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Leadership Climate: Employees Hold the Key to Developing Your Leaders

August 23, 2019


“If the [organisational] conditions are wrong, we are forced to expend our own time and energy to protect ourselves from each other, and that inherently weakens the organisation…”

The above quote comes from Simon Sinek’s fantastic TED talk on “good leaders make you feel safe,” in which Simon cuts to the heart of what differentiates great leaders and how they create successful organisations. In a nutshell, great leaders create an organisational tone that facilitates remarkable employees doing remarkable things.

How does it feel to work around here?

At PSI, this is precisely what we mean by leadership climate. Each leader and organisation will create their own climate – this can be thought of as the "shadow you cast" or "tone you set" as a leader. Think back to a time when your boss entered the room and it was immediately obvious they were having a fantastic, or contrastingly, an awful day. What happened to the atmosphere in the room? That tangible change you experienced is leadership climate!

Moving leadership from "me" to "we"

Great leadership is arguably the most sought after qualities of all human behaviours. I believe that the current thinking around what great leadership is shows real progression. Long gone are "Great Man" theories that focus on the innate traits of a leader and in their place now resides new acknowledgments that:

  • Great leadership comes in all shapes and sizes

  • Great leadership adapts its style to fit the context and personalities involved

  • Great leadership is not a property of one individual, but exists in the interactions between leaders and the relationships they create.

However, these insights currently outstrip our rate of progress in measuring leadership; competency frameworks, KSAs, and psychometric assessments return leadership to being the sole product of an individual. It is without question that leaders need task-based competence, but for an organisation to really thrive, it is just as important for their leaders to have an understanding of how they make their employees feel.

Read more: Organizations Thrive When Leaders Trust Their Employees

By moving from analysing the individual to measuring the group experience, we unlock the human emotion behind organisational success.

Leadership-Climate-flow-diagramEvidence to support how vital leadership climate is comes from academic research and business research. Academically, it has been shown that:

  • Leadership climate directly impacts employee self-efficacy (1)

  • Leadership climate drives group engagement (2)

  • Leadership climate predicts organisational performance (3).

Earlier this year, PSI conducted an internal review of all the data collected using the Leadership Climate Indicator. Importantly, the results showed that employees working in the top 10% of positive leadership climates reported being four times more engaged.

How leadership climate is being applied

PSI is working with a number of organisations to measure and develop leadership climates in order to:

  1. Create the right culture – bench-marking and tracking changes in leadership climate over time enables our clients to target interventions strategically and help embed a thriving and sustainable organisational culture.

  1. Engage senior leaders – it is not uncommon for senior individuals in organisations to brush off feedback due to seniority. By measuring the climate created by a leader or a leadership team, we are able to cut through the noise and provide a direct link between the climate leaders create and the impact it has on employees. 

  1. Build competitive advantage – in the current business environment, many of our clients share two features: their staff are stretched and they are experiencing near-constant change. Only by creating a working environment where employees feel safe and happy can we get to the bottom line benefits of an engaged and open workforce.

To complete the quote at the beginning of this article: “…when we feel safe inside the organisation, we will naturally combine our talents and our strengths and work tirelessly to face the dangers outside and seize the opportunities” – and isn’t that what every organisation wants?

resilient leaders in business

Peter Clarke Peter Clarke is Head of Product Consulting for PSI Talent Management International. He loves the deep focus on the individual and using that understanding to develop their personal performance, contributions to the team, and the ultimate impact this has on the climate and feel of the organisation. Peter also loves seeing how supporting people with their Emotional Intelligence helps people be present, engaged and be happier in work and home lives.