Page 54 - The extraordinary leader

Great Leaders Make a Great Difference • 31

3. The important characteristic of the middle deciles is that results
remain relatively consistent from the 30th to the 70th percentiles.
Making small, incremental improvements in leadership effectiveness
for a leader at the 50th percentile is clearly not going to have much
impact on employee commitment.
4. To achieve the next level of impact on employee commitment, a
leader would have to move to the 70th, 80th, or 90th percentile. The
results of several other studies demonstrate the relationship between
leadership effectiveness and additional desirable outcomes.

Impact on Net Profits at a Mortgage Bank
From measures on subordinate commitment to the organization, we now turn
to measures of financial performance. At a mortgage bank, we collected data
on its measure of profitability, or net profits, for a series of leaders. Figure 2-2
shows the results of our study.

5,000,000
4,516,974

4,000,000

3,000,000
2,384,588

Net Profit 2,000,000

1,000,000

0

–1,000,000
–1,176,454
–2,000,000
Bottom 10% Middle 80% Top 10%
Leadership Effectiveness
Figure 2-2 Net Profit