Oct 082007

Impact of a Leader

Impact of a Leader

I had an interesting moment of clarity the other day around the impact of a leader that’s not from the business world but that does have lessons for the business world.  This may take a couple of minutes to set up, so bear with me.

One of my extracurricular activities is raising money for Princeton from fellow alumni.  For this effort, we use two basic metrics to track success in any given year’s campaign:  participation (what % of alumni give) and dollars (how much $ we raise). While dollars raised are escalating year over year as you’d expect with inflation and with an expanding alumni base due to larger classes in more recent years, participation rates are reasonably consistent for given classes, year in, year out.

But there’s an interesting trend I saw on a graph of the numbers that Princeton posts over time, which is that participation rates vary from class to class, much more than dollars given.  One class may always have 50% of its members donating; another will always have 75% of classmates donating.  You’d expect classes to hover around an average much more closely than the data would indicate.

One of the things that was pointed out to me when I was looking at the graph is that record-breaking participation rates of the younger classes spike up and stay up coincident with the arrival of the University’s current President, Shirley Tilghman, about 5 years ago.  I’m sure there are other explanations for this, but this one keeps resonating with me.  Why?  President Tilghman is an incredibly engaging public figure who really connects with students and alums of all ages.  And many (though not all) of the classes with systematically weak participation rates were on campus during the reign of her predecessor, President Harold Shapiro.  I don’t mean to malign President Shapiro – I’m sure he was an excellent administrator and fundraiser – but a warm figure and dynamic speaker that students looked up to, he was not.  No one I can think of when I was on campus during the Shapiro years felt as connected to the institution of Princeton as I hear current students feeling connected to the institution in the Tilghman years.  Again, there may be other explanations for the coincident timing of the drop in participation, but I’m going to run with this one for thematic convenience if nothing else.  :-)

This lesson must translate to the business world as well, especially for larger companies.  Leaders that can connect with their people receive payback for that connection in the form of retention, productivity, and quality of work.  Leaders that fail to do so – even while competently managing things like finances and Boards – are doomed in the long run to lead companies with less engaged teams, therefore weaker products, therefore less happy customers, therefore lower profits.

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  • John Doe

    I agree 100%. I have seen both extremes in my career. On one hand, CEOs who connect with employees and demonstrate by action that they take care of them are rewarded with loyalty, especially when times get tough.

    On the other hand, a bad CEO can destroy any sense of esprit de corps. I have found that people will tolerate bad executive decisions better than they will an abusive or selfish leader. A company can recover from most mistakes. Trust and loyalty, on the other hand, are hard to earn and easy to lose. Once people conclude that a CEO is out for himself, or is simply a prick, productivity and loyalty say bye-bye.

    You would think more people would understand this, as it is common sense, but I have seen many companies, and had the misfortune of working in two, where the CEO must have skipped this class in B school.

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