The Return on Leadership. D. L. Brouwer
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From an organizational perspective, it is important to raise Reactive leaders to a minimum LQ of 1.0, which represents a balance between the Reactive and Creative Dimensions. This is where the leader’s impact on the organization is a wash, neither a competitive advantage nor a disadvantage. The organization still experiences powerful leadership inertia, but without the coercive, dictatorial style that makes fully Reactive organizations such a soul-sucking experience. In this case, the impact of leadership is null…more leadership exposure doesn’t hurt, but it doesn’t help, either. The most common complaint here? “We just can’t seem to get out of our own way.”
1 A Leader in the 60th percentile for Creative Dimensions and the 30th percentile for Reactive Dimensions has a Leadership Quotient equal to .6/.3 or 2.00. This is just above the average LQ score of 1.9 for Creative leaders…note that it is triple the average LQ of our prior example of a Reactive Leader who is saddled with an LQ=.67. Creative organizations experience leadership as a powerful differentiator and a strong competitive advantage. Leaders in LQ=2.00 organizations are twice as effective as LQ=1.0 organizations, and you can feel and hear the difference. Leadership is engaged in regular, meaningful dialogue about important, material issues. Decisions are explained, but more importantly, employees are often (but not always) engaged early in key decisions and project leadership, including defining their participation in developing a shared perspective of the future. A good example of Creative leadership is the senior leader who has been successful in a series of roles and inspires others to introspection and dynamic action in pursuit of a compelling future vision.Creative leaders are able to employ the expertise and management skills they’ve learned earlier in their careers, in service to a broader, compelling vision. Many people refer to their experience with a Creative leader as “the best boss I ever had – I can’t believe how much I learned and how much we got done.” When it comes to leadership development, Creative leaders are a joy to work with, because they are typically eager to embrace feedback presented in a Leadership Circle Profile™ and in ad hoc work groups or personal relationships.
1 A Leader in the 90th percentile for Creative Dimensions and the 10th percentile for Reactive Dimensions has a Leadership Quotient equal to .90/.10, or 9.0. This is the average score for Integral leaders. Note that it is 4.5 times the average LQ of Creative leaders and 13.5 times the average of Reactive leaders. Integral organizations operate at a completely different level, in a completely different way. Overall, they have a broader perspective on the world and their place in it. At all levels of the organization, employees are fully engaged in pursuit of a shared, specific vision, and routinely work together to spontaneously resolve real issues in real time. Assumptions are quickly tested and built upon or discarded. New possibilities are explored, quantified and prioritized.Integral leaders are skilled managers, gifted visionaries, and magical motivators. At their best they are the Abraham Lincolns and Nelson Mandelas of our world, able to integrate seemingly contradictory principles to inspire breakthrough thought and action. Integral leaders change lives, outcomes, and ultimately, the view of what is possible. The bottom line quote from people exposed to Integral leaders? “That experience changed my life and the way I look at my job and my coworkers. Years later, I am still talking about it.” Integral leaders tend to treasure and integrate feedback presented in a Leadership Circle Profile™ or through any other means. They will tease out the contradictions, find humor in the contrasts, learn from the experience, and deftly put their newly acquired knowledge to work in unanticipated ways. As part of their thinking, Integral leaders will dare you to change with them, and you will feel compelled to rise to that challenge.
The Return on Leadership (ROL)
If you’ve noticed an overarching trend in LQ, you are well on your way to understanding the impact of these critical measures of leadership ability. Just like the commonly used Return on Investment (ROI), Return on Leadership (ROL) measures the impact on the organization’s long-term results from a marginal change in individual performance. As an individual’s Creative Dimensions grow and the Reactive Dimensions shrink arithmetically, often (but not always) in lockstep, the positive, measurable impact of that leader on the organization grows exponentially. This turbocharged shift in impact constitutes an escalating return on marginal growth in leadership ability.
When it’s all said and done, what does this mean?
It means that leadership done right is the gift that keeps on giving. Even small increases in leadership capacity yield disproportionate gains, and unlike our experiences in the physical world, advances in leadership aren’t subject to the law of diminishing returns. That’s because it’s not about the leader, it’s about unleashing the power of the organization in service to a common vision, and that’s not an arithmetic thing – it’s exponential. Clarity of vision drives engagement, which in turn drives clarity of vision, creating a virtuous cycle that feeds on itself in a self-renewing, upward spiral. In addition, the ROL effect is available to organizations in two ways, either by investing in leadership capacity growth in current leaders, or by bringing in more advanced leadership from the outside. Either way, over time, the organization will reap the rewards of its investment through concrete, measurable Returns on Leadership.
The Whole Point of All This is What, Exactly?
In the Introduction, I made it clear that it’s my job to prove to you that Growth and Leadership are clearly, inextricably linked. What follows are proof points, correlations that tie together a set of leadership principles, behaviors and outcomes by comparing the results of our study to easily understood, rigidly researched, concrete measures of leadership.
Correlation #1 – Reactive Dimensions are defensive in nature. These behaviors equate to expending energy on outcomes you’re trying to prevent; in essence, trying to keep the train from jumping the tracks. Because of that, high Reactive scores have an overwhelmingly negative impact on organizations while low Reactive scores correlate to improved performance. The Leadership Circle Profiles™ that JP and I completed show Reactive scores that are rock-bottom and virtually identical, with JP’s at 15.3% and mine at 14.3%. In other words, when it comes to leadership, our reactive, defensive habits of thought rate lower than those of roughly 85% of our peers.
Correlation #2 – Creative Dimensions are visionary and inclusive in nature. They equate to investing energy in achieving desirable outcomes, in essence enabling the train to run on time to new and interesting destinations. Because of that, low Creative scores are also deeply, consistently negative, while high Creative scores correlate to improved performance. The results of our LCPs show Creative scores that are sky-high, with JP’s in the 98th percentile and mine in the 92nd percentile.
Correlation #3 – The Leadership Quotient (LQ), which we now know is derived from the combination of Creative and Reactive scores, correlates both to advanced stages of adult development and to peak organizational performance. As a quick reminder, expressed in the definitive measure of LQ, Reactive leadership averages .67, highly effective Creative leadership averages roughly 2.0 and mind-blowing Integral leadership averages 9.0.
Neither JP nor I purport to be either Lincoln or Mandela, but with virtually identical LQ scores of 6.40 and 6.39 respectively, our LQ scores say that, all other things being equal, in the roles in which we were assessed, we were more than three times as effective as the average Creative leader. More strikingly, we were nearly ten times as effective as the Reactive Leader who oversees the boulevard of broken dreams that most of us call “work.” In other words, our LQs predict that if you put either of us in charge of a sullen, conflicted mess run by an entrenched Reactive leader, the odds are good that the outcome will be what the world recognizes as a turnaround.
That leaves us with one final correlation. Do our methods in fact correlate to measurable organizational success in the real world? Can that success be mapped back to the chain of correlations we’ve already documented? There is only one way to know for sure. The answer to that final question lies in completing an in-depth exploration of the precise scenarios measured in our respective Leadership Circle Profiles™. We will need to comb through them looking for evidence that our leadership principles, independently derived during our inadvertent double-blind