Leaders in control

Leaders have far less control over organisations than many people believe. Research suggests their actions rarely explain more than 10% of the difference in performance between the best and worst organisations.

by Stanford Business Magazine
Last Updated: 23 Jul 2013

Outside events, industry and other company-specific factors are generally much more important.

The danger of making things much worse means that avoiding bad leaders can be more important than seeking great leadership. As well as hurting financial performance, bad leaders can drive skilled and motivated people into the arms of competitors, or cause remaining employees to withhold discretionary effort.

However, leaders themselves have financial incentives in perpetuating the myth that they are in control. Because of their discretion over rewards and resources, underlings also have an interest in flattering this belief. It is argued that leaders should act as if they are in control and project confidence, while recognising and acknowledging organisational realities and their own limitations.

The half-truths of leadership
Jeffrey Pfeffer and Robert I Sutton, Stanford Business Magazine, May
2006.

Reviewed by Steve Lodge.

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