Great Leadership Can Drive Profits Even in a Bad Economy

As a serial entrepreneur my passion lies in helping business owners create and sustain profitable and successful businesses. In today’s uncertain economic environment it is essential that business leaders have the tools to navigate through the tough waters and help drive our economy to a more stable place.

More than ever before, each and every aspect of a business needs to be charging on all levels; sales, marketing, accounting/finance, operations, customer service, human resources, etc. However, the MOST important aspect of running a business and the one that truly drives the success is the Leadership.

FACT: It is the leader’s primary responsibility to create and sustain a healthy organizational climate. Studies show that a healthy organizational climate can impact employee productivity and bottom line profits by up to 30%; in addition, 70% of this variance is rooted in leadership performance.

So, what is Organizational Climate? Simply, the atmosphere of the workplace…how does it feel to work here? A healthy organizational climate creates what we call Discretionary Effort. This is when people work well beyond “compliance” (just doing what is on the job description, the tasks) and achieve their full potential – it is the difference between mediocrity and excellence. This requires tapping into and leveraging their greatest strengths and years of experiences.

Some key components to a healthy and motivating environment stem from clarity. Are the leaders communicating clearly the expectations, goals, standards and responsibilities? Are they fostering an environment of collaboration and innovation? Are there meaningful rewards and incentives in place? All of these components contribute to team commitment, loyalty and support - a feeling that people are proud to belong to an organization and work toward a common objective.

Yes, there are so many things working against business owners and leaders in these difficult times. Even with fewer resources, tighter margins, and little optimism in the world at large; as leaders we still have the ability to impact bottom line results by sustaining a healthy organizational climate. People want to be engaged, they want to know that they are making an impact.

A recent study by Hewitt Associates, a global consulting and outsourcing company, showed that top companies like IBM, Proctor & Gamble and General Mills all remain committed to developing strong leaders regardless of the economic conditions. http://www.hewittassociates.com

When it comes to Leadership, we do not see a huge distinction between small, medium or large organizations…people are people and they need to be inspired, motivated, recognized and challenged to perform at their best. When an organization embraces this concept, they will undeniably see better bottom line results.