Leading like Hidden Champions

Steinbeis conducts research into more effective leadership

It is rare for traditional approaches such as annual target setting, incentive systems, or even personal pressure to fuel key success factors amongst employees like trust, loyalty, intrinsic motivation, or team spirit. Instead it takes transformational leadership skills, as practiced by highly successful companies such as small or medium-sized global leaders. The Institute for Management Innovation, a Steinbeis Transfer Center, has confirmed and validated such practices as part of an empirical study involving over 14,300 respondents.

“There’s a tendency among German companies, consultants, and staff training organizations to adopt new management models from the U.S. without really thinking about them or checking critically whether they work just as well in Germany,” asserts Prof. Dr. Waldemar Pelz, director of the Bad Soden-based Steinbeis Transfer Center. The aim of his study was therefore to develop a German version of transformational leadership. To do this, the Institute for Management Innovation (a Steinbeis Transfer Center) conducted preliminary face-to-face interviews with 34 managers of small and medium-sized global leaders. This was followed up by a further 153 written questionnaires among managers and based on these results, an online questionnaire was conducted with 14,348 respondents. The aim was to gain insights into two key questions: What specific skills and behaviors encountered in day-to-day management have the greatest impact on commercial success; what is the difference between successful and unsuccessful managers?

In the early 1970s, Frederick Smith, the founder of FedEx, was asked about the main reason for the success of his company. He named customer satisfaction – stating that this stems from employee satisfaction and that high revenues and growth rates are a natural consequence of that. Smith did not judge his managers primarily by how well they managed their budgets or supervised workers, but instead by how well they fulfill their management duties as perceived by their co-workers. The experience of the logistics company contributed to the international expansion of transformational leadership, both in theory and in practice. The social scientists Bernard Bass and Bruce Avolio developed a test that makes it possible to measure the concept of transformational leadership and empirically test its usefulness in practice.

There is general consensus in business that motivated and qualified employees are the key to the (commercial) success of a company. But what are the specific characteristics of such employees? They are loyal to the company and their boss, they continually improve their performance, they enjoy taking responsibility, they are disciplined, and they contribute to team spirit. But it is the behavior of their bosses that brings out these qualities. The reason for this is that the factor that has the biggest influence on employee behavior is a perception that they have a role model to look up to.

The required behavior of managers can be categorized into seven transformational leadership competences. How effectively managers practice these competences can be identified by looking at the reactions of their coworkers.

  1. Role model and trust To what extent do the personal goals, values, and convictions of the manager come across as genuine?
  2. Goals and prospects To what extent are employees prepared to perform and learn?
  3. Ability to learn; support Do employees have the necessary skills and resources to carry out their tasks independently?
  4. Communication and fairness Are interpersonal interactions based on values such as sincerity, openness, and transparency?
  5. Results orientation Do employees know what is expected of them and what the implications are if they do not meet expectations? To what extent is there an atmosphere of personal responsibility?
  6. Entrepreneurial attitude Do thinking and action revolve around opportunities and threats, and their commercial implications?
  7. Implementation strengths The most important attribute of transformational managers is their ability to translate goals, opportunities, and intentions into measurable outcomes.

When it comes to management behavior, people’s personal perceptions often differ from the perceptions of those around them. Many managers do not even realize how their behavior comes across to others and thus what impact this has on company culture. And without valid “diagnostics” it is not possible to work out the most effective measures to improve management culture. Two particularly successful diagnostic tools are employee surveys and 360° feedback exercises. These allow managers to assess themselves and get feedback on their behavior from the next up in line, as well as colleagues, co-workers, and in certain cases, external parties such as customers. There are many instances of companies using these diagnostic instruments but having bad experiences with them. This has generally been because non-validated questionnaires were used for the surveys. This is also an issue that was looked at by the Steinbeis experts when designing the questionnaire for their study.

Key success factors only deserve this name if they are typical for successful people and atypical for unsuccessful people. Based on this premise, Waldemar Pelz and his colleagues compared the most successful ten percent of respondents in the study with the least successful ten percent. Naming the top five behaviors of good managers, respondents said that colleagues:

  • help with the development of personal skills and prospects
  • boost self-confidence in achieving targets
  • ensure that interpersonal relationships are fair
  • create an atmosphere of “awareness of responsibilities”
  • make it clear how each individual can contribute to the company’s success

Managers that give positive responses to these questions make an important step toward the above-average (commercial) success of their organization. Managers can test their leadership and implementation skills for free on the German website: www.managementkompetenzen. de.


Prof. Dr. Waldemar Pelz
Institute for Management Innovation (Bad Soden am Taunus)

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