The Leadership Value Chain

Abstract

There is little question that leadership is vital to organizational effectiveness; however, there is a lack of comprehensive models of the processes and intervening factors that explain the link between individual leaders and organizational performance. This article concerns an evidence-based framework, the leadership value chain, that traces the characteristics of individual leaders to their leadership style; leadership style to effect on team and unit processes; team and unit processes to team and unit results; and team and unit results to effectiveness across a broad range of organizational-level performance measures. The point of the leadership value chain is to identify the sequence of key variables and considerations that relate individual leaders to organizational effectiveness. Of all the things to consider, these are the things that must be considered to determine the value of leadership. The authors use examples to show how this framework can provide a heuristic for thinking strategically about key leadership investment decisions and organizational development interventions.