Organisations with great leaders are more profitable and successful – staggeringly so – than organisations with poor leaders according to research recently released by the Ministry of Economic Development.

Shifting up just one point on the Management Capability Index, which indexes a company’s leadership performance, translates to an estimated $46,000 increase in profit per employee, 17% increase in sales and staff retention lifting by 30%.

The findings aren’t new; there’s a plethora of international research showing a strong correlation between good employee communication and profitability, and leadership and profitability.

What’s great about this research is that it shows the benefits of good leadership for us Kiwis, and provides a benchmark to measure ourselves against.

It also reinforces the benefits of investing in developing our leaders.

One of my favourite quotes is: “Leadership is a lonely job; after all you can’t lead from behind,” (Maggie Thatcher). It’s very true – and it’s also what makes leadership so hard.

Leaders from time to time must make tough calls. They also make mistakes. What sets exceptional leaders apart is that they learn from their mistakes. They also apologise; always front up to explain (not justify) the hard calls, and they’re prepared to listen.

Developing great leaders requires a big investment - by businesses investing money in their leaders and leaders investing time in themselves.

One of the quickest wins for improving leadership ability is developing communication skills. In my experience, all great leaders have great communication skills - and, I don’t mean great orators but people talented in keeping in touch, having coaching conversations, articulating their expectations and not shying away from tough conversations.

A longer-term goal should be to learn the art of story telling. Sharing stories and anecdotes is a powerful way to create a shared sense of purpose, reinforce values and remind your people of the things that really matter.

Learning from mistakes really matter and I’ve seen how a skilled leader can transform error into empowerment for everyone. In dealing with a team mistake, a Chief Executive I know used his own early career ‘mistake’ story to reflect on why he was now disappointed in them and to reinforce the qualities he wanted from them. His team was left feeling disappointed in themselves but empowered to do better.

Leadership isn’t easy; it’s a journey requiring time and investment - particularly from the aspiring leader.

And most importantly, it requires an authenticity – a commitment to be who you are, to be your absolute best and to see and nurture potential in your people.

Read the research.