The Link Between Servant Leadership and Profitability

an illustration of two #1 foam fingers in the air to cheer on servant leadership.

You can find definitions all over the internet and countless books that explain how managers can take on the characteristics of a servant leader. The idea of putting someone else’s needs before your own isn’t new, but it can be rare to see in a traditional corporate setting. Climbing the corporate ladder and putting their career first, may be beneficial for the individual, but implementing servant leadership is beneficial for the entire organization. In this article, we’ll explore a few of the most common advantages that servant leadership can provide an organization.

Diverse solutions.

Without servant leadership, employees don’t feel like their work, ideas, or presence are valued at their organization. In fact, according to SHRM, nearly one in four employees dread going to work each day. They don’t feel safe voicing their opinions about work-related issues, and they don’t feel respected/valued at work. 

When leaders embrace servanthood in their management style, team members are more likely to feel supported and confident. Employees are more likely to speak up in meetings and confidently share their ideas and solutions with their managers and company leadership. These ideas can spur new and innovative solutions that an organization’s decision-makers might not have considered. 

Pro tip: According to Mike Hunigan, VP of Product at Capacity, it’s important to give your team time and space to bring these ideas to the table. It isn’t always enough to say “what do you think?” At Capacity, one of the most effective ways to pull ideas from the most brilliant minds starts with how we ask for feedback. We always start with “How might we?” It seems innocuous enough, but this simple kickstarter gives our team members a way to ideate without them feeling like they are put on the spot. 

“As a product manager, it’s easy to come into a meeting and say do this, this, and only this,” explained Mike. “Over 10 years ago, I was given the opportunity to become a product manager. It was an exciting time. I believed thinking that I knew all of the answers was the key to a product’s success. Many people have read about how Steve Jobs would barge into someone’s cube and unplug an engineer’s computer (whilst losing all of their work) and say “you’re now working on the Mac.” I thought this was the blueprint to how a successful product manager drove results. I was wrong. It didn’t fit the culture of the midwest tech-startup.”

I realized that my team was made of subject matter experts. They’ve attained their position, from hard work, experience, and ultimately knowing what the hell they’re talking about. I went from “do this” to “how might we do this” and the discussions and planning sessions took on a much more engaging tone. Instead of only understanding why we’re taking the journey, we can now build better software that is created faster with less defects.” said Mike. 

More cohesive work.

Every organization is different. Regardless of the size of the organization, servant leadership means management of all levels is focused on supporting work of all sorts from all different levels that match the company’s core values. The more this narrative is spread across the organization, the more employees are likely to get on board and work towards a similar goal. According to IBM, 80% of employees felt more engaged when their work was consistent with the core values and mission of their organization.

Pro tip: Make your company’s core values well known. Every quarter, the Capacity leadership team goes over KPIs, goals, and action items that each team is responsible for in achieving this goal. At the end of this time, everyone is in alignment and ready to execute or ask necessary questions regarding the next steps. 

Added productivity.

Helping teams do their best work is our mission statement at Capacity, so we’re all about adding productivity to a person’s day. Being a servant leader is a great way to increase the quality and quantity of work at an organization. According to a study from Reward Gateway, 70% of employees say that motivation and morale would improve “massively” with managers saying “thank you” more. 

If just saying “thank you” can increase motivation by 70%, it’s easy to imagine how your team’s output will soar when you make the needs of your team your priority. In another survey by EY, it was proven that workers are more motivated, engaged, productive, and 3.5 times more likely to contribute fully and innovatively to reach their potential when they feel like they belong. 

Pro tip: At Capacity, we use Slack to collaborate, and we have a dedicated “Shoutouts” channel. In this channel, we publicly thank team members for going above and beyond. Everyone enjoys getting a shoutout from time to time, and it also builds camaraderie throughout the entire org. Without this channel, someone on the Sales team might not even know of the heroic effort that went into a new product feature by members of the Engineering Team. Seeing the positivity in this channel motivates the entire organization. 

Increased servanthood.

We’ve all heard the old sayings that positivity rubs off on others and that smiles are contagious. The same goes for servanthood. By serving others and making them feel welcomed and supported, they’ll want to reciprocate the same thing to their coworkers. The more teammates serve one another in your organization, the better experience your employees will have! According to IBM, organizations that score in the top 25% on employee experience report that they see nearly three times the return on assets as those in the bottom quarter.

To reiterate, servant leadership can be extremely valuable to an organization. As long as you have the right mindset, there’s no limit to what your organization can accomplish.

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