Saturday, September 10, 2011

Poor Leadership Costs Average Organization Over $1 Million Dollars Year

A new white paper from The Ken Blanchard Companies shows that poor leadership is costing the average company an amount equal to 7% of their annual revenue. That's over a million dollars a year for any organization with $15 million dollars or more in annual sales.
The three big culprits?
  1. Employee turnover. Poor leadership is responsible for up to 30% of the reasons why people leave their organizations according to exit interviews conducted by The Saratoga Institute.
  2. Customer turnover. Poor leadership negatively impacts employee satisfaction, which in turn negatively impacts customer satisfaction and retention. Research published in Harvard Business Review calculated that every 5 point change in employee satisfaction scores caused a 1.3 point change in customer satisfaction scores.
  3. Employee productivity.  Poor leadership leads to poor employee productivity.  Research from Blanchard shows that direct report productivity can be improved 5-12% through better management practices.

No comments: