Managerial Leadership at Twelve O’Clock

Link management practice to business results

2002 Volume 5 Issue 3

The Linkage Research Model can mean the difference between floundering and knowing how to drive business results.

Managerial leadership – everyone knows an organization needs it to thrive and grow. But what does managerial leadership mean for you and your organization? The Linkage Research Model (LRM) is one way to think about this. LRM encourages managers to focus on those managerial leadership practices that drive employee results, which in turn influence customer results, which are what actually produce business results.

This model can be depicted as a clock. At the twelve o’clock position is a set of Managerial Leadership Practices. At three, six, and nine, respectively, are employee, customer, and business results. This clockwise relationship is shown below.

Managerial Leadership Clock

The Linkage Research Model and Managerial Leadership

This article suggests one way for managers to explore and identify those managerial leadership practices that should be in their twelve o’clock box in the LRM model. In so doing, this approach encourages them to survey current popular management writings in order to stay up to date with current management practices.

More on the Linkage Research Model (LRM)

The primary purpose of linkage research is to identify elements operating in the work environment, especially managerial leadership practices, which influence employee actions as well as customer relationships. To do this, LRM correlates managerial leadership practices with employee and customer survey data and with other important organizational metrics. The stronger the link between particular managerial leadership practices and employee survey results, customer survey results, and other measures of organizational effectiveness, the more important these specific leadership practices are considered to be in influencing overall organizational success. As more research is conducted using this model, practitioners will learn more about how the various relationships examined in the framework interact across different cultural, industry and organizational settings.

While the LRM model does not address all the factors that may impact organizational performance, numerous foundational studies exist that lend support to the linkage methodology. One landmark study, done at Sears in the mid-1990s, demonstrated how the various components in the model can be quantitatively analyzed and used to manage business operations. Management focused on 12 skills, grouped into three categories: passion for customers, people add value, and performance leadership. Following implementation of these practices, they found that a five-unit increase in employee attitude was correlated with a 1.3 unit increase in customer satisfaction (both measured by surveys) and a 0.5% increase in revenue growth. These results were statistically significant.[1]

Jack Wiley is internationally recognized for his work in linking employee survey results to measures of customer satisfaction and business performance. From his experience and applications of LRM across a variety of organizational settings, including retail branch banking, he concludes that:

  1. Employee and customer satisfaction are clearly linked.
  2. Managerial leadership value systems and practices are critical ingredients in this linkage between employee and customer satisfaction.
  3. Employee retention and customer satisfaction are positively correlated.
  4. Over the long haul, quality and customer satisfaction are positively linked to customer retention, market share, and profitability.
  5. Short-term practices intended to maximize sales and profits may adversely affect employee and customer satisfaction.
  6. Commitment to managerial leadership practices that support quality, as well as employee and customer satisfaction, is a longer-term business strategy, not a quick fix.
  7. Managerial leadership practices within the LRM framework become self-reinforcing.

Given the growing track record of research on the LRM, I would strongly encourage any managerial leader to discern which managerial leadership practices actually drive employee, customer and business results for his or her group or organization. What follows is an approach to help you do just that!

Selecting Key Managerial Leadership Effectiveness Practices

Focusing on key managerial leadership practices that ultimately drive organizational results is a challenge. This challenge includes identifying the universe from which to choose, establishing a set of criteria by which to critically analyze each potential practice, and deciding upon the final practices to be included in your 12 o’clock box. To assist in meeting this challenge, I offer practitioners the following four-step approach to selecting managerial leadership practices that will be effective in their organizations.

Step 1: Survey Practices: First, identify the universe of managerial leadership practices. One way is to regularly review business periodicals that are written for practitioners[2], as well as websites that provide business tools and information or that aggregate business literature. Book review sections of papers, journals and websites can also be useful. However, if your time does not permit this amount of research, I recommend that you read The Manager’s Bookshelf: A Mosaic of Contemporary Views by Pierce and Newstrom, now in its sixth edition. The current volume concisely reviews 45 best-selling business books and offers summaries of a multitude of managerial leadership practices. This source provides a convenient and relatively painless way to pore through volumes of practices to glean what is useful to your circumstance.

Step 2: Identifying Relevant Practices: Then from the numerous practices you have identified, narrow the list to include only those that would be relevant to and potentially useful in your leadership role. This is essentially an informal brainstorming session.

Step 3: Establishing Selection Criteria:Now that your list is more refined, select those that would be most effective for you by formulating a list of a few meaningful criteria to use to narrow your field of finalists. Some potential criteria are presented as questions to ponder: Is the practice valid on its face? – Does it generally seem to make sense? Is the practice practical and does it have application in the real world? – Can this practice be made to work in my organization given my current situation,? Is the author espousing the practice credible? – Does the author’s training, experience and/or other credentials support and give credibility to what he or she is espousing?

Step 4: Using the Criteria to Select Your Final Practices: Next, look at each of the managerial leadership practices you brainstormed in Step 2 in light of each of your criteria. Typically, anywhere from five to twenty managerial leadership practices will make the cut. You may find it useful to engage co-workers in this critical review process, carefully considering each practice and its relevance and usefulness in your situation. . All your final selections should be double checked against the selection criteria you established in Step 3. Further refine your list until it represents the “best” of managerial leadership practices that you believe drive employee, customer and overall business results in your own sphere of influence.

The Application

To demonstrate the process, I would like to apply the Four-Step Model, showing how it can be used by management practitioners

Step 1: Survey Practices: Using the Manager’s Bookshelf, read each of the 45 summaries of these business best-selling books. You will find a myriad of managerial leadership practices, some of which may be relevant to your own situation, others not.

Step 2: Identifying Relevant Practices: As you read, list in bullet point fashion the managerial leadership practices that seem to be most able to drive results in your work setting. Note the page, source book, and “take-away” points for future reference.

Step 3: Establishing Selection Criteria: When you have generated an extensive list of potential managerial leadership practices,determine a handful of useful criteria to use to pare down your list. Potential criteria to use may include: Practicality Face Validity External Validity Research Support Author Credibility Uniqueness Objectivity Reliability Reasonable Approach Emotional Appeal Application Value Track Record of Success

Step 4: Using the Criteria to Select Your Final Practices: Your chosen criteria may be applied in a variety of ways to each of the managerial leadership practices designated thus far. I recommend that you create a spreadsheet and list each practice that you have selected. Then evaluate each of these practices against your established criteria using a ten point scale (ten being the highest). The practices receiving the highest ratings would be considered a “preliminary final list.” Discuss these practices with three or four of your key reports. Check these final candidate practices against your stated criteria once again. On a scale of one to ten, to what extent does each practice really seem like a key action that managerial leaders in your current situation can take to drive results? If you can answer this key question with an “8″ or higher, and you have also given the specific practice a high rating against your criteria, then that particular practice becomes a practice you place in the twelve o’clock box. You are endorsing it as a managerial leadership practice that should help you drive employee, customer, and overall business results.[3]

Selections using this stepwise approach are largely intuitive. To learn how to more rigorously examine your selected practices using quantitative methods with the LRM framework, visit Jack Wiley’s work on high performance organizational climate (Wiley, J.W., and Brooks S.M. (2000), “The High Performance Organizational Climate: How Workers Describe Top Performing Units,” in N. Ashkansay, C. Wilderom, and M. Peterson (eds.), and Handbook of Organizational Culture and Climate, Thousand Oaks, Sage Publications.

Some Sample Selections

Having worked externally in many companies across a variety of industries as a business advisor/organizational psychologist, I have gleaned five managerial leadership practices that I would recommend across the board for your final list:

1. The Stockdale Paradox: (Based on Admiral Stockdale’s experience as a prisoner of war in the “Hanoi Hilton” during the Vietnam War.) Face the hard cold facts of the current situation but, even with a grim reality, maintain total faith that you will prevail in the end.[4]

2. Affirming Shared Values and Honesty: Ensure there is an agreement in your organization about values, and be honest in your dealings with others. In one global survey involving over 15,000 managers, honesty was determined to be essential to leadership.[5]

3. Courage and Risk Taking: Create a working environment that fosters courage and encourages taking calculated risks.[6]

4. The New Management Virtues: Lead and manage in ways that reveal the virtues of trustworthiness, unity, respect, justice and service. Do the right things for the right reasons, and long-term results will tend to be positive.[7]

5. The Star of Success: Utilize a five-pointed star, where each point represents a key question that helps members of an organization determine if they have the right pattern of success. Do we have the right strategic direction? Do we have the right functions (processes and systems)? Do we have the right form? Do we have the right resources? Do we have the right information?[8]

In practice, I have my clients take this further by translating their selected managerial leadership practices (Step 4) into specific actions and behaviors. They are encouraged to determine how they plan to convert a practice into action, where it will be applied and when it will be applied.

A Closing Note

As a practicing manager or a student of management, knowing what is at your 12 o’clock position in the Linkage Research Model can mean the difference between floundering and knowing just what to do to help drive business results. I encourage you to use this four-step process to help you enhance your practice tool kit to achieve results. Managerial leadership practices at 12 o’clock can make the difference between organizational and career success and failure. Do you know what should go into your 12 o’clock box?


Notes

[1] Rucci, A.J., Kim, S.P. & Quinn, R. T. (1998). The employee-customer- profit chain at Sears. Harvard Business Review January-February, pp. 84-97. While Sears continues to be challenged by formidable competitors such as Wal Mart and Target, this work in the 1990′s of connecting soft people processes to hard business metrics helped demonstrate how LRM could be operationalized in an applied business setting. For those interested in learning more about the ups and downs of Sears as it strives to compete in a hyper-competitive industry, read The Hard Road to the Softer Side: Lessons From the Transformation of Sears, (2001) by Arthur C. Martinez and Charles Madigan, Crown Business Books.

[2] There are literally hundreds of business publications available, but many are research publications that target academic audiences. The business section of any major public library will have some that you can browse in addition to the well-known ones such as Fortune (hyperlink no longer accessible), Forbes, and Businessweek. The Academy of Management Executive, Harvard Business Review (hyperlink no longer accessible), Sloan Management Review, California Management Review, Chief Executive Magazine, to name just a few. If you are serious about exploring this world, check out Cabell’s Directory of Publishing Opportunities in Management (hyperlink no longer accessible) while you are in the library. It gives brief synopses of most of the business publications. Websites are also an increasingly popular source of information. Many also sell services and seminars, but many times they offer free articles as well. For example, check out BetterManagement, Strategy + Business, ManyWorlds, bPubs. Many major newspapers also have websites. There are many other sources you can find through Yahoo or just doing a search on the web.

[3] Selections using this stepwise approach are largely intuitive. To learn how to more rigorously examine your selected practices using quantitative methods with the LRM framework, visit Jack Wiley’s work on high performance organizational climate (Wiley, J.W., and Brooks S.M. (2000) “The High Performance Organizational Climate: How Workers Describe Top Performing Units” in N. Ashkansay, C. Wilderom, and M. Peterson (eds.) Handbook of Organizational Culture and Climate, Thousand Oaks, Sage Publications).

[4] From, Good to Great by James C. Collins, p. 200 in Pierce and Newstrom.

[5] From Credibility by James M. Kouzes and Barry Z. Posner, pp. 268 and 270 in Pierce and Newstrom.

[6] From, Fusion Leadership: Unlocking the Subtle Forces That Change People and Organizations by Richard L. Draft and Robert H. Lengel, p. 192 in Pierce and Newstrom.

[7] From Managing with the Wisdom of Love: Uncovering Virtue in People and Organizations, by Dorothy Marcic, p. 303 in Pierce and Newstrom.

[8] From Whole-Scale Change: Unleashing the Magic in Organizations, by Dannemiller Tyson Associates, p. 223 in Pierce and Newstrom.

References

Pierce, J.L. & Newstrom (J.W.). (2002). The Manager’s Bookshelf: A Mosaic of Contemporary Views. (Sixth Edition), Upper Saddle River, New Jersey: Prentice Hall.

Rucci, A.J., Kim, S.P. & Quinn, R. T. (1998). The employee-customer- profit chain at Sears. Harvard Business Review January-February, pp. 84-97.

Schneider, B. & Bowen, D. E. (1985). Employee and customer perceptions of service in banks: Replications and extension. Journal of Applied Psychology, 70, 423-433.

Wiley, J. W. (1996). Linking survey results to customer satisfaction and business performance. In A. Kraut (ed) Organizational Surveys. San Francisco: Jossey Bass.

Wiley, J. W. (1991). Customer satisfaction: A supportive work environment and its financial cost. Human Resource Planning. 14 (2), 117-128.

Wiley, J.W. & Brooks, S. M. (2000). The high performance organizational climate: How workers describe top performing units. In N. Ashkansay, C. Wilderom, & M. Peterson (eds). Handbook of Organizational Culture and Climate, Thousand Oaks, California: Sage Publishing.

Wiley, J.W., and others. “Driving Organizational Outcomes with Strategic Employee Surveys: Best Practices From Internal and External Practitioners.” (2002). Pre-Conference Workshop. Presented at the Seventeenth Annual Conference of the Society for Industrial and Organizational Psychology, Toronto, Canada, April 2002.

About the Author(s)

Charles D. Kerns, PhD, MBA, is a professor of applied behavioral science at the Graziadio School of Business and Management. He has more than 30 years of business, management, and consulting experience. Through his private consulting firm, Corperformance, he has implemented performance management programs and systems to help companies from many industries maximize their results. Since 1980, he has taught in almost every program in the Graziadio School, first as an adjunct faculty member, then, since 2000, as a member of the full-time faculty. He has also served as the associate dean for Academic Affairs. Dr. Kerns holds a Diplomate, ABPP, in both Industrial-Organizational Psychology and Organizational-Business Consulting Psychology.

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