Desperately Seeking Leadership

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I had a great opportunity to teach a session on leadership to a group of students finishing up their MBA program at a major university last week. My presentation was titled “Leadership Matters – Lessons from the Front Line.” The feedback I received was positive but a bit surprising. The students said the presentation was extremely valuable because it exposed them to the real world of business leadership. They said it was the first time they had a chance to listen to a seasoned executive talking plainly about the challenges of leading people. As it turns out, there are actually no courses on leadership in their program of study.

The sad truth is that most managers today have not received any formal leadership training. As I wrote in an earlier article, most employees are promoted into leadership positions, because of their education, seniority, technical skills or past performance. Most simply learn leadership “on the job” and many don’t have the necessary talent to be a leader. This is probably why there is such a leadership gap in business today.

In fact, the Gallup organization just released a study on leadership in the workplace and their findings were shocking. They found that 70% of employees remain disengaged at work, a number that has stayed consistent for the past 12 years. They also found that leadership played the most significant factor in the level of employee engagement. They found that leaders accounted for almost 70% of the variance of employee engagement across businesses and business units. Their conclusions were clear and disturbing. The lack of great leaders in companies is the primary reason for poor employee engagement.

Even worse, they concluded that great leaders are rare and difficult to find. Their study showed that only one in 10 people possess the high talent to lead people. Those 10% have the natural skills and abilities to engage employees, work with customers, retain top talent and create a high performance culture. They also found that an additional 20% of people have some of the characteristics necessary to be a great leader. Those individuals can become great leaders if their company invests in coaching and developmental plans for them. Their conclusion was that great leaders are hard to find and most will require coaching and training to reach their full potential.

So how can you close the leadership gap in your organization? Let me suggest four areas of focus:

Look for leadership talents and abilities in your employees. Great leaders are hard to find but even harder to find if you don’t actively look for them. You should spend time with your employees looking for those that step up and naturally lead projects or initiatives.

Give potential leaders the opportunities to lead. If you have an employee with leadership potential, regardless of their seniority or experience, give them an opportunity to run a small project or lead an activity. This will give you an opportunity to validate your assumptions.

Promote leaders based on leadership talents and abilities. It is important to avoid the pitfalls of promoting based on seniority, technical skills or past performance. Only about 30% of your employees will actually have the talent to be a great leader. Look for leadership talent and abilities first.

Train your leaders like any other discipline. Employees with leadership talent still need coaching and training to become great leaders. Leadership skills are like any other skill. They must be taught, trained, and practiced to reach a high level of proficiency. Since leadership directly drives employee engagement and business performance, leadership training and development should be a top priority.

The Gallup study makes a clear case for solving the employee engagement crisis in this country. The solution is simple, we need better leadership. The problem is that great leaders are hard to find and companies today are not doing a good job indentifying, promoting, and developing leadership talent. As leaders in our organizations, we need to change this. We need to keep a careful eye out for leadership talent in our employees, give potential leaders a chance to lead, promote leaders based on leadership abilities, and develop our leaders through coaching and training. If we place a high value on leadership in our organization, we can begin to create the culture of employee engagement we so desperately need.

So what do you think? Are the results of the Gallup study a wake-up call? Are there other things that need to be done to solve the employee engagement crisis in America? Do you think great leaders are as rare as Gallup says they are? Why can’t every employee be a great leader?

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5 Ways Leadership can Transform a Conflicted Workplace

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When there is no enemy within, the enemies outside cannot hurt you. ~ African proverb

If you’ve spent any time in the corporate world, you have dealt with office politics and departmental conflict. Over the past 20 years, I think I have seen every type of workplace culture, from teams that were aligned, externally-focused, and successful in the market to those which were more dysfunctional, internally-focused and operating in constant conflict. In every case, it was the leader that drove the culture.

The problem is that internal negative conflict and office politics can kill a company’s morale and performance. CPP Inc., the creators of the Myer-Briggs Assessment, published a study on workplace conflict a few years back. Their findings were interesting. According to the 5,000 employees surveyed:

  • 85% experienced some level of regular internal conflict at work
  • 29% dealt with internal conflict on a frequent or continual basis
  • 12% said that disagreement among senior managers was frequent or continual
  • 16% said a recent dispute escalated in duration and/or intensity
  • 27% have seen conflict lead to personal attacks
  • 25% have seen conflict result in sickness or absence
  • 9% have seen conflict lead to a project failure

Their findings showed that U.S. employees spent an average of 2.8 hours a week dealing with internal conflict costing companies more than $359 billion in productivity.

While internal conflict can’t be totally eliminated, it’s the role of the leader to align the team to focus on achieving the organizational goals.   The energy spent fighting internal battles needs to be redirected towards activities that add value and move the team forward. Here are some ways a leader can transform a conflicted workplace:

Set the Example. As a leader, employees are not only listening to what you say but also watching what you do. If your team sees you regularly bad-mouthing your peers or spending energy fighting turf wars, they see that as acceptable behavior.

Focus on the Competitors. If your organization is spending time fighting internally, your competitors are probably winning. I regularly remind my teams that, “the enemy is outside the four walls.” I explain that the problem isn’t with marketing, production, engineering, accounting, sales or any other internal department or group; it’s the competitors we need to worry about.

Focus on the Customer. The customer is the final judge of the performance of an organization. I’ve seen many internal battles fought over the right way to do something without ever involving any customers. Getting your team to spend time with customers changes this. It will help you gain a common understanding of what customers really want which will focus your organizational energy on meeting those needs.

Get the Organizational Structure Right. Often times, the organizational structure itself can create conflict. This is especially true with large global organizations. I’ve seen situations where teams were brought together to accomplish a task, all having different reporting structures, different bosses, different priorities, and limited authority. Conflict and escalation was inevitable. As a leader, it is important to ensure a clear organization structure with simple reporting lines, common goals, and delegated authority to get the job done.

Align the Incentives. In large corporations, it is not uncommon to have a variety of incentive plans for different departments, functions, activities, and levels. It is also not uncommon for people on the same team to have incentives that are in conflict with each other. The sales manager, for example, might be incentivized on order dollars while the operations manager might be measured on revenue margin percentage. This could set up a serious internal conflict, for example, when considering a large order with low margins. Part of the role of leadership is to ensure that, for the most part, the incentive structure aligns the team around a shared set of common objectives.

As a leader, it’s important to get the most out of your organization. If your teams are constantly fighting, politicking, positioning, and expending energy locking horns on every issue, you may be operating in an internally conflicted workplace. It’s your job to fix this by aligning the team and turning the energy into creating value for your customers and stakeholders. You can do this by setting the example, focusing on the competitors, focusing on the customers, getting the organization structure right, and aligning the incentive plans. It is important you send a clear message that you are all on the same team and the only victory that matters is winning in the market place.

What do you think? Can some conflict be good? Are there other issues that can create internal office conflict, like strong personalities, pressure to perform, or past experiences? What other activities can be done to minimize the internal battles?

Leadership means Running Towards the Fire

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Courage is Being Scared to Death, but Saddling Up Anyway ~John Wayne

I’m a trained firefighter. Actually, I’m a U.S. Navy veteran who served on nuclear submarines which means I have been trained to fight fires. It’s probably no surprise that a fire on a submarine is one of the most dangerous things that could ever happen on board. Smoke can quickly fill compartments and asphyxiate sailors. The heat and flames can spread to weapons, volatile materials, and critical systems creating catastrophic damage. A fire can quickly destroy a submarine if not extinguished immediately. That’s why we were trained to ignore our natural instincts to move away from the fire and, instead, run towards the fire to put it out as quickly as possible.

Business is the same way. There are situations that can occur that, if not addressed immediately, can cause catastrophic damage. These might include a product failure, a customer complaint, a supplier quality issue, a change in the market landscape, new technology, an employee situation, or any number of challenges that businesses face each day. The problem is that people in businesses also have a natural tendency to move away from or ignore problems.

Take for example the recent announcement of the bankruptcy of Radio Shack. Joshua Brustein refers to it as a “slow-motion collapse” because the warning signs were all there but Radio Shack’s management team did little to attack the problems. They didn’t run towards the fire. The market had changed dramatically. Other companies, like Best Buy, were doing a better job solving technology issues for customers. Wal-Mart and other low-cost retailers now sold many of the components, wires, and connectors that only were available in the past from Radio Shack. Radio Shack became stuck in the past and reduced to only the last resort for customers who couldn’t get their problems solved somewhere else. As a result, stores were empty, employees sat idle, revenues fell, and their stock lost 99.6% of its value. On top of that, they hadn’t shown a profit in three years.

As leaders, we can’t allow this to happen to our businesses. It is critical we create a culture where leaders and employees run towards the fire. Like firefighters, our teams must be trained to ignore their natural instincts to move away from or avoid problems. The future of our organizations may depend on it. There are three simple ways to create an organizational culture that attacks problems head on:

Lead from the front. There are large problems facing your business that only you can solve: A major problem at a strategic customer, a change in the competitive landscape requiring a new strategy, a significant market shift, or a new technology introduction. Your employees will be looking to you to lead the effort to attack these issues with tenacity. How you respond to these challenges will set the tone for the rest of the organization.

Celebrate those that run to the fire. I tell my employees that, when it comes to priorities, they should always take care of the customer first. I have had the pleasure to receive dozen of calls and e-mails from customers who were extremely happy with how one our team members dealt with a problem. I always make a point to thank these employees personally and discuss it in staff meetings and town hall events. The employees who take a relentless approach to taking care of a problem before it gets out of control are to be celebrated.

Attack the fire while it’s still small. There is a universal truth about problems and fires. The longer it takes to attack them, the larger they get. Almost every significant issue that gets to senior management was a smaller problem that could have been resolved in the early stages. That’s one of the reasons I believe in having a strong set of Key Performance Indicators (KPIs) to measure the performance of the business in real time. Negative trends in price, margin, product mix, customer satisfaction, quality, or on-time delivery can be quickly identified and addressed before they get too large.

I should also make another point about firefighting. I have also witnessed another extreme in business leadership with organizations that lacked structure and stable processes, where its employees were always putting out fires. Most of the management team simply moved from crisis to crisis. This is an unhealthy organizational situation and this is not the kind of firefighting I am referring to. It is the leader’s job to build a stable, smooth running business. Having to run to a fire should be the exception not the rule.

Ignoring or moving away from the problems that face your business can have catastrophic effects. We can see it play out with the bankruptcy of Radio Shack. As leaders, it is our responsibility to create a culture where employees resolve issues quickly. We can do this by leading from the front, celebrating those employees who live these values, and attacking problems before they get out of control. We need to teach our employees to ignore their natural instincts and move towards flames. The future of our organizations may depend on it.