When Leadership Isn't a Threat

It seems that our industry focuses exhaustively on leadership, from how to successfully use technology to take the business to the next level, to C-level financial success stories—and even our special Women in Insurance Leadership issue.

As an industry and a culture, however, we don’t tend to recognize or reward leadership behavior at lower levels. Why? Partly, it’s because in the typical pyramidal-type business organization plaudits naturally flow upward toward senior management. It’s also partly because C-level leaders sometimes view up-and-coming business unit leaders as a threat.

It’s no surprise, then, that senior leadership has been proven to be effective only when it’s backed by leadership from all levels within the organizational hierarchy. According to researchers at the University of California Berkeley Haas School of Business, when leaders across all levels of an organization consistently support a particular change initiative, the organization is likely to realize the performance benefits of the change more quickly and completely than if less consistency exists.

In other words, a powerful C-level team cannot achieve positive business results alone; to get the job done, you need leadership at the business unit level.

The study, “How Leadership Matters: The Effects of Leaders’ Alignment on Strategy Implementation,” offers Kaiser Permanente as the example of how this works. Faced with increased competition, the organization established a new, unique strategy—a corporate-wide focus on quality and service, rather than cost.

The plan involved making resources such as a new scheduling system and redesigned call centers available.  A second phase sought to improve physician-patient relationship via communication. With the overall goal being improved patient satisfaction, the study used data from both physician and patient satisfaction surveys to measure how well the strategy worked. The study also measured effectiveness by the organization’s leaders’ ability to communicate to employees why patient satisfaction was critical to the organization’s success—something new to the culture.

The more effective both the CEO and department heads were perceived to be, the more physicians supported the change in strategy.

Effectiveness also was measured by the degree to which the leaders articulated a clear strategy, set a vision, provided measurable objectives, dealt with resistance, motivated people to change … and rewarded progress in the change effort.

“Our research shows that effective change is less about the mechanics of the change—what new technology should be put in place, what procedures should be followed—and more about how committed leaders across all levels are to the change,” says Professor Jennifer Chatman, co-author of the study. “This suggests that CEO’s would be wise to spend time ensuring that their leaders down the ranks are fully informed and committed before embarking on major change efforts.”

If nothing else, consider it a matter of politics: Imagine your organization’s next new business strategy, and support your subordinate leaders who support your idea’s implementation.