Adapt your leadership style, but stay authentic
Authentic and situational leadership may look incompatible. They’re not – if you know what must remain fixed, and what can flex to meet the demands of your role and situation....
Leadership
Why great leaders focus on ‘double ROI’
Successful companies realize that financial performance and long-term impact are not competing priorities, says Shelley Zalis.
Rapid read:
- Financial performance and long-term impact reinforce each other through trust, talent, innovation, and strong relationships.
- Quarterly results capture only part of a leader’s contribution; investments that create lasting advantage require patience.
- Leaders should broaden performance measures, integrate impact into strategy, and invest before outcomes are certain.
Throughout my career, I’ve noticed that the leaders who build enduring organizations ask different questions than those focused only on the next quarter. They care about revenue, profitability, and shareholder value, but they also ask whether today’s decisions are creating lasting value. I call this “double ROI”: return on investment and return on impact.
That distinction matters because the investments that create the greatest competitive advantage rarely deliver their full return overnight. Developing future leaders, earning customer trust, strengthening supplier relationships, investing in innovation, and creating opportunities for people all take time. Yet these are often the investments that determine whether a company continues to grow after competitors have plateaued.
For too long, we’ve treated financial performance and business impact as separate conversations. The strongest organizations understand they’re connected. Trust, talent, innovation, resilient partnerships, and culture are part of how sustainable growth is created.
Reach new heights
Leadership programs
Develop key leadership capabilities and accelerate your impact as a leader
Companies that consistently outperform do more than build better products; they become organizations people want to work for, buy from, invest in, and partner with. Trust strengthens customer loyalty, employee growth fuels innovation, and strong supplier relationships create resilience. Together, these advantages become competitive assets. We see this philosophy in action across different companies:
- Under Satya Nadella, Microsoft made culture a priority, emphasizing learning, empathy, and collaboration alongside its transformation in cloud and AI. The result? A cultural shift and an extraordinary period of innovation and growth.
- Patagonia embedded environmental responsibility in the way it operates, from supply chain and product decisions to a commitment to donate 1% of sales to environmental causes. Its purpose has become part of the value customers associate with the brand.
- Unilever, guided by former CEO Paul Polman, championed a longer-term approach to growth that connected performance with responsible sourcing and sustainability. Today, Unilever’s long-term leadership incentive structure combines financial measures with a Sustainability Progress Index covering climate, nature, plastics, and livelihoods.
Many leadership systems still reward short-term outcomes, even though long-term decisions determine long-term success. Quarterly results matter, but they tell only part of the story. Investments in talent, new markets, technology, supply chains, and trusted partnerships require patience before their full value becomes visible.
That means we should broaden how we evaluate leadership. Leaders should be accountable for whether they are leaving the organization stronger than they found it. Here are five ways to build double ROI:
- Measure what matters. Complement financial metrics with indicators of long-term health, including customer loyalty, talent development, innovation, trust, and resilience.
- Evaluate leaders beyond quarterly results. Measure not only what leaders deliver today, but what they’re building for tomorrow.
- Integrate impact into strategy. Don’t put growth and impact into separate conversations. The strongest strategies create value for customers, employees, partners, communities, and shareholders together.
- Invest before certainty exists. Transformational growth requires leaders willing to invest in people, technology, partnerships, and opportunities before the outcome is guaranteed.
- Build advantage over time. Trust, talent, innovation, and strong relationships become increasingly valuable as organizations invest in them consistently.
Authors
Related
AI is everywhere – where are the profits?
Companies are spending billions on artificial intelligence. But are they making any money from it? IMD's Karl Schmedders on hidden costs, vibe coding and how companies can turn AI into business value....
What does it take to challenge the impossible?
Physician and Paralympian William Tan on why a winning performance should serve a greater purpose....
Aikido’s lessons in conflict resolution
When we face resistance, the instinct is to fight back. Chip Bond and Francesca-Giulia Mereu explain how aikido can help leaders turn pushback into collaboration....
Audio available
Learn Brain Circuits
Join us for daily exercises focusing on issues from team building to developing an actionable sustainability plan to personal development. Go on - they only take five minutes.
Explore Leadership
What makes a great leader? Do you need charisma? How do you inspire your team? Our experts offer actionable insights through first-person narratives, behind-the-scenes interviews and The Help Desk.
Join Membership
Log in here to join in the conversation with the I by IMD community. Your subscription grants you access to the quarterly magazine plus daily articles, videos, podcasts and learning exercises.