Leadership Character & the Bottom Line- A Comment on SMD Research by the Turknett Leadership Group

Last month we discussed the goal of our recent research – to assess how often each of the most commonly measured employee attitudes was found to be a statistically significant driver of business outcomes – and we highlighted the reaction of John Sumser of HR Examiner. This month’s post provides the perspective of Turknett Leadership Group.

Turknett Leadership Group, founded in 1987, has assessed and coached senior leaders since the dark ages – at least long before the term “executive coaching” became common parlance. They have seen the power of character in leadership anecdotally for years. And they’ve followed the research linking character and trust in leadership to the bottom line.

A few excerpts from their recent paper, “Leadership Character & the Bottom Line,” may be found below. The full version may be found here.

“They [SMD] have presented what may be the best evidence to date that character in leadership doesn’t just correlate with high profits – it drives them.”

“SMD just completed a study looking at employee surveys in their database for which they had solid outcome measures – nearly 30 companies and over half a million employees. The results were astounding. The Engagement scale (category) on the surveys was a key driver of only one outcome in over four organizations – that outcome was Voluntary Turnover. Engagement drove outcomes only 28% of the time – other drivers were much more powerful.”

“And here’s the highlight for us – the two survey categories that drove financial performance in the most organizations were two that are near and dear to us – Management and Senior Management.”

“For Senior Management the most powerful questions – those most predictive of bottom line results – were: “Senior management’s actions support this organization’s mission and values” and “I have confidence in senior management’s leadership.” Integrity can be defined as the match between values and behavior. People in organizations are watching senior leaders and looking for that match. There may not simply be a “return on character” – it’s likely essential for sustained success.”

“In the Management category the most predictive and powerful items on the scale were “The person I report to creates an environment of trust” and “I receive useful feedback from the person to whom I report.” Trust in leadership is essential at all levels.”

“Engagement may be a good measure to track – along with financial performance, quality, customer sat, and turnover – but it may be more of an outcome measure than a driver of outcomes. We heard someone say years ago – we’ve attributed it to Ken Blanchard – that you wouldn’t play tennis looking at the scoreboard – you have to watch the ball. SMD would advise you that Engagement may be, like financial performance, a good scoreboard, but it’s not the ball.”

“SMD helps you find the balls – the specific drivers of performance – in your organization. But this research tells us that those balls are much more likely to be senior management, management at all levels, and job fit.”

As we mentioned last month, there is no silver bullet that works for every organization. Each organization should use analytics to determine which aspects of their employee experiences are most critical to their business outcomes. SMD, with its patented technology SMD Link is here to help you impact the bottom line via analytics.


Turknett logoTurknett Leadership GroupTurknett Leadership Group (TLG): With over 25 years’ experience, we are the premiere resource for Character-based and Business-focused Leadership and Organization Development. We provide services such as Executive Coaching, Culture Assessment and Change, Selection Assessments, Succession Planning, Surveys, Talent Management, and Leadership Development. Through an approach grounded in science and guided by the Leadership Character Model™, TLG has built a reputation for results and client satisfaction by helping organizations hire the best people, identify and develop high potentials, and create high performing ethical cultures for long term business success. Learn more at www.turknett.com.

Carolyn Turknett is co-founder and President of Turknett Leadership Group, an Atlanta-based consulting firm providing leadership and organization development services to companies in a variety of industries. She has more than 20 years of experience in management and leadership consulting. The focus of her work is character in leadership, organization assessment and change, women in leadership, and executive team development. Ms Turknett was named the “2015 Woman of Purpose” at United Way of Greater Atlanta’s Leading a Life of Purpose event. She was also selected as a recipient of the 2015 “Women Who Mean Business Award” by the Atlanta Business Chronicle’s program to honor Atlanta’s most influential business women who’ve made a difference in their communities, blazed a trail for others, and are leaving an incredible mark on business in Atlanta.

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