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To gain credibility, even inspiring leaders need a boost from people who benefit from the company, study suggests

May 1, 2012

For more information, contact: Benjamin Haimowitz, (212) 233-6170, HHaimowitz@aol.com

Prized though it may be in the business world, inspirational leadership has not always lived up to its billings when subjected to close scrutiny in management research. What has emerged in a number of field and laboratory studies is the big difference between leaders' articulating a stirring vision and their being able to make it tangible reality -- or, as one study put it, "to ensure that the vision is not simply rhetoric."

A new paper in The Academy of Management Journal brings this point home anew while suggesting a way forward for managers -- go beyond rhetoric by connecting employees with people who benefit from their work.

Comments the paper's author, Adam M. Grant of the Wharton School of the University of Pennsylvania: "When leaders articulate a meaningful vision, they can bring it to life by putting employees in touch with the end-users who will benefit from the vision. When leaders at Wells Fargo are encouraging loan officers to promote a new loan option, they complement the vision with videos of customers describing how much they appreciate the loan. When Facebook develops a new software product, they invite software engineers to interact with people who will benefit from the product. Face-to-face contact with the end-user enables employees to see the tangible, meaningful consequences of their actions for a living, breathing person."

In support of the importance of doing this, the paper cites a communication from a former CEO celebrated for his transformational leadership, Bill George of Medtronic, on the need for employees to remember that "they're here to restore people to full life and health. If I'm making semi-conductors, how do I get to see the impact on patients?...It's very important that [employees] get out there and see procedures...You get to see the patients first-hand...it's a way of communicating what we're all about." Prof. Grant adds that patients are invited to the company's annual Christmas party to share their stories about how its medical technologies helped them.

The new AMJ paper features two complementary studies, one involving salespeople in a privately held company and the other involving employees and supervisors in a large U.S. government department.

The first study compares the effect of four different training sessions on 71 new salespeople hired by a firm that sells educational and marketing software over the phone. One group of the new hires received a pep talk from a senior executive of the company and met a colleague from another department who spoke about the importance of revenue generated by the salespeople in supporting the beneficiary's unit. A second group received a talk from the senior executive without meeting the beneficiary; a third group met the beneficiary but not the senior executive; and a fourth group attended a session led by the department manager without participation of any outsider.

Prof. Grant found a marked difference over the following seven weeks in sales and revenues between the first group and the other three groups, with individuals in the first group responsible on average for almost 30% more dollars per shift than salespeople in the three other groups, who generated roughly similar revenues. In sum, inspirational leadership and contact with a beneficiary had a substantial effect in combination but not individually.

What to make of the fact that such a seemingly small difference in training made such a considerable impact on results? "Five years ago, I would have been shocked," Prof. Grant answers. "But over and over again in this research, apparently small differences in connections with end-users make big differences in performance."

The second study probes the performance of 329 federal employees in more than 20 different jobs including engineering and manufacturing, customer service, financial analysis, and information technology. On a scale of 1 (strongly disagree) to 7 (strongly agree), employees were asked to rate the inspirational leadership of their direct supervisor through such items as "articulates a compelling vision of the future" or "specifies the importance of having a strong sense of purpose," and to assess the extent of their own beneficiary contact through such items as "on the job I frequently communicate by people affected by my work." Direct supervisors were asked to rate the subordinates' job performance in percentiles ranging from the bottom 10 percent to the top 10 percent.

Prof. Grant found that when supervisors were relatively uninspiring, the amount of beneficiary contact employees experienced bore little relationship to the job performance rating they received and that, when beneficiary contact was low, job performance was about the same no matter how inspiring their bosses were. Only in combination did inspiring leadership and beneficiary contact result in high employee job performance.

Research that brings this lesson home, the professor believes, helps explain a growing tendency among businesses to build beneficiary contact into jobs that previously involved few if any dealings with the public -- a trend that has affected employees ranging from software specialists at Facebook to assembly line workers at John Deere to engineers at Raytheon.

Meanwhile, what about the other side of the coin -- employees who commonly interact with the public but exhibit little in the way of sensitivity or responsiveness to people with whom they deal? In part, Prof. Grant says, this lack may have to do with the fact that the services many employees provide have little impact on beneficiaries. Yet, leadership, he adds, may be a missing ingredient as well, and he cites the case of Olive Garden restaurants, where managers motivate staff by sharing with them letters from customers on how meaningful it was to celebrate an important family event at Olive Garden.

The paper, entitled "Leading with Meaning: Beneficiary Contact, Prosocial Impact, and the Performance Effects of Transformational Leadership" is in the April/May issue of the The Academy of Management Journal. This peer-reviewed publication is published every other month by the Academy, which, with more than 18,000 members in 103 countries, is the largest organization in the world devoted to management research and teaching. The Academy's other publications are the The Academy of Management Review, The Academy of Management Perspectives, and Academy of Management Learning and Education.
Media Coverage:
BusinessFinance. Turning Management Vision Into Employee Reality. (Friday, June 15, 2012)
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Financial Times. Customers can work magic on your staff. (Tuesday, June 26, 2012)
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Investor's Business Daily. Dig deep for inspiration. (Monday, June 25, 2012)
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