Developing leaders Featured

7:00pm EDT January 31, 2007

Good leaders are not always easy to find. Some are born with the traits necessary to provide outstanding leadership, while others have the capacity to learn the proper skills.

Healthy companies will learn to develop good leaders. Why? Because leadership development has tremendous impact on organizational performance, says Agustin V. Arbulu, associate professor of the DeVos Graduate School at Northwood University in Midland. Effective leadership, he says, leads to a positive work climate. And that leads to increased profitability.

Smart Business spoke with Arbulu about what companies can do to ensure they are developing good leaders.

Why is leadership development so important?

Leadership development is important because of its impact on organizational performance. After all, organizations are always seeking to improve performance in an increasingly competitive marketplace. Studies have shown that effective leadership correlates to an organization’s climate. For example, it has been said that 50 percent to 70 percent variance in organizational climate can be explained by differences in leadership style. In turn, organizational climate has been found to correlate to performance. So a positive climate can been attributed to increased profitability, sales and achievement.

How does a company promote a culture that constantly creates leaders?

It’s important to differentiate between organizational climate and culture. Culture refers to the values, beliefs, history and traditions that have been embedded in the organization over time. Climate, on the other hand, refers to the pulse that exists in the organization, which is exhibited in the day-to-day environment of the organization. Climate is like taking the temperature of a room.

So what can be done to create a culture that constantly creates leaders? A few things: actively encourage thinking among your personnel; foster an environment that’s based on trust and openness; encourage and tolerate calculated risk taking and don’t penalize for taking a risk; create a setting for positive conflict and healthy tension; actively encourage involvement and participation at all levels; actively encourage development of analytical skills; actively encourage decision-making through critical thinking.

Can anyone be made into a leader, or should a company pre-select those more suited? How does a company know who’s more suited to leadership?

Leaders are both born and developed. Some individuals are born with traits that allow them to be more empathetic, more confident, more resilient and more socially aware. At the same time, individuals can consciously develop certain competencies that move them toward becoming more effective leaders — if they’re prepared to commit the time and practice.

Companies have often simply depended on gut instincts to decide who’s more suited to be a leader. Instead, I believe both the organization and the individual should become more actively involved by making use of assessment tools (360-degree tools as opposed to self-assessment tools) to assist individuals to know more about their strengths and areas requiring further development. How are others viewing them?

Feedback from others is a powerful tool to identify areas of strengths and areas for improvement. Based on the results from these assessment tools, individuals can develop an action plan to build up certain competencies that lead to developing effective leadership styles.

How much time and investment should a company put into leadership development?

To be competitive, organizations should make leadership development a high priority. This means continual assessment of their personnel, initiation of development programs, and continual evaluation on the effectiveness of their leadership development programs.

What are the tangible results a company can expect from a well-instituted leadership development program?

As indicated above, if effective leadership leads to fostering a positive climate, then organizations can increase performance and even foster increased innovation. So a properly developed leadership development program that trains individuals can make an impact on the type of climate that’s created.

AGUSTIN V. ARBULU is associate professor in the DeVos Graduate School at Northwood University in Midland. Reach him at (248) 594-6262.