The ROI of servant leadership

Servant leadership is more than just a feel-good measure. Let’s take a look at the ten core principles of servant leadership. They are as follows: listening, empathy, healing, awareness, persuasion, conceptualization, foresight, stewardship, commitment to people, and building community.

The traditional case for servant leadership is that it has the power to create outstanding work cultures and keep employees happy, which is true! If you want to help your people feel appreciated and keep them happy working for your organization, then standardizing the practice of the ten core principles of servant leadership is one of the best action steps available to you.

The statistics

The benefits to servant leadership don’t stop there, and they go far beyond the intangibles. As a matter of fact, practicing servant leadership has been repeatedly statistically proven to improve organizational performance on multiple fronts. Let’s look at the impact.

A study conducted by Dr. James Lemoine, an associate professor of organization and human resources at the University of Buffalo School of Management, found that exposure to servant leadership enabled people to make more well-thought out and “other-oriented” decisions. He further found that a one-point increase in servant leadership exposure on a seven-point scale translated to a $11.3 million dollar increase in revenue for an organization.

In another study on servant leadership led by Dr. Lemoine, he found that servant-led businesses generate good will among their communities and increase their willingness and ability to support them.

Magellan Executive Resources found that servant led-companies averaged 24.2% pretax portfolio returns over a decade-long period of time, compared to an average of 10.8% reported by the 500 largest companies in the world.

Servant leadership creates engaged employees. And engaged employees are good for the bottom line. Gallup found that organizations with highly engaged employees generate 147% higher earnings per share when compared against competitors.

Servant leadership has been proven to yield a 6% increase in overall team performance, an 8% increase in customer service performance, 50% better employee retention rates, and a whopping 83% increase in job satisfaction.

The bottom line

As a general rule of thumb, it’s safe to assume that servant leadership will generate substantial returns for your organization. An organization’s greatest asset is always its people. By investing in people through servant leadership, leaders stand to create a mutually beneficial environment. Under servant leadership, employees make better decisions, perform better, and generate more revenue for the organizations that they work for. In return, they are far more likely to be engaged with their work and stick around for the long run.