Category: Leadership Behavior, Financial & Employee Performance
Audience: Leaders, CEO, COO, VC & PE Funds
Overview: Leadership’s Behaviors Impact Employee Performance & Financial ROI
By: John K Moore, President, Client Performance Solutions, The Culture Think Tank
Read Time: 3 minutes
Picture a workplace where the employees are connected and communicated with, continuous improvement and innovation thrive and customers are delighted at every touch point.
Sound too good to be true?
Unlock your company’s financial performance potential by harnessing the power of behaviors – aligning leadership and employee behaviors with business goals is essential to impact your bottom line.
You can achieve superior financial performance and gain a competitive advantage by focusing on personal traits and leadership behaviors – going beyond a traditional focus on skill levels and incorporating metrics that include behaviors.
In business, performance refers to an organization’s ability to achieve its objectives effectively and efficiently.
Financial performance typically involves metrics like revenue growth, profit margin, cash flow, and gross margin – and refers to the company’s financial achievements.
There are other types of performance including operational, strategic, employee, customer, environmental, and digital to name a few – the approach taken with financial performance can also be leveraged across each of the other performance area types.
It’s important to point out these definitions do not address or include the ‘who’ or ‘how’ – until now.
Warning Signs – Typical financial performance warning signs include:
- Declining or stagnant revenue growth
- Decreasing profit margins
- Cash flow issues
- Rising operating expenses
- Declining market share.
Each of these potential underperforming areas can become a business KPI that will ultimately drive leadership and employee behaviors.
Asking for ‘increasing revenue’ may be too broad of an approach – use your current financial performance metrics to determine and prioritize specific business goals to address.
To optimize financial performance, focus on:
- Increasing revenues
- Decreasing costs
- Improving operational efficiency.
Increasing revenues can also include:
- Selling to customers you already have
- Implementing effective “win back” programs and
- Introducing new and innovative products or services.
Adding additional clarity around the ‘how’ will be helpful. The more granular the business goal, the easier it will be to align the required departments and their behaviors.
The same approach can be taken to address the decreasing costs and improving operational efficiency areas mentioned above. Leaders need to perform financial planning, set clear financial goals, foster fiscal responsibility, and ensure financial controls.
Employees should adhere to budget guidelines, identify cost-saving opportunities, and actively contribute to revenue generation.
Specify business goals and align necessary leadership and employee behaviors for each department involved.
Specific leadership goals to consider are:
- Streamlining processes
- Improving resource allocation
- Investing in automation and energy-efficient technologies
- Negotiating better terms with suppliers and
- Outsourcing non-core competencies.
Wrap-Up – Financial Performance Roadmap
Develop a roadmap to transition from the current skill-centric environment to a behavior-performance model optimized for financial performance.
Include specific tactical deliverables such as job description modifications, performance scorecard updates, training material implementation, job posting template updates, and reward program design. Monitor metrics regularly and make necessary adjustments to sustain the new behavioral environment.
Understanding and aligning leadership behaviors with financial goals can transform your company’s employee and financial performance.
Feel free to reach out for assistance with implementing these strategies or addressing other business performance areas.
John is President of the Client Performance Solutions Division at The Culture Think Tank. He specializes in developing innovative strategies and aligning them with processes and people. His book, Align or Resign, highlights many of his business techniques. Schedule a chat on John’s calendar.
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