Improved Leadership. Competitive Advantage.

The domain of corporate finance has taught us to pay very close attention to ratios—financial ratios that is, ROA, ROE, ROI, the quick ratio. These are just a handful. What if we told you, though, that the most important ratio isn’t financial? Rather, it is leadership in nature, and we call it the ‘SAY:DO’ ratio. It is very simple, and it is a numerical indicator of how well you walk the walk.

If you’ve earned a SAY:DO ratio of 1/.50 that means that for everything you say as a leader, you back it up 50% of the time. That’s not so good—better is a 1/.75 ratio. This means that you follow-through on your verbal commitments about 75% of the time. Of course, the best ratio is the 1:1 ratio. This means that you deliver on ALL of your verbal, written, formal, and informal commitments. You hold your word. You follow-through. You make true the commitments you make to others.

A couple of notes here…. First, this is the hallmark of great leadership. When a SAY:DO ratio is 1:1 that means you set the example. This may hurt a bit, but it is impossible to be a transformational or revolutionary leader without setting the example. Second, this is a necessary condition for trust. When you have a 1:1 ratio, you are building trust because you are delivering on your commitments. Third, it is the followers—not you—that determine your ratio spread. You may think your SAY:DO ratio is a perfect 1:1. What you think pales in comparison to the feelings and perceptions of those you lead. Finally, this ratio should apply in personal, as well as, professional circles. What true value is this ratio if it is only applied to one dimension of your life? Extending this logic just a bit unearths an even more important maxim—make commitments sparingly and only when you know you can “cash the check”. Sheer probability suggests that the more commitments you make, the harder it will be to deliver on each one. So, make commitments and promises with caution and restraint, and be a great leader by under-promising and over-delivering. Nobody gets disappointed here.

To learn more about our leadership ratios, call Robin Bichy, an ELP founder and principal, at 703.999.5676. This may be the most important ratio you’ll ever manage!