Redefining ROI: How Servant Leadership Drives Results Through Relationships
By Kevan McBeth, Co-Founder - Servant Leadership Academy
Return on Investment (ROI) is traditionally a numbers game – profits, productivity, and performance metrics. But what if ROI could be redefined beyond the spreadsheets? What if the real returns are born from relationships – the trust, loyalty, and growth we cultivate in our people? In today’s evolving workplace, the most forward-thinking leaders are discovering that servant leadership – a philosophy of leading by serving others – is not just a feel-good notion, but a powerful business strategy. By prioritizing employees’ well-being, empowerment, and development, servant leaders are achieving remarkable outcomes in employee engagement, innovation, customer loyalty, team performance, and yes, the bottom line. This blog post will explore how “results through relationships” isn’t an idealistic slogan, but a proven formula for sustainable success.
But let's consider diving into the core principles of servant leadership – themes like stewardship, empathy, listening, empowerment, psychological safety, and growth – and show how these human-centered practices translate into hard business benefits. Drawing on recent research and real-world examples, we’ll see why companies that embrace servant leadership enjoy higher employee retention, more innovation, stronger customer loyalty, better team performance, and greater long-term profitability than their command-and-control counterparts. In doing so, we’ll redefine “ROI” to include the rich dividends that come from investing in relationships. Let’s explore the business case for caring – and how servant leadership drives results by putting people first.
Servant Leadership 101: A People-Centered Paradigm Shift
To understand the power of servant leadership, we first need to grasp what it means. Coined by Robert Greenleaf in 1970, servant leadership is a mindset shift: it turns the traditional leadership hierarchy upside down. Instead of employees serving the leader to achieve goals, the leader serves their people, empowering them to achieve their full potential. It’s a philosophy that prioritizes people over power. As leadership expert Kurt Uhlir puts it, “Traditional leadership celebrates power. Servant leadership harnesses potential and accelerates it. One requires compliance; the other builds commitment.”In servant leadership, success isn’t measured by how many people report to you, but by how many people grow because of youkurtuhlir.com.
At its core, servant leadership is about service, not status. The servant leader’s mentality is: “My job is to remove obstacles so you can succeed” rather than “Do what I say or else.”kurtuhlir.com It means putting the needs of employees and stakeholders first – listening to them, empathizing with their perspectives, and investing in their growth. This is quite different from historical command-and-control models. As one article contrasts, “Where traditional leaders use power and control to drive performance, servant leaders actively share power and control to drive more engagement… Traditional leaders speak; servant leaders actively listen.”strategic-alliances.org.
Servant leaders see themselves as stewards and coaches rather than bosses. They focus on building an inclusive culture where people feel valued and safe to contribute. In practice, that involves humble behaviors like soliciting input from the team, providing support and resources, and modeling integrity and transparency. It’s a “people-first” approach that recognizes an important truth: when employees thrive, the organization thriveskurtuhlir.comkurtuhlir.com. As the Servant Leadership Academy teaches, “when we serve our people with empathy, value and care, they will serve our customer in exactly the same way.” In other words, by caring for your employees, you set off a chain reaction of positive outcomes up to the customer and financial levelfile-cpiygjns41kp5s2qrbwywcfile-cpiygjns41kp5s2qrbwywc.
This approach isn’t just a nice theory – it’s increasingly in demand. New generations in the workforce (like Millennials and Gen Z) expect leaders to be more supportive, empowering, and authentic rather than authoritarianstrategic-alliances.org. They value humility, empathy, and purpose in leadership, and they’re quick to disengage or leave workplaces that lack those qualitiesstrategic-alliances.org. In fact, a LinkedIn survey found up to 75% of Gen Z workers would consider leaving a job that doesn’t offer a supportive leadership style and flexibilitystrategic-alliances.org. Servant leadership directly speaks to these expectations by creating a culture of trust, collaboration, and caring – which, as we’ll see, ends up benefiting the company just as much as the employees.
An infographic highlighting ten key qualities of a servant leader – including listening, empathy, acting with integrity, and empowering others – which form the core of the servant leadership philosophy (each letter in “LEADERSHIP” represents one of the qualities). Servant leaders excel at active listening (paying full attention to others’ ideas and concerns), empathizing (seeking to understand employees’ perspectives and feelings), healing and humility (helping others and admitting their own vulnerabilities), conceptualizing and foresight (having a vision and anticipating future needs), stewardship (acting as responsible caretakers of the organization and its people), commitment to growth (dedicating time to develop others), and building community. These traits might sound “soft,” but they create a firm foundation for high performance. By listening deeply and showing genuine empathy, servant leaders build trust; by empowering people and removing obstacles, they unlock initiative and innovation; by acting with integrity and humility, they inspire loyalty. In short, servant leadership cultivates the kind of work environment where people want to give their best.
Importantly, servant leadership is not about being “nice” at the expense of results, nor is it a laissez-faire approach. It’s a strategic choice to prioritize long-term people development and relationships as the path to sustained successkurtuhlir.com. Servant leaders still set high standards and expect excellence – but they achieve it by enabling and encouraging their team, rather than barking orders. They understand, as one business leader noted, that “organizations can’t grow beyond the capacity of their people”kurtuhlir.com. So, they invest in expanding that capacity.
Now, how does this people-centric approach translate into tangible business results? Let’s explore the ROI of servant leadership across several key outcomes:
Employee engagement and retention – Lower turnover and a more committed, motivated workforce
Innovation and creativity – A culture where new ideas flourish and teams solve problems boldly
Customer satisfaction and loyalty – Employees who feel cared for deliver better service, creating loyal customers
Team performance and productivity – High-trust teams collaborate better and achieve more together
Long-term profitability and growth – Companies with servant leadership outperform their peers financially over time
Each of these areas is a pillar of organizational success, and servant leadership has proven benefits in all of them. Let’s examine the evidence for each, and see how relationships drive results.
Engaged Employees, Lower Turnover: Loyalty Begins with Listening
One of the clearest impacts of servant leadership is on employee engagement and retention. When people feel valued, heard, and supported by their leader, they develop a strong sense of loyalty and commitment to the organization. In contrast, when employees feel like mere cogs in a machine – micromanaged or disregarded – they disengage and eventually head for the door. Servant leadership addresses this head-on by building a culture of respect, trust, and care that makes employees want to stay and give their best.
Research strongly links servant leadership to higher employee satisfaction and lower turnover. A recent 2024 study in the service sector found that implementing servant leadership “positively affects employees’ motivation and retention”, and even bolsters a company’s stability in turbulent times. Similarly, a study on millennial employees noted that servant leadership increases employees’ intention to stay (retention), even if it may indirectly influence creativity through other factors. In essence, when leaders act as servants – showing empathy, supporting development, and building an inclusive team – employees respond with loyalty. As another research review put it, “servant leadership helps to create a positive work environment, enhancing employees’ sense of belonging and loyalty to the organization.” It builds organizational commitment and reduces turnover intentions.
The reason is straightforward: people don’t leave jobs, they leave leaders. Employees are far less likely to quit when they feel their boss genuinely cares about them and has their back. Servant leaders demonstrate care through actions – they listen to employee concerns, show empathy in times of personal need, and involve team members in decision-making. This creates an atmosphere of trust and loyalty. A conceptual study by Mansoor Ahmed Khuhro proposed that servant leadership reduces turnover intention by increasing employees’ sense of psychological safety – the feeling that “the organization is a safe place to speak up [with] ideas [and] opinions”. Indeed, servant leadership was expected to correlate to lower turnover intention and higher psychological safety, a hypothesis that has been supported by subsequent research.
Consider a powerful real-life example of how servant leadership prevents needless turnover. In his work as an executive, Kurt Uhlir recounts: “I once had a top performer whose productivity suddenly dropped. Rather than reprimanding him, I asked what had changed.” It turned out the employee’s child had been diagnosed with special needs, creating stress at home. Instead of showing frustration, Uhlir responded with compassion and flexibility, adjusting the employee’s schedule to help him cope. The result? “We kept a valuable team member who later delivered our most successful product launch.” Under an authoritarian manager, that talented person likely would have burned out or quit, and the company would have lost a key contributor (without even understanding why). Servant leadership, through a simple act of listening and empathy, not only retained an employee but paved the way for a major success. This story illustrates a common scenario: when leaders treat people as humans rather than resources, employees repay that care with loyalty and high performance.
Data backs this up. According to a Gallup survey, companies that embrace servant leadership as a core value see a 20% boost in employee engagement on average. Engaged employees are emotionally invested in their work – they give extra effort, persist longer, and generate creative solutions. Gallup’s decades of research have shown that higher engagement leads to better productivity, quality, and customer service. On the flip side, disengaged employees cost companies dearly (through errors, absenteeism, and turnover costs). By driving engagement, servant leadership directly improves the bottom line. In some organizations, adopting servant leadership has literally doubled employee engagement scores, an astonishing increase that any HR executive would envy.
And what about turnover? The cost of losing an employee is high – studies estimate it can cost anywhere from 50% to 200% of an employee’s annual salary to replace them (considering recruiting, training, lost productivity, etc.). Servant leadership dramatically reduces that drain. The Servant Leadership Academy notes cases where turnover decreased by as much as 50% after leaders shifted to a servant-leader approachfile-cpiygjns41kp5s2qrbwywc. This isn’t surprising: if engagement is higher and employees feel cared for, fewer people are inclined to leave. One academic study of over 500 sales employees found that servant leadership behaviors “enhance organizational commitment and thus reduce turnover intention”. Another study of 238 employees in Ukraine confirmed that servant leadership not only increased motivation but also was strongly linked to employees’ retention, even amid uncertainty.
Importantly, servant leadership creates a climate of psychological safety, which is a key ingredient in retention and performance. Psychological safety means team members feel safe to be themselves, to voice ideas or concerns, and even to fail, without fear of punishment or ridicule. It’s been called a “cornerstone of excellent service” and a foundation for learning and growthfile-cpiygjns41kp5s2qrbwywc. When people feel psychologically safe at work, they are far more likely to be engaged and stay with the company. Google’s famous Project Aristotle study on team effectiveness found that psychological safety was the number one factor distinguishing high-performing teams. Teams with high psychological safety have higher engagement, more open communication, and lower turnover, whereas teams without it suffer from low morale and high quit rates. Servant leaders actively cultivate psychological safety by listening without judgment, encouraging candor, and showing support when mistakes happen. For example, they model vulnerability (admitting their own missteps) and avoid a blame culture. As a result, employees aren’t walking on eggshells; they know their leader has their back. That sense of safety and trust leads to stronger loyalty. “When people are in an environment where they feel safe and supported, they are naturally more open and expressive… They feel valued and are willing to buy in – investing back in the relationship,” explains the Servant Leadership Academy’s training material. In such an environment, employees describe feeling a sense of belonging – “they feel as though they are in a place that cares for them”file-cpiygjns41kp5s2qrbwywc – which is exactly what drives them to stick around.
It’s worth noting that retention isn’t just about keeping warm bodies; it means retaining institutional knowledge and high performers, which directly affects business performance. When servant leadership keeps your MVPs from leaving, it safeguards your future success. It also enhances your reputation as an employer – making it easier to attract talent. Companies known for servant leadership often appear on “best places to work” lists (e.g., Marriott, Starbucks, and SAS are frequently cited examples), which in turn draws more passionate people through the door. There’s a virtuous cycle: treat employees well → they stay and thrive → the company prospers → it becomes a magnet for more great people.
In summary, servant leadership drives a high ROI in human capital: engagement up, turnover down. By listening to employees and acting with empathy and respect, servant leaders create a loyal workforce that goes the extra mile. People give more when they know they’re valued not just as workers, but as human beings with goals and challenges that their leader genuinely cares about. This loyalty yields measurable benefits – higher productivity, less hiring costs, and a culture that attracts talent. The investment in relationships pays off in performance. As the service-profit chain concept (developed by Harvard researchers) teaches, employee loyalty and satisfaction are the first link in a chain leading to customer loyalty and profitability. We’ll explore those next links shortly. First, let’s look at how a servant leader’s focus on empowerment and safety unleashes innovation.
Innovation Through Empowerment and Psychological Safety
In today’s fast-changing business landscape, innovation isn’t a luxury – it’s a necessity for survival and growth. How can leaders encourage the creativity and agility their organizations need? The answer starts with culture. People innovate best when they feel safe to take risks and empowered to act on their ideas. This is precisely where servant leadership shines. By fostering a high-trust environment and giving employees autonomy, servant leaders create the conditions for innovation to flourish.
Think about the opposite scenario: a fear-based culture where managers punish mistakes and insist on doing things “their way.” In such places, employees keep their heads down; they won’t stick their necks out with a bold idea or admit to failures. Innovation withers under fear. As one observer bluntly put it, “Fear is a by-product of an extreme command-and-control style of leadership, and it’s a complete and total service chain killer.”file-cpiygjns41kp5s2qrbwywc In contrast, servant leadership removes fear and replaces it with trust and learning. Servant leaders treat failures as learning opportunities and encourage experimentation. They ask questions like “How can I help you succeed?” rather than “Why did you mess up?” This approach unlocks employees’ creative potential.
Research confirms that servant leadership boosts innovation at both individual and team levels. A 2024 study in the Heliyon journal examined 311 employees and found that servant leadership “positively influences team innovation performance.” In particular, servant leader behaviors like persuasion and providing guidance were significant predictors of more innovative team outcomes. How does this work? The study also found that servant leadership “significantly boosts innovation self-efficacy,” meaning it increases employees’ confidence in their ability to innovate. This is crucial: when people believe their ideas are valued and that they have support, they actually generate more and better ideas. The researchers noted that servant leaders foster a culture of innovation by building their team’s self-belief and by creating a supportive team “innovation atmosphere”. In other words, servant leadership sets up a positive feedback loop: leaders empower employees → employees feel capable and take initiative → the team’s innovative output improves.
Another study on employee creativity echoes this. Servant leadership has been linked to higher creative performance, often through mediators like knowledge sharing and trust. For instance, research published in Frontiers in Psychology found servant leadership enhanced employees’ creativity by encouraging knowledge-sharing behaviors in the team (since team members felt supported rather than competitive). It’s not that servant leadership directly gives people ideas, but it creates the interpersonal climate where creativity thrives – one marked by openness, collaboration, and encouragement.
Psychological safety plays a starring role here. As mentioned, Google’s Project Aristotle found psychological safety to be the top factor in team innovation and success. In teams with high safety, “members feel safe to take risks, be vulnerable, and share ideas without fear of ridicule or rejection”. And the outcomes are striking: such teams experience increased innovation, better decision-making, and higher engagement, whereas teams lacking safety stagnate and make poorer choices. Servant leaders actively cultivate psychological safety (it’s essentially embedded in the servant leader’s DNA). By listening without judgment, encouraging feedback, and rewarding candor, they ensure team members feel their voices are heard. They also model fallibility – a servant leader might openly acknowledge, “I don’t have all the answers” or share a story of a mistake they learned from. This signals to the team that it’s okay to be human and take smart risks. When employees aren’t terrified of being blamed or shamed, they are far more likely to suggest that crazy new idea or to flag a problem early (when it can still be fixed). Thus, servant leadership removes the brakes from innovation and continuous improvement.
A famous example of psychological safety enabling innovation is Pixar Animation Studios. Pixar is renowned for its consistent creative success (blockbuster films one after another), and insiders attribute this to an intentionally safe, candid culture. Ed Catmull, Pixar’s co-founder, implemented the “Braintrust” – a forum where teams present work-in-progress to a group of colleagues for open, honest feedback. The rules of the Braintrust ensure constructive dialogue and no fear of reprisal: feedback must focus on the project, not the person; filmmakers can’t be defensive; and everyone shares the goal of making the story. Criticism is offered with empathy and positive intent, and failure is celebrated as an essential part of the creative processfile-cpiygjns41kp5s2qrbwywc. As Catmull says, they try to “decouple failure from fear”. This environment – which is a real-world embodiment of servant leadership principles – allows Pixar’s teams to take risks and innovate in ways that other studios struggle to replicate. The result? Unparalleled creativity and a $7+ billion acquisition by Disney, as Pixar’s unique culture became its competitive advantage. Servant leadership creates similar cultures in any industry, not just filmmaking: a space where experimentation is encouraged and people are empowered to find new solutions.
Empowerment is a key word here. Empowering others is one of the central tenets of servant leadership. It means giving people ownership of their work and the autonomy to make decisions, rather than dictating every move. When employees are empowered, they act like owners – they bring more creativity, accountability, and initiative to the table. Recent research indicates servant leadership indirectly spurs innovation through empowerment mechanisms. For example, a study in Applied Psychology found servant leadership increased employees’ “innovation behavior” through greater trust in leadership and a sense of ownership in the organization. Servant leaders empower by mentoring their team, providing resources, and then stepping back to let people try things. They aren’t hovering or second-guessing; instead, they’re cheering from the sidelines and available to help if needed. This trust in employees becomes self-fulfilling – people rise to the occasion when someone sincerely believes in their abilities.
Moreover, servant leaders often remove obstacles that block innovation. In the infographic above, “Removing obstacles” is listed as one quality of a servant leader (the “R” in LEADERSHIP) – identifying and clearing away the barriers that hinder the team. That might mean bureaucratic red tape, lack of training, or even interpersonal conflict. By acting as a facilitator, the servant leader lets creative talent flow unimpeded. This was highlighted in a Harvard Business Review article on driving innovation: leaders need to get out of the way and let their people experiment, intervening only to clear roadblocks or provide guidance. Servant leaders do exactly that. They serve the vision and the team by creating an environment where innovation isn’t a scary word, but a daily practice.
All of this translates to tangible outcomes. When employees feel free to innovate, companies reap the rewards in new products, better services, and improved processes. A 2024 empirical study specifically measured innovation outcomes and found teams led by servant leaders had significantly higher innovation performance than those that weren’t. It even quantified that difference, noting an improvement in innovation output by fostering something as simple as self-efficacy and a supportive team climate– both of which come from the servant leader’s relational focus. This is ROI in the form of intellectual capital and adaptability: servant-led companies are more likely to stay ahead of the curve because their people are continually learning and pushing for better ways.
In summary, servant leadership supercharges innovation by creating a culture of safe risk-taking and employee empowerment. By substituting fear with trust, and control with support, servant leaders unlock their team’s creative potential. The ROI is seen in new ideas realized, faster problem-solving, and a workforce that adapts to change rather than resists it. In a time when agility is everything, that’s a huge competitive edge. Next, let’s examine how the servant leadership approach with employees ripples outward to impact customers – arguably the ultimate source of ROI.
The Ripple Effect: Customer Satisfaction and Loyalty
There’s a saying in business: “Take care of your employees and they will take care of your customers.” Few embody this better than Sir Richard Branson of Virgin. He famously stated, “Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”. This philosophy is at the heart of servant leadership and directly ties relationships with employees to results with customers. Servant leadership’s impact on customer satisfaction and loyalty is a second-degree effect – it happens through the employees. But make no mistake, it is a powerful and proven effect.
When employees feel happy, empowered, and loyal (as we discussed in previous sections), they tend to deliver better customer service. They go the extra mile for customers, because they genuinely care and feel a sense of ownership in the company’s mission. On the other hand, disengaged or resentful employees can barely hide their apathy or frustration from customers. We’ve all encountered service from someone who clearly doesn’t want to be there – it’s not great for loyalty. Servant leadership ensures employees genuinely want to help customers, because the company (and its leaders) have genuinely helped them. It creates a culture of service through example: leaders serve employees → employees serve customers.
The Service-Profit Chain, a well-established business model from Harvard Business School, formalized this link. The chain goes: employee satisfaction → customer satisfaction → customer loyalty → profitability. At each step, there’s a causal relationship. Studies in service industries (airlines, hospitality, retail, etc.) have repeatedly confirmed that companies with more satisfied and engaged employees tend to have higher customer loyalty and spend per customer. Why? Because the customer experience is largely delivered by those employees. As HBS professor James Heskett (one of the creators of the Service-Profit Chain) found, “profits and growth [are] stimulated by customer loyalty, which is a direct result of customer satisfaction. And customer satisfaction is largely influenced by the value of services provided… which is created by satisfied, loyal, and productive employees.”. Servant leadership amplifies exactly those employee qualities – satisfaction, loyalty, productivity – and thus sets off a positive domino effect that ends in loyal customers.
Research specifically shows servant leadership improves customer-facing performance. One study on servant leadership and customer service found that teams led by servant leaders received higher customer satisfaction ratings, partly because the employees were more engaged in delivering quality service. Another study (focused on hospitality) indicated servant leadership indirectly boosts customer satisfaction by creating a strong service climate and encouraging “customer-oriented behavior” among employees. In essence, servant leaders instill a mindset of service in their teams. They often emphasize the purpose of the work – how it benefits the customer or community, which can be deeply motivating for employees. For example, a servant leader in healthcare will remind the team that “our work helps heal people”, tapping into their intrinsic motivation. This sense of purpose and empowerment translates into more caring, attentive interactions with customers or clients.
There is also evidence of servant leadership directly correlating with customer loyalty metrics. The Servant Leadership Academy cites data that servant-led organizations saw customer satisfaction scores rise by about 10% after adopting servant leadership practicesfile-cpiygjns41kp5s2qrbwywc. It may not sound huge, but in competitive markets a 10-point lift in customer satisfaction can significantly boost repeat business. Moreover, loyalty is about more than satisfaction – it’s about emotional connection. Leaders who treat employees with empathy and respect often find those employees create emotional connections with customers. As one LinkedIn thought leader observed, “Leaders who really care about their employees encourage employee satisfaction and loyalty, which drive higher customer satisfaction and customer loyalty, which in turn drive higher growth and profits.”. That encapsulates the chain reaction. Notice the emphasis: caring leaders -> loyal employees -> loyal customers -> growth.
A concrete example: consider companies known for legendary customer service, like Southwest Airlines, Ritz-Carlton, or Zappos. A common thread is that they also treat their employees extraordinarily well and empower them to make customers happy. Southwest’s former CEO Herb Kelleher was a classic servant leader who famously said the employee is more important than the customer, because a happy employee will create happy customers. Ritz-Carlton allows any employee to spend up to a certain amount (thousands of dollars) to solve a customer’s problem on the spot – that level of trust in front-line staff is a hallmark of servant leadership. Zappos, led by the late Tony Hsieh, fostered a culture of “Delivering Happiness” where employees had autonomy (and even fun) in serving customers, resulting in fanatically loyal customers. These real-world cases demonstrate that empowering employees to serve, and treating them as valuable partners, leads to exceptional customer experiences that build loyalty.
There’s also the aspect of customer-facing empathy. Servant leadership encourages empathy not just internally, but externally toward customers and the community. By modeling empathy, servant leaders set a tone for how customers should be treated – with understanding and respect for their needs. An empathetic, engaged employee is more likely to listen to a customer’s complaint and genuinely resolve it, rather than just following a script. Over time, this consistently caring service earns customers’ trust. They feel the difference in a company that has a servant-led culture: interactions feel more human, less transactional. And that emotional connection breeds loyalty. Research by Harvard’s Len Schlesinger found that “loyal customers – compared to merely ‘satisfied’ customers – are actually six times more likely to repurchase, refer others, and even pay more for your services”. How do you get loyal customers? By providing a uniquely positive experience, which stems from employees who are motivated to serve rather than just do the bare minimum.
A compelling piece of evidence comes from Inc. Magazine: “It’s a fact: How you treat your employees directly influences how your customers feel about your business. Numerous studies have shown that happy employees lead to happy customers… underscoring the critical role of employee satisfaction in customer retention.” Companies are taking note. More executives realize that chasing customer loyalty without addressing employee well-being is putting the cart before the horse. The smart move – and the servant-leader move – is to focus on your people first, knowing that customer loyalty will be a natural result.
Let’s quantify the ROI here: better customer loyalty means higher lifetime value per customer, more repeat purchases, and free word-of-mouth marketing through referrals. It’s far cheaper to retain and grow a loyal customer than to acquire a new one. By enhancing customer loyalty via servant leadership, organizations improve revenue and market share. A study highlighted by the Association of Strategic Alliance Professionals noted companies with servant leadership doubled their pre-tax returns compared to the S&P 500 average. Part of that outperformance is likely due to customer-related gains – loyal customers driving steady revenue even when competitors struggle to keep theirs. Also, a loyal customer base provides a cushion in tough times; they’ll stick with you through a downturn if they feel a strong connection (and have been treated well historically).
To sum up, servant leadership creates a positive ripple effect from employees to customers. By serving employees – empowering, engaging, and caring for them – servant leaders indirectly but powerfully serve the customer. Higher customer satisfaction and loyalty are the ripened fruits of the servant leadership tree. This is “ROI through relationships” in action: the internal relationships (leader-employee) shape the external relationships (employee-customer). Companies practicing this have seen measurable upticks in customer metrics and the kind of brand loyalty that money can’t directly buy. As Richard Branson’s principle and the service-profit chain both attest, putting people first is ultimately the best way to put customers first, and that translates to sustainable profits.
High-Performing Teams: Trust, Collaboration, and Growth
We’ve looked at individual employee outcomes and customer outcomes, but servant leadership also operates at the team and organizational level to boost overall performance. When a leader manages through serving, the entire team dynamic changes for the better. Trust goes up, conflicts go down, and people coordinate more effectively. A servant leader essentially acts as a team builder – nurturing a sense of community and shared purpose that propels the team to exceed expectations.
Team Performance: Studies have shown a clear link between servant leadership and team performance metrics. For example, a 2019 meta-analysis found that servant leadership was positively related to team effectiveness and productivity, often through building team cohesion and collective efficacy. When each member feels valued and heard, the team functions like a well-oiled machine. Servant leaders promote a “we’re in this together” mentality rather than a top-down hierarchy. They minimize internal competition and instead encourage collaboration. Research by Schaubroeck et al. noted that unlike many leadership styles that aggrandize the leader, “servant leadership is group-oriented and aims at building a shared sense of community among employees by promoting teamwork and sharing”. They found servant leaders help “minimize conflicts within the group… and nurture positive relationships between team members,” which leads to a form of group-level flourishing and better performance outcomes. Indeed, servant leadership was associated with higher team creativity and performance, especially in teams with a culture of low power-distance (i.e. where members accept equality and openness). This suggests servant leadership works particularly well in modern team structures that favor collaboration over rigid hierarchy.
A hallmark of high-performing teams is open communication and effective collaboration. Servant leaders excel at facilitating communication. They practice “disciplined listening” – as Kurt Uhlir calls it – meaning they actively seek out what they might be missing, encourage input from quieter team members, and create forums for dialogue. This inclusive communication ensures that the best ideas surface and that potential problems are caught early. It also means decisions are better informed (since multiple perspectives are considered), leading to better outcomes. Team members of servant leaders often report that their teams are more adaptable and proactive, because people are not afraid to speak up about changes or suggest improvements. The servant leader, rather than being a single decision bottleneck, pushes decision-making authority down to the team where appropriate, speeding up execution and increasing ownership.
Growth and Development: Another facet is how servant leadership focuses on the growth of team members (not just the tasks at hand). A servant leader is like a coach, spotting each person’s strengths and areas for improvement, and providing opportunities for them to learn and develop. This leads to a more skilled and versatile team over time. In fact, one could say servant leaders create more leaders. By mentoring and empowering their people, they instill leadership qualities throughout the team. Over time, you get a team of individuals who are all capable of taking initiative and leading in their own domains, rather than waiting to be told what to do. This dramatically increases the team’s capacity and resilience.
Imagine a sports team – a servant coach focuses on developing each player’s abilities and fostering teamwork, rather than just barking orders from the sidelines. Those players improve individually and learn to execute together fluidly, leading to championship performance. In the workplace, servant-led teams often exhibit high engagement (we’ve covered that) and also high organizational citizenship behavior – members willingly go beyond their formal job descriptions to help each other and the organization. Why? Because the leader’s example of going above and beyond for them inspires reciprocity and a culture of mutual support. Everyone pulls in the same direction.
Let’s consider measurable outcomes. One study at the business-unit level (e.g., retail stores) looked at servant leadership’s effect on financial performance via team flourishing. It hypothesized (and later supported) that servant leadership at the store level is positively associated with profit growth, and that this happens through the mediation of employee flourishing (well-being, teamwork) and revenue growth. In plain language: servant-led stores had more thriving employees, which led to better customer experiences and higher sales, which then led to greater profit increases. This was empirically supported – the stores with servant-minded managers saw significantly better growth than those without, controlling for other factors. We see again the chain of relationships driving results.
Furthermore, an extensive review by scholars Eva et al. (2019) noted that “extensive evidence exists of an association between servant leadership and performance at the group level.” They cite multiple studies demonstrating that teams under servant leaders tend to hit higher performance targets. For instance, servant leadership has been linked with higher team productivity and quality, often through increased teamwork and reduced conflict. It’s intuitive when you think about it: a team that trusts each other and their leader will coordinate and execute far more effectively than one rife with fear or infighting. Servant leaders unify teams around a shared mission and values, often emphasizing how each person’s role contributes to the bigger picture. This sense of purpose and camaraderie can dramatically boost morale and collective output.
Another team-level benefit is how servant leadership encourages a learning orientation. In servant-led teams, members feel safe to admit what they don’t know and to ask for help. This means they learn faster and share knowledge openly. A study in project teams found that servant leadership improved project success by fostering team learning behaviors and agility. In rapidly changing industries, that learning agility – the ability to pivot, update skills, and innovate on the fly – is a major performance enhancer. Servant leadership essentially creates a mini learning organization within each team.
It’s also worth touching on engagement at the team/organization level. Earlier we mentioned individual engagement doubling in some cases. At a broader level, companies that score high in servant leadership often have engagement levels far above industry norms. Gallup’s 20% boost figure we cited is across companies; in practice, some servant-led organizations manage to get nearly all employees engaged (which is an enviable feat considering worldwide engagement is often only ~30%). Those organizations see not just incremental performance gains, but transformational ones – because when you have an army of engaged, empowered employees, nothing is impossible. They will find a way to delight customers, improve processes, and implement the company vision.
Trust is the glue here. A servant leader cultivates trust within the team – trust in the leader and trust among teammates. High trust has been correlated with better financial performance (one study by Watson Wyatt years ago found high-trust companies outperformed low-trust ones by nearly 300%). Trusty teams make decisions faster and execute them more reliably. Servant leadership builds trust by consistently acting in the team’s best interest, standing up for team members, and following through on commitments. When the leader has the team’s trust, people are more willing to give their all, because they believe their efforts won’t be exploited or unappreciated.
In short, servant leadership turns teams into high-performance units by boosting trust, communication, and a growth mindset. The ROI shows up as higher productivity, more successful projects, improved quality, and adaptable teams that can tackle complex challenges. It’s like oiling the gears of a machine – everything runs smoother and more efficiently when people are aligned and motivated. And unlike a high-pressure leadership style that might gain short-term output at the cost of burnout, servant leadership achieves strong performance sustainably, because it doesn’t sacrifice the people in the process. That brings us to the final outcome area: long-term sustainability and profitability.
Long-Term Profitability and Growth: The Stewardship Payoff
Servant leadership is often associated with virtues like humility and empathy, but it’s equally about stewardship and long-term thinking. A servant leader sees themselves as a steward of the organization’s people, resources, and mission – responsible for nurturing them for the future. They focus on building a strong foundation (culture, capabilities, trust) that can yield success not just this quarter, but for years to come. This contrasts with short-term, ego-driven leadership that might prioritize quarterly numbers at the expense of people or ethical principles. The irony is, by focusing on the long game and the greater good, servant leaders actually drive better financial results over the long term. Good stewardship turns out to be very good business.
Studies have begun to capture this “bottom-line effect” of servant leadership at higher levels of the organization. A study published in 2025 examined CEO servant leadership in 102 firms and its impact on firm financial performance. The researchers found that CEOs who were rated high on servant leadership had a positive effect on their companies’ profitability – specifically through fostering a workforce that felt obligated to reciprocate by working hard for organizational success. In these companies, employees developed a sense of community and shared purpose (“we’re all in this together”) thanks to the CEO’s servant leadership. In response, employees went the extra mile (“obligation” in social exchange terms) which translated into improved organizational performance (they literally “worked harder for the company’s success”). The study noted that this effect was strongest in cultures where employees had a strong norm of reciprocity (what they called high exchange ideology) – meaning in companies where people naturally repay good treatment with loyalty and effort, a servant CEO’s impact on profit was especially great. The takeaway: servant leadership at the top can indeed boost financial outcomes by winning employees’ hearts and effort in a way that top-down leadership can’t.
In fact, earlier research by Peterson et al. (2012) found that companies with servant-leader CEOs had higher Return on Assets (ROA) than those with more autocratic leaders. And the 2025 study builds on that, explaining how the profit increase happens (through employee goodwill and discretionary effort). This aligns with other findings we mentioned: servant-led companies outperform others. One source noted servant-led companies can more than double their pre-tax returns versus Fortune 500 peers. Another cited that such companies “outperform competitors by up to 200% during downturns”. Think about that – in economic downturns, when most companies struggle or shrink, those with servant leadership cultures have been observed to fare dramatically better (up to triple performance). Why would that be? Possibly because in tough times, employees at servant-led firms rally together, innovate to solve problems, and remain loyal (reducing costly layoffs or disruptions), whereas less people-centric companies might flounder with demoralized staff or high turnover. Also, loyal customers stick with companies that treated them (and their employees) well, providing a revenue buffer in bad times.
Stewardship also implies a multi-stakeholder perspective: servant leaders care about customers, employees, shareholders, and the community – not one at the expense of others. This balanced approach can lead to more sustainable strategies. For example, a servant-led company is less likely to engage in reckless short-term cost cuts (that hurt quality or morale) simply to meet a target, and more likely to invest in initiatives like employee training, customer experience, or innovation that pay off long-term. While a traditional ROI analysis might balk at investments that don’t yield immediate profit, a servant leader sees them as building long-term value (because they’re a steward of the organization’s future). Over time, these investments tend to yield higher growth. Recall the Servant Leadership Academy’s evidence: a comparison of servant-led companies found they outgrew S&P 500 companies by an average of 14% year-over-yearfile-cpiygjns41kp5s2qrbwywc. That’s significant compound growth that, if sustained, leaves competitors in the dust. It underscores that servant leadership is not at odds with profitability – it actively enhances it.
One reason is that servant leadership mitigates many hidden “taxes” on organizations: high turnover costs, low productivity from disengagement, poor customer retention, compliance and ethical failures (servant leaders tend to run more ethical operations), and so on. By eliminating or reducing these drains, servant-led firms operate more efficiently and reputably, which strengthens financial results. On the flip side, servant leadership adds positive drivers: innovation (leading to new revenue streams), strong employer brand (attracting talent), customer loyalty (sustaining revenues), and an adaptable culture (able to seize opportunities quickly). It’s a holistic advantage that grows over time.
Additionally, because servant leaders focus on long-term momentum over short-term wins, they often make decisions that sacrifice immediate profit for future gain – for instance, keeping employees through a downturn to preserve knowledge and morale, which helps the company bounce back faster. Such decisions may penalize one quarter’s earnings, but lead to greater success in subsequent years. Investors and boards are starting to recognize this; there’s a rising interest in “conscious capitalism” and leaders who manage for stakeholder value. Servant leadership is aligned with these modern governance ideas, suggesting that companies with servant leaders might also enjoy better reputation and trust with shareholders and the public, further supporting long-term value.
From a leadership development standpoint, servant leadership also creates a pipeline of capable future leaders (because current leaders are mentoring and growing their people). This continuity and depth in leadership talent means the company is less likely to falter during transitions and can scale more smoothly. It’s hard to put an exact ROI number on “bench strength,” but every seasoned executive knows its importance. Companies that neglect leadership development often stumble when expansion or succession hits. Servant-led organizations, by continuously creating more leaders, ensure they have the right people to drive growth in each generation.
Finally, there is the broader impact: servant-led companies tend to contribute positively to society (through ethical practices, community service, etc.), which in turn can lead to intangible benefits like brand loyalty, easier regulatory relations, and higher purpose that attracts customers and employees. All of these support a stable, long-lasting enterprise.
In summation, stewardship and long-term focus pay off. Servant leadership may not always maximize this week’s profit, but it builds the kind of resilient, innovative, loyal organization that maximizes value over the years. The ROI of servant leadership, as we’ve seen, includes hard metrics like revenue growth, profit growth, and stock performance that outpace peers file-cpiygjns41kp5s2qrbwywc. It’s achieved not by squeezing the orange dry, but by watering the orange tree so it yields fruit abundantly season after season. This is redefining ROI: thinking of returns not only as extraction of value, but as creation of value through relationships.
Relationships as the New ROI
“Results Through Relationships” is more than a catchy phrase – it’s a reality demonstrated by research and lived by successful organizations. Across employee engagement, innovation, customer loyalty, team performance, and financial outcomes, we’ve seen a common pattern: when leaders put people first and lead with a servant’s heart, the returns follow. It turns out that the soft stuff – empathy, trust, listening, serving a higher purpose – creates the hard results that businesses crave. By redefining ROI to include relational capital, we unlock a more sustainable, human-centered form of success.
Let’s recap the core insights: Servant leadership drives employee engagement up and turnover down, saving costs and boosting productivity. It fosters a safe, empowering climate that sparks innovation and creative problem-solving. It transforms frontline employees into company ambassadors who win customer loyalty through exceptional service. It builds cohesive, high-trust teams that perform at elite levels. And it positions organizations to thrive in the long run – growing faster, adapting better, and outperforming competitors, even in adversity. Each of these is a measurable ROI component, whether it’s in percentages of growth, satisfaction scores, or innovation metrics. Together, they form a compelling business case that servant leadership is not just morally right, but financially smart.
The beauty of servant leadership is that it creates a virtuous cycle. Leaders care for employees → employees care for customers → customers reward the company → the company has resources to further invest in its people and mission. Contrast this with the vicious cycles that plague some firms (e.g., leaders drive employees hard and ignore their needs → employees disengage or leave → customers receive poor service → revenue falters → management panics and squeezes employees even more). Servant leadership sets the positive cycle in motion and, as we’ve shown, the data supports its efficacy. It aligns the success of the people with the success of the business.
This approach is also deeply inspirational and humanizing. Workplaces become more than just profit centers; they become communities where people grow, feel valued, and find meaning. That in itself is a priceless ROI – the kind that isn’t on a balance sheet but is evident in smiles, gratitude, and personal transformations. And yet, it ultimately does bolster the balance sheet too. It’s a win-win in the truest sense.
If you’re a leader (or aspiring leader) reading this, you might be thinking: “This sounds great, but how do I become a servant leader? How do I implement these practices in my organization?” The journey starts with a mindset shift – viewing your role as one of service and stewardship – and then developing the skills and habits that reinforce that mindset (active listening, empathy in action, coaching, etc.). It helps to have guidance and a supportive community while making this shift, because it’s as much about personal growth as it is about organizational technique.
This is where the Servant Leadership Academy can assist. We specialize in training and certifying leaders in the art and science of servant leadership. Through our courses, workshops, and coaching programs, we teach practical ways to apply principles like empathy, empowerment, listening, and creating psychological safety in your day-to-day leadership. We draw on the latest research (many studies cited in this article and more) and time-tested practices to help leaders transform their teams and cultures. Whether you’re looking to improve employee engagement, spark innovation, or lead your company to greater success, embracing servant leadership could be the key that unlocks that potential – and we’re here to help you on that journey.
A Soft Invitation: If the ideas in this article resonated with you – if you’re inspired to redefine ROI in your organization by investing in relationships – we invite you to learn more about the Servant Leadership Academy and our offerings. Consider joining our Servant Leadership Practitioner Certification Course or attending an introductory workshop. These programs are designed to be conversational, inspirational, and deeply practical, equipping you with the tools to drive real results through a people-centered approach. By connecting with our community of like-minded leaders, you’ll gain support and insights as you put servant leadership into practice.
Ultimately, the shift to servant leadership is a win for everyone: employees find fulfillment, customers receive better service, and organizations achieve outstanding results. Redefining ROI as “Return on Relationships” is not just a clever turn of phrase – it’s an idea whose time has come. The evidence is clear that caring and profitability are not at odds; in fact, caring might be the surest path to profitability. By focusing on service and stewardship, leaders can build companies that prosper financially because they enrich the lives of people. That is ROI worth pursuing.
Are you ready to drive results through relationships? We encourage you to take the next step on this rewarding path. Learn more about servant leadership with us at Servant Leadership Academy, and become the kind of leader who transforms organizations – one relationship at a time.
