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Leadership is a significant contributor to what we like to call the "other bottom line" (i.e., corporate culture). Leaders are the principal architects of the corporate culture. More specifically, leaders show the way be setting a "tone at the top."
Leaders, through words and actions, send powerful messsages about "the way we do things around here." Leaders shape the culture by the practices they reward, by setting expectations for behavior, etc. From our perspective, it is an axiom that leadership drives organizational performance.
At ODC, we spend a lot of time working with our cilents on these kinds of issues. In doing so, we make the point that leaders are analogous to mechanics. Effective mechanics have toolboxes filled with many tools. Really good ones know how and when to use the tools. So, too, with leaders.
In an Information Age, leaders need to realize that it is the dynamic interplay between what they do internally (i.e., inside the company) and what goes on externally (i.e., in the marketplace) that dictates success. No practice occurs in isolation. Every action produces some reaction. Leaders who understand this and attend to it are likely to be more effective.