Abstract
AbstractThe study of organizational healing is a new concept. The theory of organizational healing states that organizations go through a healing process similar to the process the human body takes to recover from injury. What is less researched in the organizational healing space is how the leader’s style guides the process and what part of the process the leader’s style plays. This non-experimental, quantitative survey study explored how the leadership style of the CEO of Iowa financial institutions impacted the organizational healing metrics of profitability, growth, and trust following the COVID-19 pandemic. 267 CFOs of Iowa financial institutions received a request to participate in a survey. Of the 109 responses (40.82% response rate), 54 surveys were complete and identified COVID-19 as a traumatic event (20.22% modified response rate). The survey consisted of the MLQ 5X rater edition and the Organizational Trust Inventory. This data was combined with publicly available financial data to determine the interaction between leadership styles and trust, profitability, and growth. Leadership style did not correlate with profitability or growth but did correlate with organizational trust. Further exploration showed that intellectual stimulation, idealized attributes, and contingent reward were significantly and positively predictive of trust scores. Conversely, laissez-faire leadership was significantly and negatively predictive of trust scores. This data informed a real-world solution of training and constant monitoring to increase the desired leadership styles and behaviors while minimizing the non-desired behaviors of existing CEOs or specific leadership style to consider if the CEO position is vacant.