Measuring leadership effectiveness

It’s easy to get caught up in leadership development and skills. Plus, when things are going well, it’s even easier to ignore any metrics that tell you how effective leadership really is in your organization. There are numerous ways to measure effectiveness, but all of these analytics occur in four broad categories. Let’s examine each category of leadership measurement.

The first category of leadership measurement is in the subjective realm. When subjective measures are mentioned, people tend to dismiss them. But can your organization’s subjective measurements tell you how effective leadership is? Absolutely. First and foremost, you must honestly observe the overall morale of the organization. Does it deflate or does it not exist? Or is it morally high, even in the face of new challenges and obstacles? Low morale is a good indicator that leadership is not effective. What about participation and attendance? For example, if you start offering “town hall” style meetings or “brown bag” lunches, are you having a hard time finding someone who is interested? If you have to beg people to communicate or improve, that’s another subjective measure of leadership. Is innovation part of the daily life of your organization? What about continuous process improvement? Are people comfortable talking when they see that inefficiency is a better way of doing things? Otherwise, this is a definite sign that leadership needs to step up.

From the subjective, you can move on to number-based metrics. Often times, the organization numbers can tell you if the leadership is effective. For example, how does productivity look now compared to last year? Is there a temporary “dip” or is the trend going down? Other areas of measurement for leaders can be efficiency and mistakes. Are employees making fewer or more mistakes now? Are errors corrected in a timely manner or are they left to languish? What about sales? Are the numbers high or constant, even when times are bad? Take a close look at your customer service, both internally and externally. Are there numerous complaints that come up to your level or are they being resolved at lower levels? You can view the metrics that are used to determine the health of the organization and link to leadership, especially those metrics that are not tied to pay or bonuses. Remember that poor organizational performance can be related to many issues, such as market forces, poor positioning, or just bad economics. But also keep in mind that by seriously looking at these metrics, you can adjust leadership accordingly.

Another method to measure leadership effectiveness is the implementation of a leadership index. An index is a targeted measurement tool that associates complete against their managers or leaders. Essentially, it is an assessment of the leader using the skills, behaviors, and attitudes that are deemed appropriate for the organization. In simple terms, you can see questions like, the person “treats me with respect” and “helps me work on continuous improvement.” The evaluator is asked to give anonymous and confidential answers about the leader. The leader can see their results and can work on a development plan based on those results. There are numerous systems that can create the leadership index for your organization, or you can do it on your own. The main thing to remember is that using generic leadership behaviors, skills, and attitudes will not give you the best image of effectiveness. The organization must determine which skills and behaviors are most appropriate for its leaders.

One of the final methods for measuring leadership effectiveness is related to the leadership index. You can also measure leadership potential. With a similar index, the organization can measure how it is preparing and encouraging leaders at lower levels. A lot of potential leaders tell you that leadership is effective in the organization and that it is catching on at all levels. The fact that a group of leaders is developing on its own tells you that its leaders are actually leading effectively.

These are broad-based areas for measuring leadership effectiveness. Take the time to analyze your organization, its size, and your leadership requirements to determine which measures are appropriate.