season.)
So continue on the path of becoming a stronger leader, if not for your firm, for yourself and others.