What is an Effective Leader?

Howard Schultz, CEO of Starbucks, gives his opinion on the value of leadership and how it relates to employee engagement in the 1999 book Lessons From the Top: The Search for America's Best Business Leaders. In it he says, "I think it's very difficult to lead today when people are not really truly participating in the decision. You won't be able to attract and retain great people if they don't feel like they are part of the authorship of the strategy and the authorship of the really critical issues. If you don't give people an opportunity to really be engaged, they won't stay."

A leader is more than a job title or position of authority. A leader creates an environment where others want to follow. They inspire others to internalize organizational goals and values, apply extraordinary effort, and achieve results above and beyond expectations.

In other words, leaders have the ability to engage their employees, peers, and clients.

What is Engagement?
The word “engagement” gets tossed around a lot. My favorite definition, in the context of employee engagement, comes from Kevin Kruse, author of Employee Engagement 2.0. In his Forbes article, he says it’s “the emotional commitment an employee has to the organization and its goals.”

An experience I had just today perfectly demonstrates the concept of emotional commitment and how it can affect a company. I was in line at a local chain deli for lunch. This deli isn’t anything special – the usual overpriced fare and crowded every noon hour. Employees behind the counter take your order and another one brings the food to your table. Everyone is friendly and helpful, but no more than expected.

Except for Julio. He’s the busboy, and I see him there every time I go. He pushes his cart around clearing tables and chatting with every customer in the place. The last time I was there, he recognized me as a semi-regular and asked my name.

That was three months ago.

Today, he greeted me by name (no, I wasn’t wearing a name tag). Then he proceeded to grab a bottle of my favorite juice from the cooler (wow, he remembered that?) and set it on a table for me, effectively reserving the table for me while I waited in the long line.

The restaurant doesn’t allow tips. He’s likely making close to minimum wage. He works long hours. But his emotional commitment to that deli shines through, and he’s ensured my loyalty as a customer through those small acts today. I’ll definitely be back – and this time much sooner than three months.

Leadership Drives Engagement
Engaged employees can have a tremendous impact on a company’s bottom line.

  • Highly engaged employees tend to outperform their disengaged colleagues by more than 20% (Conference Board, 2006).
  • Companies with high levels of engagement had operating margins that rose by 3.74% over three years, whereas low level engaged companies’ margins fell by 2.01% (Towers-Perrin/ISR, 2003).
  • Companies with highly engaged employees had average gains in share price of 16% compared to an industry norm of 6% (Sirota Consulting, 2005).   

In fact, in virtually every study published on employee engagement shows positive correlations with desired organizational outcomes.

So how does an employee like Julio come into being? Certainly, part of it is individual personality and work ethic. Part of it is company culture. But I believe an even bigger part of employee engagement is effective leadership.

Great leaders will:

  • Proactively learn about employees’ values and desires.
  • Guide employees to understand a connection between work and reward.
  • Influence and inspire employees to develop shared values.
  • Create and reinforce high performance cultures.
  • Exude and instill confidence through interactions and decision-making.
  • Create environments where employees can obtain their goals.

If you have leaders in place with the above characteristics, you’re more likely to have engaged employees.

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