Briefing talks to Vincent Giolito from Emlyon Business School about ‘servant leadership’

For a long time, ‘servant leaders’ – managers who put themselves at the service of their teams, rather than the other way around – have been known to impact company morale positively through their effective people management.

Servant leaders are characterised by their caring for each individual employee and those people’s career paths and livelihoods. They empower employees, put them first, help them to grow and succeed, and behave ethically and morally. Research has shown that these elements make employees want to work for the organisation, as they feel valued and appreciated at work.

However, it is often questioned whether servant leaders might improve morale to the detriment of company profit. There has always been the suspicion that servant leaders may be too ‘nice’ to their teams, which could be at the company’s expense.

Along with a number of other international academics from the University of Illinois, the Rotterdam School of Management, Erasmus University, and the University of Auckland, I therefore decided to evaluate whether servant leadership was a positive for employees, but not for the business’s sales and profit. In a study of 485 respondents working in 55 similar stores within a single company across a large metropolitan area in France, we linked the type of leadership at each store to growth in sales and, most importantly, profit. We actually found that servant leadership influenced employee morale and wellbeing and had a positive impact on company profits too, even in the midst of a crisis. In fact, while only 22 of the 55 stores in our sample achieved positive profit growth, 18 of those 22 successful stores had managers rated above average for servant leadership.

The link between servant leadership and a boost in company profit is one that had yet to be found robustly in research. It certainly debunks previous doubts about servant leadership. Not only is servant leadership good for people management and employee morale – it also has a positive impact on company performance, measured by growth in sales and profit.

Following this research, we would advise that more managers consider acting in line with the servant-leadership model – being at the service of their employees. Indeed, this investigation demonstrates that servant leadership positively impacts all financial indicators, making it beneficial for all stakeholders, including company shareholders. By showing servant leadership as conducive to profit, we may help to resolve a fundamental tension that can exist between employees and shareholders. It’s clear that the notion ‘people over profit’ is not in fact mutually exclusive, and by focusing on people you can in turn boost profit too.

This article was taken from Briefing November/December 2020 – Alert to change. Read the full publication here.