The Role of Leadership for a Company’s Success

In the past three years, there has been a great deal of economic turmoil and societal unrest due to the corona pandemic, the war between Russia and Ukraine and, finally, the energy crisis. Companies and their executives are therefore faced with the task of re-positioning their business to master or even survive the upcoming challenges, which may still be unknown.

In these uncertain times that are hard to predict, planning is correspondingly more difficult. Existing decisions must repeatedly re-adjusted or even overturned. This requires the entire corporate organization to be flexible and constantly willing to change. Therefore, in addition to the strategic tasks, employee management is particularly important since managers, through their leadership behavior, have a major influence on the employees’ motivation and performance.

What role does leadership play in a company’s success?

“Bad leadership costs companies billions every year. Especially in a crisis, companies can afford this attitude less than ever.”
Marco Nink – Director of Research and Analytics EMEA at Gallup (2021)¹

A company expects more from its leaders than from other employees. The difference being primarily that managers assume greater responsibility (e.g. for achieving corporate goals, for their team members) and occupy more complex fields of activity. Their leadership task is to instate their employees according to their strengths and to enable, inspire and motivate them to (high) performance.

However, a manager can also cause considerable costs for a company, as “bad” leadership affects team members and, in the worst case, leads to terminations (by the manager or by team members).

Communication and empathy are therefore necessary key leadership and management skills (power skills²). Open, transparent, and honest communication (while considering the company’s interests) is the foundation for successful leadership. Empathetic personalities are particularly good in adapting to others.

What requirements result from the change in the working environment?

The terms New Work or Agile Work, which describe an increasingly digitized, flexible way of working, have accompanied us for several years. The corona pandemic and its associated challenges have further accelerated the change in working environments and operational processes (e.g. nationwide introduction of remote work, flexible time / shift models, etc.).

Management structures had to adapt to the new circumstances overnight and, at the same time, employee expectations have changed. The desire for more freedom keeps growing: flexible working hours, increased autonomy, work-life balance / work-life blending and mobile work are just a few of the demands that employers have to deal with today. Not least because these factors often determine whether an employee remains in the company or takes a decision for / against an employer.

Companies therefore must rethink their culture; managers must readjust their leadership style and the methods used: What does effective and successful leadership look like when working remote How can I create a sense of belonging, involve employees, and ensure continuous exchange despite physical distance? How do I ensure quality of work?

The essential precondition for leadership in the new working world is an elevated level of trust in all team members and transfer of accountability, e.g. for the organization of working hours or the autonomous prioritization of tasks, as well as functioning communication, for example via periodic online meetings (e.g. MS Teams, Zoom) or the use of digital real-time channels (e.g. chats).

What makes for “good” leadership in a crisis?

Every manager finds himself caught between the employer’s interests as well as the employee’s wishes. Balancing both sides is a major challenge for the leader as a personality as well as a precondition for the success of the company.

There is no recipe and no single method for the right, the one leadership style – neither in times of crisis nor in supposedly “calm waters”. But especially in uncertain times like these, the topic of leadership is gaining importance. The authentic, individually persuasive personality is in demand. Strategic thinking and acting, emotional strength without loss of control, empathy, motivational discourse, delegating responsibility, moderate trust, the willingness to take calculated risks and promoting change are some of the desired or rather required leadership skills that play a key role in determining whether a company can recruit and retain the “right” employees.

How can one find the „right” leader?

In addition to the targeted promotion, training, and development of your own junior staff as well as established employees, managers can be recruited by searching on the external job market, e.g. to bring fresh perspectives and working methods into the company. As headhunters, we can provide targeted support to companies in finding and recruiting the “right” executives with whom they can positively change and successfully shape their future.

¹ Translated by the author
² Power skills are core competencies, oftentimes soft skills that enable people to be successful and that can be applied across industries and occupations.

Article written by Mientje Krüger and Svenja Schütz, CFR Global Executive Search Germany
Photo source: Pexels


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