I was recently asked, “Do you think that leaders really make a difference?” This is actually a great question and while I would tend to suggest that they do, I would challenge anyone to examine the “why” or “why not” before answering the original question. I think you might be surprised by what you discover and by doing so, it will help to eliminate potential excuses that we often provide ourselves when failure begins to occur. It might also help eliminate self-serving bias. Either way, it will help us examine some of the complexities that organizations often face. Let me give you a few examples of what I mean. What if someone said…

Even in an economic recession, a good leader can prevent a company from doing poorly.

I would tend to “agree”, but there is some fine print that must go along with this. No doubt a leader can help to prevent a company from doing poorly during economic trouble, IF and only IF the product or service being provided by the company is a product that can weather such times. Companies that provide “the extras” in life, will struggle tremendously during economic strife. However, companies that are diversified with products or services that are readily used and are listed at a decent price have a much better chance at survival.

So we have to understand that you could have the greatest leader on the planet but that if you have the worst product or service on the planet, you will likely see failure. Can that leader make some adjustments? Of course… if the board allows it. I guess the point here is that we must keep in the complexities of the real world. Let’s try another one.

What if someone said…

The quality of leadership is the single most important influence on how well the organization functions.

While I do “agree” that leadership is the tip of the spear, we must also recognize that if the rod it not sound, the spear will not fly correctly. Culture, society, and many other factors must be taken into consideration every single time we evaluate leadership. The leadership is key and probably is the “most important”, but the many other factors are right up there along with it because you can’t have one without the other.

Let me provide you an abstract and almost security-related example. Imagine for a second that an area is hit by economic strife. The leader of a company identifies theft as a potential problem so that leader proactively tells their employees that taking from the company is wrong and it shouldn’t be done. But for whatever reason, the leader decides to continue with old policies by continuing to place money in places that easily tempt theft by employees. During the next several bank drops, the leader begins to notice that funds are missing.

What happened here a blended problem. Of course, it’s terrible that employees are taking from the company but it’s actually the leader’s fault in many regards. While the leader identified the problem and proactively set out to influence the situation, the leader actually planted the seed of theft and also didn’t do anything to barrier the funds that were noticeably vulnerable. Let’s move on.

What if someone said…

Sooner or later, bad leadership at the top will result in declining organizational performance.

Here is something that we have to understand… “bad” is relative. Remember that Hitler was loved by some, King Abdullah is revered in certain circles and people still wear Che Guevara t-shirts as though he were some hero. This is to say that what I think is bad, someone else might find perfectly acceptable. Something that helps put this into perspective is the question “Can there be immoral, yet effective leaders?” Of course, there can! The truth is that we all know that there are a lot of bad leaders out there; some of you still work for them and are afraid to speak up about it and expose them for what they are. That’s what I think is bad.

What if someone said…

A company is only as good or as bad as its leaders.

I can understand why someone would say this but it’s not entirely true. We have seen quite a few highly successful organizations over the last hundred years or so who had horrible and downright unethical leaders at the helm. In fact, some of these organizations still stand to this day. This goes back to what we were just talking about though. “Bad” is relative… but so it “good“. Think about it from a political point of view for a second. Republicans tend to consider Democrat presidents as horrible and Democrats tend to consider Republican Presidents as horrible. It’s relative and this is especially true when consider how much DOESN’T change from one administration to the next. Of course, we have also seen fantastic leaders whose organizations collapsed. I want to challenge everyone to think considerably deeper in regard to your evaluations.

What if someone said…

Even the best leaders can’t help an organization very much when the economy is bad or when the competition is tough and it is impossible for an organization to do well when its leaders are average.

I believe that a leader can do quite a bit to help their organization compete in economic strife. From locating and reducing unnecessary costs, to diversifying (or simplifying) their product or service line, and actually so much more, a leader has arguably the most opportunity during such times. In fact, many corporate power-houses today became what they are due to their presence and actions during economic hardship. However, leaders must also influence and act upon the discoveries and ensure that their recommendations are being completed. This topic could probably be another book but I think you can see what I mean. Self-serving bias is something to keep an eye on here.

As for average leaders, we must collectively recognize that the world is filled with leaders who are mediocre at best. Of course, much of this comes from a lack of leadership training but that’s a different discussion altogether. Regardless, we could all list plenty of organizations that do just fine (or even quite well) with average leaders behind the wheel.

It’s actually quite unfortunate because I think about all of the great leaders out there who are just waiting to get a shot and might never get the opportunity. Unfortunately, it’s my opinion that there many organizations out there that couldn’t recognize “exceptional” if it smacked them in the face. This likely has more to do with holding on to traditional management ideologies but the issue remains. Still, these organizations will continue to tug along because they were at least smart enough to get a fantastic HR department.

But let’s ponder this in a little more depth for a moment. We can pretty much assume that average leaders will likely never hit the history or business books. But we’ll hear about the corrupt ones, ones over massive organizations and of course the innovative ones that just so happen to catch the eyes of an influential writer. Unfortunately, I don’t think many people give this much thought.

The question that I have is “what measuring stick are we using when we say average”? Let’s think about the organizations that these “average” leaders actually lead. Are any of those organizations successful? Are any of them achieving their overall vision or mission? Are any of them loved by their community and workers? I would argue that there are PLENTY of organizations that are flat out exceeding in all of these but their leaders will never be recognized by the business community outside of their hometown because they are considered “average” or because their organization is considered “average“. Think about what lessons we are potentially missing here. I believe there is a massive gap here.

What if someone said…

Compared with the economy, competition, and other external forces, leaders have only a small influence on a firm’s performance.

This is probably only true if the leader believes it to be true. What would workers think if the leader made it clear that he or she didn’t care? The fact remains that leaders have a great deal of influence – be it good or bad – at all times, with their workers, with their customers, with their community and even with other organizations. If the leader takes a defeatist attitude about the economy and then hides out in the office, undoubtedly the organization as a whole will begin to feel it too and eventually the company will stop performing as well as it normally would. Of course, this could even kill the organization.

The opposite can be true too though. A leader that is ready to tackle opportunities, take on new challenges and keep workers motivated to find solutions to organizational problems, will likely do just fine. I liken this to something like a flag-bearer. This leader is the soldier that grabs the flag and pushes forward in the hopes that other soldiers will follow along and start shooting.

Of course, the company’s top executives also have the power to make or break the organization. This is true not only in a literal way but also in a metaphoric way. The execs can dissolve the company or even build it up if they wish. Their decisions (again, both good and bad) can direct the company into prosperity or demise.

“So David, do you think that leaders really make a difference?”

You bet I do – one way or another! But it’s usually not as simple as it initially seems and that difference that we are talking about depends on what we are looking at or even expecting. I could probably do an entire book on this topic that provides a variety of hypothetical situations that help to further breakdown the complexities. My advice is that if you are going to judge a leader, then you need to give clarity to the measuring stick. Understanding that leaders make a difference is simply not enough. Of course, they do. In my opinion, it’s better to understand WHY and HOW leaders make the difference.