Impact of Leadership

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 After reading the article, answer the following questions. 

Does leadership impact organizational performance? How and why? 
Minimume 500 words

The impact of engaging leadership on performance, attitudes to work and wellbeing at work: A longitudinal study

Alimo-Metcalfe, BeverlyView ProfileAlban-Metcalfe, JohnBradley, MargaretView ProfileJeevi MariathasanSamele, ChiaraJournal of Health Organization and Management22.6 (2008): 586-98.

Leadership and culture

Earlier formal study of leadership can be seen to have passed through four more or less distinct stages, fromthe “trait” theories of the 1930-1950s, through the “behavioural” theories of the 1950-1960s and the”situational” and “contingency” theories of the 1960-1970s, to the models of distant, “heroic” leadership – based on being “visionary”, “charismatic” or “transformational” – of the 1980-1990s (e.g. [10] Bass, 1985; [24] House, 1977; [35] Sashkin, 1988). However, as the writings of [30] Mintzberg (1999), [17] Collins (2002), and [40] Tosi et al. (2004) and surveys undertaken in the current post-Enron, post-Worldcom era ([37] SirotaSurvey Intelligence, 2006; [39] Towers Perrin, 2005; [43] Watson Wyatt, 2006) point out only too clearly, we are now living in a “post-heroic” era, an era that is characterised by a much more inclusive, “engaging” styleof leadership. This sea-change in North American thinking coincided with the empirical research undertaken by [5], [6], [7] Alimo-Metcalfe and Alban-Metcalfe (2001, 2005, 2006) into the nature of leadership in UK local government and the NHS, using a “grounded theory” approach ([33] Parry, 1998). This research, which was inclusive with reference to gender, ethnicity and level in the organisation (Chief Executive to middle managers), was validated among 1,464 local government and 2,013 NHS managers and professionals at all levels. The initial research has subsequently been validated independently by the Home Office among 1,022 police officers and staff at all levels ([21] Dobby et al. , 2004) and in the private sector ([4] Alban-Metcalfe and Alimo-Metcalfe, 2007; [28] Kelly et al. , 2006).

The model that emerges is one of “nearby” leadership that reflects an “engaging” style of leadership.Engaging leadership is a style of leadership that shows itself in respect for others and concern for their development and well being; in the ability to unite different groups of stakeholders in developing a joint vision; in supporting a developmental culture; and in delegation of a kind that empowers and develops individuals’ potential, coupled with the encouragement of questioning and of thinking which is constructively critical as well as strategic.

Engaging leadership is based on integrity, openness and transparency, and genuinely valuing others, and their contributions, along with being able to resolve complex problems and to be decisive. It is essentially open-ended in nature, enabling organisations not only to cope with change, but also to be proactive in meeting the challenge of change. At all times behaviour is guided by ethical principles and the desire to co-create and co-own ways of working with others towards achieving a shared vision.

The product of engaging leadership has been defined as “a measure of the extent to which employees put discretionary effort into their work” ([39] Towers Perrin, 2005).

Clear links have now been established between certain kinds of leadership, particularly a “post-heroic”, “engaging” style of leadership, and both staff attitudes to work and their wellbeing at work (e.g. [1] Alban-Metcalfe and Alimo-Metcalfe, 2000a, [2] b; [15], [16] Borrill et al. , 2005a, b). However, what has so far been elusive has been evidence of a direct link between leadership and organizational performance. Thus, for example, while [16] Borrill et al. (2005b) reported statistically significant correlations between leadership and clinical governance ratings for education and training, risk management, and patient involvement, thecorrelations with trust star ratings and patient satisfaction were positive, but not statistically significant. Similarly, research undertaken by [18] Corrigan et al. (2000) also found a positive relationship betweenleadership style and mental health service users’ perceptions of the intervention programmes they had adopted.

At the same time, [34] Patterson et al. (2004) and [44] Xenikou and Simosi (2006) have found that attitudes to work, particularly job satisfaction, are the best predictors of organizational performance, measured in terms of productivity and profitability. There is also consistent evidence that overall organisational culture/climate is significantly correlated with work-related attitudes, such as job satisfaction, motivation, and organisational commitment, and performance (e.g. [32] Parker et al. , 2003; [34] Patterson et al. , 2004).

There is, however, much confusion in the literature about the nature and definition of “organisational culture” and “organisational climate”, and of the further concepts of “psychological climate” and “collective climate”. This suggests the need for consistency in the use of the terminology, particularly as many of these terms are used interchangeably ([9] Ashkanasy et al. , 2000; [32] Parker et al. , 2003). Organisational culture has been defined as, “A pattern of basic assumptions – invented, discovered, or developed by a group as it learns tocope with its problems of external adaptation and internal integration – that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those processes” ([36] Schein, 1985, p. 9). [19] Denison (1996, p. 624) suggests that “culture” “refers to the deep structures of organizations”, whereas “climate” is concerned mainly with “those aspectsof the social environment that are consciously perceived by organizational members”.

On the basis of meta-analytic study of 121 independent samples in which perceptions of climate were measured and analysed at the individual level, [32] Parker et al. (2003) concluded that the most valid analysis was the model proposed by [27] Jones and James (1979), for which there is factor analytic support ([26] James and Jones, 1989; [32] Parker et al. , 2003). This model identifies five reference points:

job characteristics;

role characteristics;

leadership characteristics;

work group and social environment characteristics;

organisation and subsystem characteristics.

According to [36] Schein (1985), leadership and culture can be thought of as “two sides of the same coin”; indeed, he goes so far as to assert that “the unique and essential function of leadership is the manipulationof the culture”. Kotter and Hesketh suggest that “only cultures that can help organisations anticipate and adapt to … change will be associated with superior performance over time” ([29] 1992, p. 44.) The same authors talk about an “adaptive culture”, a concept which can be equated to a “transformational culture” ([12] Bass and Avolio, 1993). They identified the assumptions underlying a culture that is adaptable as being: – that people are trustworthy and purposeful; that complex problems can be delegated to the lowest level possible; that mistakes can be the basis of doing a better job, rather than recrimination. Such a culture is further promoted by engaging leadership behaviours ([4] Alban-Metcalfe and Alimo-Metcalfe, 2007; [6] Alimo-Metcalfe and Alban-Metcalfe, 2005, [7] 2006).

The concept of “organisational capability” has been used by [38] Teece et al. (1997) to denote the specialist knowledge and intellectual property, understanding of how the organisation operates, and goal directed activities, that are geared to developing processes and systems. Such behaviour enables efficient and effective planning, and monitoring, so as to achieve agreed goals, both short-term and long-term. High levelsof organisational capability can lead to a degree of consistency within a team, department or organisation, thereby enabling staff to make day-to-day decisions and short-term predictions, with a measure ofconfidence. Organisational capability is essential to any organisation, enabling staff to undertake strategic planning, and in this way help to turn the vision of an organisation, department or team into a reality; in other words to be successful. This aspect of organizations might be expected to be influenced by the extentto which the leadership is competent, as distinct from transformational – competency being the “what” of leadership ([7] Alimo-Metcalfe and Alban-Metcalfe, 2006). Thus, it would appear that both aspects of leadership – being competent as well as being adopting an engaging style – are required for an effective individual, team, or organization.

The context in which this study was undertaken, was among mental health crisis resolution/home treatment teams (CRTs). The establishment of these teams marks shift towards community-oriented mental health care, rather than referring service users for in-patient care. In 2000, the Department of Health set a national target of reducing bed-occupancy by 30 per cent ([20] DH, 2000). Two defining characteristics of CRTs are:

they are multi-professional, including a psychiatrist, nursing staff, social workers, clinical psychologists, occupational therapist and physiotherapists;

the clinician is rarely the team lead. Teams vary in size from 10 to 30+ members, and operate 24/7 for 365 days a year.


This paper sets out, through a longitudinal study, to examine the extent to which quality of leadership, reflected in the way that staff perceive the “leadership culture/climate” and the “leadership capabilities” oftheir organisation, affects organizational performance. Organizational performance is assessed with referenceto staff attitudes to work and their sense of wellbeing at work, and the extent to which the organization meets performance goals. The organisation in question, was the Crisis Resolution Team. It is hypothesised:

– that a high quality of leadership will be positively associated with positive staff attitudes to work and theirwellbeing at work;

– that a high quality of leadership will be positively associated with achievement of organizational goals.


Leadership quality and staff attitudes to work and wellbeing at work were assessed using the “LeadershipClimate and Change Inventory” (LCCI)(TM) ([3] Alban-Metcalfe and Alimo-Metcalfe, 2003). This instrument assesses the quality of the distributed leadership of organisations or teams with reference to the extent towhich it involves both “engaging” and competent leadership behaviours. The first of these is referred to asthe “leadership culture”, the second as the “leadership capability”. The LCCI(TM) also includes 12 impactmeasures, which assess five “facets” of staff attitudes to work (job satisfaction; motivation to achieve; motivation to achieve beyond own expectations; job commitment; organisational commitment) and seven facets of wellbeing at work (fulfilment; self esteem; self-confidence; reduced job-related stress; reduced job-related exhaustion; team spirit; sense of team effectiveness).

The “leadership culture” items were derived from the “transformational leadership questionnaire” (TLQ)(TM) which assesses “engaging” leadership (e.g. [5], [6], [7] Alimo-Metcalfe and Alban-Metcalfe, 2001, 2005, 2006) (72 items), while the “leadership capabilities” items were derived from discussions with, and ratings ofimportance by, 35 managers and professionals working in the area of mental health, concerning the person-related and task-related (systems and processes) competencies required of a leader (34 items).

The LCCI(TM) was completed by a total of 731 staff working in mental health crisis resolution/home treatment teams in England. These teams, which operate on 24/7, 365 days a year are multi-professional, theprofessions involved being psychiatrists, nurses, social workers, psychologists, occupational therapists, physiotherapists, administrators. The team leader is rarely the psychiatrist.

Organizational performance was assessed in terms of meeting the government target of reducing bed occupancy. The performance criterion adopted was the ratio of assessments made by a CRT to the numberof referrals to in-patient care; the fewer the proportion of referrals, the greater the success.


Leadership quality

The sample was divided into two groups of n > 365, and an exploratory principal components factor analysisof the “culture” items for Group 1, with oblimin rotation, led to the emergence of three factors, which accounted for 59 per cent of shared variance. Following confirmatory analysis with Group 2, a similar structure emerged, which was confirmed for the combined sample. However, as factor 3, comprised only three items which were not readily interpretable, it was discarded. These were interpreted and the items used to form two “leadership culture” scales, which were labelled:

– “Engaging with others” – 16 items; α = 0.95, e.g. ” Empowering others by trusting them to take decisions”; “Involving all staff in developing the vision”;

– “Shared vision” – seven items; α = 0.90, e.g. “Inspiring external stakeholders by their passion”; “Being sensitive to the agenda of a wide range of external stakeholders”.

Corresponding analyses of the “capabilities” items resulted in the emergence of a single factor, one of which was concerned with individuals and relationships and the other with systems and processes. This was labelled:

“Leadership capability” – 14 items; α = 0.94, e.g. “Being able to make sense of different types of information so as to make meaningful comparisons and/or to identify patterns and trends”; “Establishing agreed standards of performance”; “Having well thought out systems and procedures which support effective use ofresources”.

Statistically significant relationships were detected between the leadership scales (r > 0.82), suggesting ahigh level of co-linearity.

Attitudes to work and wellbeing at work

Product-moment correlations were calculated, and stepwise multiple regression analyses were conducted, withthe three scales as independent variables and each of the impact measures as the dependent variable. Thecorrelation coefficients range from r = 0.42 (“engaging with others” × “a low level of job-related stress”) to r= 0.75 (“leadership capability” × “a strong sense of team effectiveness”).

Since at least six of these items (motivation; motivation to achieve beyond own expectations; job commitment, organisational commitment; job satisfaction; reduced stress) has been shown to be predicted by effective leadership behaviour (e.g. [1], [2] Alban-Metcalfe and Alimo-Metcalfe, 2000a, b; [11] Bass, 1998; [15] Borrill et al. , 2005a,b; [32] Parker et al. , 2003; [34] Patterson et al. , 2004), these results provide evidence of the concurrent validity of the LCCI(TM) among this population.

The results of the multiple regression analyses are presented in Table I [Figure omitted. See Article Image.].

Meeting performance indicators

In order to examine the relationship between leadership quality and performance, teams were divided into three groups: high, moderate, and low performers. One-way analyses of variance were conducted, followedpost hoc by Tukey’s HSB test (Table II [Figure omitted. See Article Image.]).

Statistically significant effects were detected only in the case of “Engaging with Others” (p =0.014). Thesource of these effects were significantly higher ratings of leadership quality by the staff in the high performing teams, compared with the moderate and low performing teams (p =0.037 and 0.02, respectively).


Leadership quality

Since at least six of these items (motivation; motivation to achieve beyond own expectations; job commitment, organisational commitment; job satisfaction; reduced stress) has been shown to be predicted by effective leadership behaviour (e.g. [1], [2] Alban-Metcalfe and Alimo-Metcalfe, 2000a,b; [11] Bass, 1998; [15], [16] Borrill et al. , 2005a,b; [32] Parker et al. , 2003; [34] Patterson et al. , 2004), these results provide evidence of the concurrent validity of the LCCI(TM) among this population.

Attitudes to work and wellbeing at work

The results here suggest that both of the “leadership culture” scales and the “leadership capability” scale were significantly correlated with each of the dependent variables (impact measures). The stepwise multiple regression analyses, however, resulted in the emergence of differential patterns of relationships. As shown in Table I [Figure omitted. See Article Image.], “Engaging with others”, was significantly related to each of thefive attitudes to work items and each of the seven facets of wellbeing at work items, while “Shared vision” was significantly related to two facets of Attitudes to Work (“A high level of motivation to achieve” and “Astrong sense of team effectiveness”), and to four aspects of wellbeing at work (“A high sense of fulfilment among staff” and “A high level of self esteem among staff”) and (“A low level of job-related stress” and “Alow level of job-related emotional exhaustion”).

Three facets of attitudes to work: – “A high level of job satisfaction”, “A high level of motivation to achieve”, “Staff who are motivated to achieve beyond their expectations”, and “Staff who are motivated to achieve beyond their expectations”, were significantly related to “leadership capability”, as was one aspect of wellbeing at work, “A high level of self-confidence”.

Within this context, what is perhaps most instructive is to note where significant relationships are absent. Thus, among the facets of attitudes to work, neither “shared vision” not “leadership capability” is significant predictor of either “commitment to the job” or “commitment to the organization”; indeed here, “shared vision” is only a significant predictor of “motivation to achieve”. Conversely, with regard to wellbeing at work, “shared vision” emerged as a significant predictor of five of the seven facets, the only non-significant links being with “self confidence” and “sense of team spirit”. On the other hand, “leadership capability” emerged only as a significant predictor of “self confidence” and “sense of team effectiveness”. In summary, “engagingwith others” was a significant predictor of all 12 facets, “shared vision” of six out of the 12, and “leadershipcapability” five out of the 12. Also, there was little overlap in the relationships involving “shared vision” and “leadership capability”.

The significant relationships with “engaging with others” are readily interpretable; where staff perceive the leadership as engaging with them by involving them in developing a shared vision, being loyal to them, supporting them through coaching and mentoring, by involving them in determining how to achieve the vision, positive attitudes to work and a sense of wellbeing at work are to be expected. Sadly, as the findings ofBass, Collins, Tosi et al. , and others testify, such behaviour is not always commonplace, and is, in some cases, rare.

The relationships involving “job satisfaction”, “motivation to achieve” and “motivation to achieve beyond expectations” are worthy of comment. Here, it would seem that these attitudes to work are affected optimally by a combination of concern for how staff are treated and leadership capabilities that include enabling staffto make sense of information as to identify patterns and trends, to work within agreed performanceparameters, and to use well thought out systems and procedures. Having clear systems, processes and guidelines enable staff to make predictions with a measure of confidence; a culture of engaging with staff engenders the antithesis of a “blame culture”, and creates one of adaptability, experimentation, learning and innovation.

Many aspects of wellbeing at work are associated not just with a sense of “engagement”, but alsoleadership that is, for example, an inspiration to external stakeholders, and a culture in which staff are themselves encouraged to think strategically. Thus, “shared vision” is a significant predictor of “fulfilment” and “self esteem”, “reduced stress” and “reduced emotional exhaustion”, and a “sense of team effectiveness”. Interestingly, a reduction in “job-related stress” does not emerge as being as strongly linkedto “engaging with others”, as one might expect. Rather, it tends to be reduced when the culture also incorporates a sense of vision.

Overall, results are consistent with the hypothesis 1, that “leadership culture” and “leadership capability” must both be taken into consideration if the effect of leadership on staff is fully to be explained and understood. However, by far and away the greatest single influence are behaviours involved in “engagingwith others”.

Meeting performance indicators

The results presented here provide, for the first time, evidence of a direct predictive link between certain kinds of leadership behaviour and the successful achievement of an externally imposed performanceindicator. In this case, the performance indicator was a Department of Health target of reducing bed occupancy by services users in the area of mental health.

The evidence is that leadership quality is a significant predictor of goal achievement and that this quality is one of “engaging” leadership. This is consonant with what the [37] Sirota Intelligence Survey (2006) and [40] Tosi et al. (2004) reported, and with the [39] Towers Perrin (2005) definition of the product of engaging leadership.

The leadership competencies debate

It is also important to note that leadership competencies (or “capabilities”) did not predict organisationalperformance. This has serious implications for the NHS and other organisations that believe that leadershipcan be represented purely by competencies. Indeed, there is increasing criticism in the literature of thesimplicity and naivety of assuming that by being competent in a rage of leadership activities is sufficient for harnessing the collective efforts of individuals ([8] Alimo-Metcalfe and Alban-Metcalfe, 2008a; [14] Bolden and Gosling, 2006), and the US ([23] Hollenbeck et al. , 2006). Bolden and Gosling cite various researchers who have pointed out that:

– the competency approach has been criticised for being overly reductionist, fragmenting the role of themanager (or leader), rather than presenting an integrated whole;

– competencies are frequently overly universalistic or generic, assuming that they are the same, no matter what the nature of the situation, individual or task;

– competencies focus on past or current performance, rather than future requirements, thereby reinforcing rather than challenging traditional ways of thinking;

– competencies tend to focus on measurable behaviours and outcomes to the exclusion of more subtle qualities, interactions and situational factors.

They go on to comment that, “This expansion of the concept of competencies raises further concerns becauseof its tendency to disguise and embed rather than expose and challenge certain assumptions about thenature and work of leadership.”

From a US perspective, Hollenbeck and colleagues ([23] Hollenbeck et al. , 2006) criticised what they saw asthe flawed assumptions upon which the competency approach is based. Thus they commented, that, “as adescendent of the long-discredited ‘great man’ theory, competency models raise again the spectre of one setof traits, abilities, and behaviours … that make up the ‘great leader'”; that effective leaders are not the sumof a set of competencies, and that the research demonstrates that “what matters is not a person’s sum score on a set of competencies, but how well [or as we would put it, in what way ] a person uses what talents he or she has to get the job done”. Hollenbeck and colleagues concluded that, “… we see little evidence that these systems, in place for years now, are producing more and better leaders in organizations”. Indeed, most competency frameworks are singularly characterised by a lack of empirical evidence of their concurrent or predictive validity.

In addition, it can be argued that the competency approach “… reinforces a focus on the individual ‘leader’, while restricting consideration of ‘leadership’ as a distributed relational process” (e.g. [8] Alimo-Metcalfe and Alban-Metcalfe, 2008a; [14] Bolden and Gosling, 2006; [25] Jackson, 2004).

Given that the teams studied were similar to many others teams working in the public and private sectors in that:

– they are multi-professional in composition;

– they operate 24/7, 365 days a year; and

– they often work in conditions where “crises” are commonplace events; and

– the environment is one of dealing with complex change, the findings are likely to be generalisable to other groups of workers in both of these sectors.

Equally, whereas it has been suggested that good leadership should be linked to organisationalperformance, what the present study shows is the need to specify which kinds of leadership behaviour are effective, and to recognise that some kinds of leadership behaviour may not be effective, or may indeed be counter-productive.


Despite record investment in the National Health Service by the UK Government over the last decade or so, its performance is regarded as disappointing ([42] Wanless, 2002). This means that there is little doubt that it will remain the focus of increased scrutiny by politicians. Judging by their earlier behaviour, they will attemptto maintain control via the use of targets, audits and reviews, despite the fact that such a regime has led to a reduced sense of self-efficacy and self-confidence in their leadership capacity by NHS chief executives ([13] Blackler, 2006) – the very people needed to create the appropriate culture that will support increased organisational effectiveness. If this were not enough pressure on leaders and staff in the NHS, it should also be noted that the levels of stress of staff in the NHS have been found to be at a worryingly high level, such that a longitudinal study of around 11,000 staff across all occupational groups, concluded that “probably about 27 per cent of staff in the NHS are minor psychiatric cases” ([41] Wall et al. , 1997), with managers obtainingthe highest levels.

Thus, a major challenge for the NHS, as with any organisation – public, private, or third sector – is “How can we increase individual’s performance, while maintaining their wellbeing, and motivation?” This was thequestion examined in this longitudinal study. The findings suggest that creating a culture of engaging leadership is critical, since it not only predicts the performance of teams, it also predicts a range of positive affective outcomes, including high levels of motivation, job satisfaction, job and organisational commitment, as well as wellbeing indicators, including high levels of fulfilment, self-esteem, self-confidence, and reduced levelsof stress and emotional exhaustion.

There are serious implications from these findings for politicians and policy makers, not least of which is tostay away from interfering with how those responsible for leading NHS organisations, and teams at all levels, should achieve their objectives.

The lesson for formally designated leaders, whatever their level in the organisation, is to enact their role in away that increase engagement. An engaging leader may be defined as someone who encourages and enablesthe development of an organisation that is characterised by a culture based on integrity, openness and transparency, and the genuine valuing of others and of their contributions.

This shows itself in concern for the development and wellbeing of others, in the ability to unite different groups of stakeholders in articulating a shared vision, and in delegation of a kind that empowers and develops potential, coupled with the encouragement of questioning and of thinking which is critical as well as strategic ([8] Alimo-Metcalfe and Alban-Metcalfe, 2008).

Engaging leadership enables organisations not only to cope with change, but also to be proactive in shaping their future. It is at all times guided by ethical principles and the desire to co-create and co-own ways ofworking with others towards a shared vision.

This research was funded by the NHS SDO, grant number SDO/22/2002.


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Further Reading

22. Gordon, G.G. and DiTomaso, N. (1992), “Predicting organizational performance from organizational culture”, Journal of Management Studies, Vol. 29 No. 6, pp. 783-98.

31. Northouse, P. (2004), Leadership, 3rd ed., Sage, London.


Corresponding author

John Alban-Metcalfe can be contacted at:


Beverly Alimo-Metcalfe, University of Bradford School of Management, Bradford, UK and Real World Group, Leeds, UK

John Alban-Metcalfe, Real World Group, Leeds, UK

Margaret Bradley, Real World Group, Leeds, UK

Jeevi Mariathasan, Sainsbury Centre for Mental Health, King’s College London, London, UK

Chiara Samele, Sainsbury Centre for Mental Health, King’s College London, London, UK


Table I: Multiple regression of leadership scales against staff attitudes to work and wellbeing at work, for whole sample

Table II: Means and standard deviation of leadership scores in relation to the ratio of assessments toreferrals for admission to in-patient care for high, moderate and low performing teams

Word count: 5364

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Health care industry;
Job satisfaction;
Employee attitude;
Correlation analysis


The impact of engaging leadership on performance, attitudes to work andwellbeing at work: A longitudinal study







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