What leaders in high-performing organizations do differently

While few would question the importance of leadership in driving business performance, it can be more challenging to assess exactly how much of a difference effective leaders make and what distinguishes leaders in high-performing organizations.

Willis Towers Watson research on high-performing organizations can help us address these questions.

High- performing organizations are defined as companies whose financial performance, such as profit, return on invested capital and earnings per share, exceeds their global industry for at least three years running, and that deliver an exceptional employee experience, as assessed primarily through employee surveys.

A recently completed Willis Towers Watson analysis of these companies sought to examine what differentiates high-performing organizations from the “rest of the pack” and specifically, how important leadership is to these organizations. After assessing the importance of a wide range of factors influencing organizational effectiveness and the employee experience, leadership – more precisely, senior leadership – emerged as the strongest differentiator of high-performing organizations.

In examining the employee survey scores of 500 organizations globally, our findings show that high- performing companies scored 13 points higher than the others in the area of leadership. Other strategic areas where these companies distinguished themselves include image and competitiveness of the organization (+11%), communication (+10%), career development (+10%) and customer focus (+ 9%).

These results prompt the question: what does it take to be an effective leader in a high- performing organization? Leaders in these organizations put in place the following building blocks to develop an exceptional employee experience:

• A strong sense of purpose. Employees must believe in where they are going, and therefore, in the company’s strategy and vision. And they must understand how they fit in and contribute.

• Connections and trust with people. Leaders must inspire employees. It is essential that they create a culture aligned to the business strategy, as well as highperforming, diverse and inclusive teams in which trust is a hallmark. Senior leaders also ensure that managers understand their role in supporting employees.

• Great work in a thriving business. Employees must be inspired to do great work for customers, and deliver results, making best use of their skills and abilities.

• Opportunities for growth and rewards. It is critical that employees understand their career options and development opportunities, and be motivated by appropriate rewards, both formal and informal elements of their Total Rewards program.

Underlying these building blocks is a foundation of organizational effectiveness. The elements associated with effectiveness, while not a large differentiator of performance per se, are necessary to have in place to achieve excellence.

The following are the foundational effectiveness elements as revealed in our research along with the magnitude of difference in the employee survey scores of high-performing organizations and others generally. • Supervision (+4% in high-performing organizations) • Work tools and conditions (+4%) • Workload and work-life balance (+3%) • Operating efficiency (+2%) • Pay (+2%) Leaders in high- performing companies ensure that their employees have supportive managers, a balanced workload and flexibility, fair pay as well as the tools and resources critical to a productive work environment. These elements alone are not likely to create a highperforming organization or deliver an outstanding employee experience. But getting the effectiveness foundation wrong could cause real issues and prevent a company from becoming a high- performing organization.

Our research clearly shows that the path to high performance starts with effective leadership. Senior leaders play a critical role in putting in place the building blocks of a high value employee experience. And, they ensure that the foundational elements that drive organizational effectiveness are prioritized. Leadership also establish the organizational context — the purpose, connections and trust — in which immediate managers or supervisors can deliver an effective experience through alignment, enablement and delivering a differentiated value proposition.

It is this combination of factors — rather than any in isolation — that truly differentiates the best from the rest.