1.05 (V) 01.03 - The Business for Visionary Leadership
You've seen the Jobs video, where he shares with his employees, an initial vision for where the company is today and where it's going. We'll come back to that interaction, that meeting with his employees. But first I want to share with you some cutting edge research, that we've been conducting over the last decade or so. On the business case for why visionary leadership, why having leaders who can create compelling visions that bring people together around a shared direction. Why this visionary leadership is so important. The data that you see here, is from one of the most comprehensive studies to date. We published this study back in 2011. We looked at over 900 studies, beginning in the 1940's and 1950's. Over 900 studies, that had examined the impact of leadership on team performance. We found that the leader of a team, accounts for 31% of whether that team performs well or not. Of the 31%, we looked at what are the most critical, most essential behaviors, that leaders are engaging in, that enable teams to perform well. And we found that the three behaviors you see here, were three of the most important. Note the first and most important, is to create and communicate a vision that provides that team a sense of shared direction and meaning. The behavior of creating and communicating a vision, accounted for over six percent. That one behavior, accounted for over six percent of the variation to whether teams perform well or not. Other behaviors that are important, structuring the team, roles, responsibilities, defining the intersections and points of interdependence. That's a behavior we will talk about, when we talk about how you design and manage teams. Another behavior is being able to show consideration for individual team members. That's a behavior that we will talk about, when we discuss how you can motivate individual team members, by understanding their needs and their values. But coming back to the ability to create and communicate a vision. Your ability to be able to define reality, and create and communicate a vision that gives shared direction to your team, is quite possibly the most important behavior you can engage in, if we look across all of the studies published in history on team leadership. Another study that we've looked at, the impact of visionary leadership, not only on teams, but also how firms perform. A good friend of mine, Dave Waldman out at Arizona State, has conducted studies in large organizations. Looking at the impact of visionary leaders, on firm performance in terms of profitability, growth. And what he's found, is that your ability as a leader to create and communicate a vision, is most important in times of uncertainty. When the market around you is extremely dynamic and changing very rapidly, very fast, what he's found is, that visionary leadership is most important in those times of change. Much like the organizations that you work in today, or that you will work in in the future. Here's a study by another set of colleagues of mine, Baum and Locke. Published back in 2004, where they looked at over 200 CEO entrepreneurs. And the impact of visions for growth on firm performance, in small startup high growth organizations. So the ultimate outcome they were interested in, was how fast do these firms grow? They controlled for how fast the firm was growing prior to the study, how old the firm was, how big it was, where it was in terms of region. These firms were all in North America, but they were in different regions. So they controlled for region. They controlled for things like access to financial capital from VCs, or other investors. And then they controlled for how passionate the CEO was about the firm, how engaged that CEO was. All within idea of trying to understand the impact of the vision articulated and communicated by that CEO entrepreneur, and the impact that it had on the firm. And here's what they found. The ability to communicate a clear vision, from the CEO to the organization, did a number of things in that organization. Most importantly, was it enabled stretch goals to be created and cascaded down through the organization. The vision was the definition of where are we today and where are we going. And then that enabled managers in the organization to create very specific, but stretch goals, for their employees and their teams within the organization. Those stretch goals, actually increased the confidence level of the employees within the organization. That confidence was a big predictor of how fast the firms ultimately were able to grow. The numbers you see here on the screen on the slide, those are the effect sizes of each component of the model on the next. So the ability to communicate a vision had a significant positive impact, on the presence of stretch goals in the organization. Which then had a significant positive impact, on how confident the employees were, which then ultimately had a significant and positive impact on the rate of growth for each of these firms. But the real question here, and this is the question that I have been exploring now for the last several years, is what are those successful CEOs, those successful entrepreneurs doing when they communicate a vision that ultimately spawns confidence and motivation among the employee. These CEOs, the entrepreneurs that are successful, what do their visions look like? The CEOs that are less successful, what do their visions look like, and what can we learn by comparing those? And that's the model that I'm gonna share with you in this course. It's beginning to unpack, what is an effective vision. What are the components? And I'm gonna give you a framework for understanding. What is the content of an effective vision? Ultimately, what is the vision? And then second, is how do you communicate it? So first, what is the vision, the content of that vision? And then second, how do you communicate that vision, in a way that compels people to want to be part of your team and your organization.
