This is without doubt my favourite chapter in my book – Do What You’ll Say You Do.
Actually, this is WHY I do what I do. Enjoy.
The Impact of Leadership
You are here to make a difference, to either improve the world or worsen it. And whether or not you consciously choose to, you will accomplish one or the other.
So Why Does Any of This Matter?
As with most things in life, good leadership matters both for the impact it can have when it’s done well and for the disproportionately bad impact it can have when done badly. Matt Church, author of Amplifiers, sums it up well:
If you have ever worked for a jerk, you know the detrimental impact a bad leader can have on a group. Nothing saps the energy of good people more quickly than bad leaders. These are the adults who have never grown up. These people somehow work their way through the rank and file, and end up in positions of influence. They bully, they blame, and they basically allow their personal pathology to drive their leadership behaviours.
Some real-life examples of questionable leadership behaviours:
- The ex-military boss who would call out to his team members at the top of his voice, “You’ve failed”;
- The boss who bullied his team with ridiculous micromanagement and over-the-top requests;
- The boss who, after a full-day session on leadership with her entire team present, stormed out without a word of thanks to the presenters or any final wrap-up comments to the team;
- The boss who was having an extramarital affair and asked his subordinate to lie for him when he didn’t come home one night after being with his lover;
- The boss who told his team member that the only thing going for her was her eyebrows;
- The boss who could never be pinned down to any decision and would deny making a decision at a later point;
- The boss who asked his team member what she was wearing under her skirt;
- The boss who left photos of his overseas mistress in the flipbook that he went through with his staff member;
- The boss who had boozy Friday afternoon lunches, and for thirteen consecutive weeks fired someone on his return to the office.
Many of these examples are years old, demonstrating the lasting impact and power that poor leadership can have. Sadly, the list goes on and on, with example after example of questionable judgment and poor behaviour. Just as I was finishing off this book, along came the example of the CEO who offered his employee a breast enhancement. You honestly could not make this stuff up!
In fact, when Stanford professor Bob Sutton recently wrote of the original Harvard Business Review article that led to his 2007 book The No Asshole Rule, he said that despite writing longer and more well-researched articles since, he has yet to receive such a strong response—and that to this day, the emails continue. He has now received over a thousand examples of poor leadership behaviour.
The Contagion Effect
We’ve probably all worked for or heard about “leaders” who act like this. The effects can be devastating for those below. Another worrying thing is that these “leaders” don’t just affect the people who directly report to them: they have an effect on the whole organisation.
Here’s Tony Schwartz, a Harvard Business Review blogger, author of Be Excellent at Anything and CEO of The Energy Project, who says that:
“ leaders, by virtue of their authority, exert a disproportionate impact on the mood of those that they supervise … Negative emotions spread fast, and they’re highly toxic.”
The problem with bad or absent leadership is not just that it hurts others, but also the multiplying effect of the impact it has on the organisation. Others can view the behaviour of one bad leader as an excuse for their own mediocre leadership behaviours.
The Cost of Poor Leadership Behaviours
Leadership authors and experts Lombardo and Eichinger put it succinctly “.. the penalty for less-than-able leadership is huge, as is the payoff when leadership is present.”
Poor leadership isn’t just bad for morale; it also affects productivity, customer service, employee turnover, innovation and engagement. Every single one of these elements has a direct link to the bottom line in organisations and more broadly across the nation.
The 2012 McKell Institute Report, Understanding Productivity, Australia’s Choice, had this to say: “Superior management performance is positively linked to expanded sales, market valuation, employment growth and productivity…It is increasingly recognised that the development of leadership and management skills is crucial to the improvement of Australia’s productivity performance.”
In their 2010 book, Manager Redefined, Tom Davenport and Stephen Harding analysed 40 global companies over a three-year period and found that those who had a highly engaged employee population had a significantly better financial performance than those with less engaged employees. They then analysed the drivers of engagement and found that the number one engagement driver was the perceived strength and performance of senior leaders. They went on to say that the behaviour and effectiveness of direct supervisors is also woven through the list of factors that affect employee engagement.
The global research firm Gallup, which has now conducted eight meta-analysis research studies, backs up this research. Their State of the Global Workplace Report 2013 confirmed once again that there was a strong and well established link between employee engagement and a series of key performance outcomes including: customer ratings, profitability, productivity, turnover (for high- and low-turnover organizations), safety incidents, shrinkage (theft), absenteeism, patient safety incidents and quality (defects).
The report goes on to state that:
Gallup’s research also shows that companies with engaged workforces have higher earnings per share (EPS) and seem to have recovered from the recession at a faster rate” and that “organizations with a critical mass of engaged employees outperformed their competition, compared with those that did not maximize their employees’ potential.
And then there are the legal and brand implications. The increasing emphasis on anti-bullying has been costing companies big in terms of both payouts and damage to their brands: anyone remember the David Jones debacle of 2010 where the CEO resigned suddenly in the wake of allegations around his behaviour?
The Story of the Grocery Store CEO
While I was writing this book, a huge furore hit the media. It started off as something quite small. A grocery chain in New England, USA had its CEO, Arthur T. Demoulas, ousted. What happened next was quite extraordinary.
The workers refused to deliver fresh produce to the 71 stores, meaning the shelves were left empty. Of course, then customers began leaving—partly because they couldn’t buy fresh food, but, interestingly, also as a sign of protest.
So, the employees were prepared to stand up for Demoulas, losing wages in the process. It’s quite astonishing, as CEOs are often accused of sitting in their ivory towers and not being approachable.
The story makes more sense when you hear the employees describe Demoulas, as they have done here:
Employees said it was their allegiance to Demoulas that kept them united. Demoulas is beloved by the workers not only for offering generous benefits—including a profit-sharing plan—but also for stopping to talk to workers, remembering birthdays and attending funerals of employees’ relatives.
“He’ll walk into a warehouse and will stop and talk to everyone because he’s genuinely concerned about them,” said Joe Schmidt, a store operations supervisor. “He cares about families, he asks about your career goals, he will walk up to part-timers and ask them about themselves. To him, that cashier and that bagger are just as important as the supervisors and the store management team.”
Schmidt said Demoulas once called a store manager after he heard the man’s daughter was critically injured in a car crash. Demoulas wanted to know whether the hospital she was in was giving her the best care possible. “Do we need to move her?” he asked. “He is just a good man,” Schmidt said.
The revolt not only led to Demoulas being reinstated, but also led to millions of dollars lost from the company in the intervening six weeks.
This is yet another example of leadership having a direct impact on the bottom-line.
Personal Career Derailers
All of that is fine and dandy—but that is all at an organisational level. Let’s get personal. What’s in it for you to lead well?
Dr Lois Frankel, best-selling author of: Nice Girls Don’t Get Rich and leadership coach, sums this up well with the following story:
Sara was an engineer with an outstanding record .., when she was promoted to manager of her department. Although she was able to produce high-quality results for six years she was an individual contributor, she’s currently floundering in her role as leader.
Sara’s story is a familiar one. I have seen it played out in every organisation that I have ever worked with, and no doubt you have seen it too. The accountant who is hard working and clever and analytical and who quickly climbs the ladder, only to come unstuck when he is put in charge of his first team. The laboratory technician who is tagged ‘high potential’ and made a team leader, only to find that she has fantastic technical skills but very limited leadership skills. And whilst the analytical fields (engineering, finance, quality) get tarred with these stories, the reality is true for every area of organisational life.
Leadership requires specific skills. You can’t just keep doing what you always did. Learning the tools that this book provides will give you an excellent head start.
A recent Harvard Business Review study analysed the competencies required at every level of leader. There were two interesting points from the study:
- That the top four competencies matter whatever level job you’re in (new leader to very senior, experienced executive)
- That there are some competencies which whilst not needed now will be critical in the next level, and being able to demonstrate those competencies in advance provides evidence that you may be successful at the next level.
One of the key things I talk about in this book is development (both yours and your team’s), so I like the concept that we are always working on the skills we need now, but with one eye to the future.
For more information on leadership competencies and derailers, an excellent resource is For Your Improvement, a book that provides practical exercises on how to improve specific competencies and address particular career derailers.
Whichever way you view it, bad leadership costs. It can cost emotionally and financially. It can show in the lack of engagement and high turnover. It can show in poor quality customer service. It can show in the profit and earnings of an organisation. And it can impact on an organisation’s reputation and brand.
The good news, though? This isn’t a book about bad or absent leadership. It’s a book about how you can summon your courage to act in a way that amplifies all those very same things for good rather than evil!
Take a Moment
Think about the leaders you’ve come across to date—not just at work, but also in sporting and community clubs. Was there one who seemed particularly good or bad? What made them so good or so bad? How long ago was this? Why has the memory stood the test of time? Most importantly, what was the impact of that person’s leadership on you and the organisation?
Sticky Messages :: A Very Short Recap
- Poor leadership comes in many guises.
- Poor leadership and its attendant behaviours are toxic and contagious within organisations.
- Poor leadership costs in terms of personal impact, organisational productivity and the bottom line.
- The connection between leadership and the bottom line is very well established.
- One of the main career derailers has been identified as the inability to lead.
Want More?
If you would like to discuss how I could help you look at your leadership, get in touch.
And if you’re still hungry for more on being a great leader, you can find my leadership book here and click here for more resources on the impact of leadership including Dr Frankel’s article and the HBR article on competencies required for leadership.
Until next week, happy leading.
