How can leaders maximize their impact? Scientists give an interesting insight on Insead’s Knowledge website: They start out with the example of a leading supermarket chain in an eastern European Union country that feared an eight percent drop in sales as discounting giant Lidl was about to enter its market.

With the help of researchers, they started out addressing the costly personnel turnover problem. Selected store managers received a letter from top management, encouraging them to do something about the 90 percent yearly staff turnover. They managed to indeed lower the monthly quit rate by 20 to 30 percent. However, other performance metrics like sales and value of perished food didn’t improve. The explanation for this was easily found as store managers focused more on HR issues, they spent less time interacting with customers (to increase sales) and dealing with the flow of goods (to reduce food wastage).

According to the Insead article, the firm still had many advantages as they were able to reduce hiring and training costs. This was estimated at a minimum of 400 euros per head. However, at the store level, the data showed that it was almost impossible for a single manager to cover all different areas.

This shows how important it is to distribute leadership. “Before leadership can be distributed, managers must become well acquainted with their own strengths and weaknesses so they can seek out people whose skills complement their own,” the article states. The researchers are supporting this process with the help of a new feedback tool called x360.

In their article they conclude that in terms of the impact that a leader has on his or her corporation and staff, people effectiveness is one major way to have an impact. Motivating a team, exciting them to meet challenges, building trust and keeping them satisfied combined with a focus on money and customers also contribute to the impact, a leader makes.

Read more on knowledge.insead.edu