Better leadership and management leads to better business performance
It is intuitively obvious that better leadership and management leads to better business performance, but can it be proven?
There are numerous academic research studies that endeavour show this and some are summarised below. For most pragmatic business leaders, it simply has to be a judgement call. Which is why we invite potential members to attend a meeting as our guest. They are then properly informed and can make that judgement call for themselves.
“Management quality seems to matter a lot. It’s very closely correlated with labour productivity, and labour productivity is, in the long run, about as important a number as exists in an economy. It explains why a typical Tanzanian worker producers in a month what an American worker producers in a day, even given the same equipment. We can’t prove that better management is responsible for the entire gap, but it seems highly likely to be part of the story.”
The Undercover Economist – Tim Harford
“When we first started out, the top of the Olympic podium seemed like a very long way away. Aiming for gold was too daunting. As an MBA, I had become fascinated with Kaizen and other process-improvement techniques. It struck me that we should think small, not big, and adopt a philosophy of continuous improvement through the aggregation of marginal gains. Forget about perfection; focus on progression, and compound the improvements.”
How 1% Performance Improvements Led to Olympic Gold
Harvard Business Review interview with David Brailsford
The following are some largely academic papers exploring the extent to which leadership impacts upon business performance. Click the links for the original papers.
Harvard Business Review: CEOs need mentors too
(What better mentors could you have than fellow real leaders, like you dealing with the ups and downs of business life?)
Deloitte reported in the Wall Street Journal that investment analysts routinely factor the quality of a company’s senior leadership team into their valuations and that effective senior leadership can add 15 percent to a company’s value.
Economists have consistently found both large and persistent differences in productivity. The size of these differences is striking: the plant at the 90th percentile of the industry’s productivity distribution typically obtains almost twice as much output with the same measured inputs as the plant at the 10th percentile of productivity.
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To those who wish to learn with and from fellow business leaders, we extend an invitation to attend a MD2MD meeting as our guest. This is an opportunity to start fruitful relationships, enjoy useful conversations, and gain valuable business insights.