What exactly is servant leadership? Does it work? Can you be a servant leader and still be profitable? The answers to these questions are pretty simple: a leadership style, yes, and yes. All joking aside, here is the lowdown on these questions.
Servant leadership is style of leadership that puts people before process. It's a style the focuses on developing people, which requires several specific characteristics: empathy, listening, healing, foresight, and stewardship, to name a few. With these skills, and a desire to develop people, a leader can have a major impact on people and on the business. How bit an impact on the business? Let's look at some data.
A recent study (Giolito, 2019) of 55 similar stores of one company were looked at. In general, within this company, the average growth of stores was negative. Yet of the 22 stores that were profitable, 18 had leaders who scored above average on servant leadership.
Cheryl Bachelder’s book Dare to Serve explains how she and her team improved Popeye's Louisiana Kitchen restaurant chain using servant leadership. She shares that when she took over Popeye’s Louisiana Kitchen, its stock was at $13 a share. After implementing servant leadership, Popeye’s had amazing results. When Bachelder left after eight years at the helm, Popeye’s had had eight years of strong growth. Average restaurant sales grew by 45%. Market share grew from 14% to 24%. Restaurant profit margins rose from 18% to 24%. And, Popeye’s stock was at $61 per share.
Finally, an earlier study by Sipe and Frick (2009) found similar results. They conducted a study looking at stock performance of servant led versus other companies performance over a 10 year period. The stocks from the 500 largest public companies averaged around 11 percent pre-tax portfolio return. The 11 companies studied by Jim Collins for his book, “Good to Great” averaged 17.5 percent return in that same time period. The companies that Sipe and Frick studied however, averaged around 24 percent. And there are more examples. Ever hear of Southwest Airlines? Toro Industries? Starbucks? All are examples of high-performing, results oriented organizations that are servant-led.
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