I recently started an engagement with a new client that has not been able to develop consistent growth for the last five years. The company took many steps to fix the problem, including: changing salespeople on the team, addressing the sales processes, adding new segments, building a CRM, improving their product and service, and many other possible solutions. To no avail! The company not only had inconsistent growth, it shrunk and was unprofitable in its last full year.
After two retreats with this client it was very clear that their problem started at the top. One of the owners also happened to oversee sales and marketing, the very function that was failing the most. From every metric, the sales and marketing department was not performing, and it was clear that no “A Player” was going to work with him. Aside from being a narcissist who needed to be the star of every show, he is your typical know-it-all. He destroyed trust internally and externally, communicated poorly, did not follow through on commitments, was passive-aggressive, and self-serving.
You are probably familiar with Gallup, Inc.’s well-known State of the American Workplace report. According to Gallup, essentially 70% of today’s workforce is being paid to be “not engaged” or “actively disengaged.” A staggering 52 percent of employees are “not engaged”, meaning they essentially do just enough so they won’t get fired, but not more. The remaining 18% who are “actively disengaged” employees aren’t just unhappy at work; they’re busy acting out their unhappiness. Every day, these workers undermine what their engaged coworkers accomplish.
What is clear from their findings is that poor leadership is the cause of the 70% who are “not engaged” or “actively disengaged.” The evidence is supported by the fact that the 70% was not spread equally across companies, and there also were differences within the companies. The primary difference in engagement level was to whom those employees reported. This is important because when employees you have invested in are not engaged, you get less return on your investment.
What is clear, at my client’s and at any company that allows poor leadership, is that these poor leaders are very costly to an organization. Leaders affect everyone they encounter in a much more profound way than a regular staff member. According to research done by Bradford Smart, author of TopGrading, a poor leader costs you somewhere between 10 to 15 times their compensation. Your inept leaders cause everyone around them to perform at lower levels, and you lose access to a lot of great ideas. People are less apt to willingly give extra effort. If you have a leader on your team that is not able to get top performance from their teams, stop harassing the front-line people and address your real issue … leadership.
What Actions Can Be Taken?
Leaders are responsible for people, functional roles, and processes. You need to set your leaders up for success. Accomplish this by clarifying the following for every leader in the organization:
- Expect that the primary responsibility of a leader is to coach, mentor, and nurture an environment where employees stay motivated and do their best work.
- Give moral character traits equal weight to performance character traits when evaluating performance.
- Clearly define where the company is headed.
- Specify long- and short-term goals to be achieved. These are the measurable outcomes that would not happen if their position did not exist.
- Identify key people and processes for which they are responsible.
- Define key performance indicators for established goals.
- Observe patterns of behavior that inhibit success and provide coaching to help your leaders address those behaviors that are hindering their success.
Most importantly you must nurture an environment that fosters leaders!