Leaders need to get results: whether revenue growth, return on sales, efficiency, profitability, employee satisfaction, or employee engagement. Quite the task! So how on earth do leaders do it?

One way is by influencing the organisation’s climate, which can account for a third of an organisation’s financial performance. How? Glad you asked!

Six ways leaders can influence organisational climate

Permit Flexibility – give employees the freedom to experiment and take calculated risks to achieve goals without unnecessary restrictions and micromanaging. Flexibility promotes creativity, innovation, and accountability over one’s work.

Create Responsibility – give employees control over their own work to create a sense of autonomy and responsibility for performance. Employees who feel accountable for their performance will put in greater effort.

Set Standards – clearly define and communicate standards and expectations for success and rewards. Give performance feedback relative to those standards. Clear standards and expectations maximise motivation and commitment to the organisation’s mission.

Distribute Rewards – distribute rewards and recognition fairly and in line with the set standards and expectations. Perceived unfairness can result in negative outcomes such as turnover, theft, vandalism, intentional idleness, absenteeism, employee fraud, exit behaviours, withdrawal behaviours, and grievance filing.

Enable Clarity – ensure employees know how their work ties in with the overall mission of the organisation. Understanding why their work matters again maximises commitment to the organisation and its vision.

Foster Commitment – This fits with clarity. Employees feel more committed to their tasks and goals when they know why their work matters and how their personal effort fits into the big picture. Frame an employee’s tasks with reference to the organisation’s mission and give feedback with reference to that mission.

Measuring leadership impact

Traditional measures of leadership often focus on the leader themselves. I.e. the leader performs psychometric evaluations that measure their traits, qualities, and characteristics.

The problem with such assessments is that they are subjective and based on one person’s opinion. Further to that argument, the person’s opinion is of themselves which creates an opportunity for social desirability bias (painting themselves in a favourable light).

What I propose is measuring leader effectiveness through employee experience because employees observe first-hand how their leaders affect the climate.

I suggest using items (on a scale e.g. 0-10) that represent the 6 key factors of influencing an organisation’s climate:

Leaders influence these climate factors with their leadership style.

Daniel Goleman has identified 6 key leadership styles and their effect on an organisation’s climate. Stay tuned for a review of each style and when to use them.

Check out Leadership Influence and Leadership Theories for a more detailed review of the leadership literature.