We remember wartime prime ministers and presidents better than peacetime leaders, and the same is true for company executives.
Organizational leadership matters most during a period of stress and uncertainty.
This conclusion emerges from a recent study of 48 firms among the Fortune 500 largest U.S. manufacturers. The researchers also assessed the extent to which the firms face environments that are dynamic, risky, and uncertain. Taking into account a company's size, sector, and other factors, they find that these CEO leadership qualities make a significant difference in the firm's net profit margins when the company is facing a highly uncertain environment. When the firm is not so challenged, however, such leadership qualities make far less of a difference. Several practical implications follow.