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A company’s success is often attributed to the effectiveness of its leaders.

It’s because of this that just as much, if not more important, should be placed on an organization’s assessment of its leaders as they would with all other team members.

Measuring leadership effectiveness in an organization is generally pretty straightforward. It can be measured by the decisions made, how plans are implemented, the culture of the team, and the result of the leader’s initiatives.

It sounds simple enough, but in reality, is not so simple to measure. There are a number of frameworks and tools on the market to help evaluate leadership effectiveness, but the outputs are only as good as the inputs, so a proper level of objectivity, rationality, and insight must be applied.

So what exactly is leadership effectiveness, and how can we determine whether a leader is effective or not?

Research and common sense would suggest that when leaders can influence their teams to perform their respective tasks which result in positive business outcomes, leadership effectiveness has been achieved.

15 insights in assessing leadership effectiveness in today’s businesses

1. Members’ evaluation of their leader’s effectiveness

Team members can assess their leaders on the following aspects:

• Through their opinions and willingness to work for a leader These are ratings given by members that show their willingness to work with a high level of performance, assuring that they enjoy working with the leader, admiring the leadership qualities, and finding their job styles matching, and having similar principles.
• A leader’s overall effectiveness compared to other leaders the member has worked for
• Comparison of the perceived leadership effectiveness from a leader and a member’s point-of-view These evaluations consider the following metrics: satisfaction with leadership quality, general assessment of leader effectiveness, rating of the current leader and the ideal leader, aiming to be like the leader, and whether the leader helped the business prosper.

2. Higher job satisfaction of the members

Job satisfaction is a vital ingredient in maintaining productivity and efficiency in a company. We are all aware that satisfied team members become more engaged to perform their work well and drive productivity.

Members’ job satisfaction is also crucial to delivering customer satisfaction as John Smith, a former CEO of Marriott Corporation, described,

“You can’t have happy customers served by unhappy employees.”

At times, team members’ dissatisfaction is a more distinct way of gauging a leader’s effectiveness. Some indicators of dissatisfaction include their attitudes and perceptions based on their leaders’: level to meeting their expectations and needs, ability in improving their skills, and contribution to their mental growth.

3. Ability to motivate their members for optimum performance

When you can influence and encourage your members to perform at their best, which results in increased performance, you are said to be an effective leader. From “This is already good,” the mindset of your team members is switched to, “How can we make it better?”

4. Higher commitment and performance from the team

Several studies emphasize how successful companies bank on the commitment of their team members to perform at their best as they fulfill their roles.

Higher commitment is experienced by team members when they don’t just pledge to complete their tasks but are united in reaching the bigger goal of the organization.

Related: How these 7 Remarkable Leadership Skills Can Grow your Business

5. Raised financial performance and success of group goals

A proven indicator of leadership effectiveness is when your team’s talents propel the company to reach its goals. The numbers will show it through increased sales, market share, and quick return on investment.

6. Willingness of team members to accept additional roles

Although each team member tends to agree to perform defined roles, it does not limit the individual to these predetermined roles. Instead, members are open to accepting additional tasks as they see them as their means of enhancing their knowledge and skills.

Though only a few team members can be proactive in checking in with their leaders about what more should be done, it becomes a valid indicator of leadership effectiveness.

7. Better decision-making and members’ heightened commitment to decisions

Effective leaders are great decision-makers. They can also drive their team members to support and commit to their decisions through good communication.

8. Improved team performance

You are perceived effective when your team shows improvements in clear performance outcomes, like a division or unit reaching its goals, or when your members exhibit organizational citizenship behavior.

Organizational citizenship behavior occurs when your team members voluntarily commit to their company to perform other duties that are not part of their contract.

9. Capacity to promote growth and moral values

Establishing a workplace that promotes growth and moral values is a unique quality of effective leaders. By creating a growth environment through knowledge sharing, training and development initiatives, and opening doors of opportunities to your team members, you open them to endless possibilities – that makes you an effective leader. Through knowledge sharing, you can provide solutions by innovating your systems and/or creating new products or services.

Leaders who exhibit moral values, attract and retain team members who share the same principles.

10. Grown company profitability

Profitability is a simple yet direct way of measuring leadership effectiveness. If you can fast-track and sustain your growth by getting more clients or offering more services that answer the market needs, increased profitability will be seen.

What is essential is to build your reputation, brand, and offerings for profitability to follow.

11. Attained strategic objectives

Another straightforward way to assess a leader’s effectiveness is through the met goals and objectives. Review your metrics in your strategic plans to determine whether you were able to achieve the return on investment or hit your productivity targets.

12. Positive workforce attitudes

When your team is excited to come to work or participate in weekly meetings, it’s a sign that you are an effective leader. More than the financial metrics, members who are engaged and willing to give their all on projects, events, or any initiative, show that you have succeeded as a leader.

13. Empowered and confident team members

Effective leaders contribute to the growth of their team members by putting them in roles that can showcase their strengths and improve their skills. Letting them shine and acting as their support displays your trust in them and gives them a feeling of empowerment.

14. Delivered customer satisfaction

Whether you are offering new products or delivering after-sales service, customers will remember how you helped them or solved their concerns. When you focus on customer satisfaction, you won’t have to worry much about your profitability.

15. Improved team metrics

Through several team metrics like increased employee engagement, reduced members turnover, or boosted internal promotions, you will identify whether or not you’ve been effective as a leader. So long as team members feel they are valued, they likely won’t quit their positions so you can retain and develop them to be your company’s future leaders.

References:

Belias, D. & Koustelios, A. (2014, March). Leadership and Job Satisfaction – A Review (10). 1857-7881. Retrieved from https://www.researchgate.net/publication/261570285_LEADERSHIP_AND_JOB_SATISFACTION_-_A_REVIEW

Cakir, F., & Adiguzel, Z. (2020, March 31). Analysis of Leader Effectiveness in Organization and Knowledge Sharing Behavior on Employees in Organization, 10 (1). https://doi.org/10.1177%2F2158244020914634

Forbes Business Council. (2021, May 28). How to Measure Leadership Effectiveness: 14 Essential Tips. Forbes, Inc. Retrieved from https://www.forbes.com/sites/forbesbusinesscouncil/2021/05/28/how-to-measure-leadership-effectiveness-14-essential-tips/?sh=5abc10c92823

Gray, Rob. (2018, January 25). Measuring leadership effectiveness. HR magazine. Retrieved from https://www.hrmagazine.co.uk/content/features/measuring-leadership-effectiveness

Madanchian, M., Hussein, N., Noordin, F., & Taherdoost, H. (2017). Leadership Effectiveness Measurement and Its Effect on Organization Outcomes. Procedia Engineering (181). 1043-1048. Science Direct. Retrieved from https://www.sciencedirect.com/science/article/pii/S1877705817310950/pdf?md5=6734d539d7257eae7b2036bb554f7298&pid=1-s2.0-S1877705817310950-main.pdf