Leadership is a hot topic today. Organizations focus on building leaders and disgrace the culture of management. Companies are more and more open for new and adaptive practices to help employees perform better. Data is analyzed, decisions are made through the level of leadership development in the organization.
Scientists and researches discuss widely the leadership topic. Organizations and consultants talk about cost of employees, ROI of trainings and especially the cost of poor leadership.
People hear COST OF POOR LEADERSHIP and brake this statement into millions of variations what it really means. Organizations calculate it in their development plans, consultants and trainers work on minimizing these costs etc.
In 2018 there were made more than 3500 researches and analyzes on what the cost of poor leadership looks like. More than 3500 different theses where put on table, some of them proved with the results from these researches, some not.
Gallup research “State of the American Workplace report” indicates that less than 50% of the employees feel involved and put more effort in, while more than 20% of the employees who feel disconnected and disengaged put efforts on counterproductive practices, work on negatively influencing coworkers etc. Those people take more sick days, they miss from their workplaces often, drive customers away by delivering poor service and demonstrating inadequate behavior. As a conclusion on why these happens, the Gallup research states that: The single great cause of employee disengagement is Poor Leadership.
Another trend comes from Harvard study in 2018. This study is about leadership effectiveness and its impact on the business results. Results from this study group leaders in 3 groups:
1. Great leaders – these leaders can make positive impact. Their decisions are informed and based on companies’ real needs and challenges. They know company business and their approach and decisions engage more than 85% of the employees in company plans.
2. Good leaders – They impact business adequately. These leaders are focused on results and biggest part of their decisions can positively impact business results. They don’t know company business in all details and miss some of the pitfalls and challenges that occur, but still have the tools to impact business positively. Measured by engagement, good leaders are those who can engage more than 50% of the employees and persuade 20% of the employees commit in at least 50% of the time about company challenges, plans and goals.
3. Poor leaders – focused on themselves, those leaders can’t bring positive impact to the business. With their decisions and actions these leaders disengage more than 75% of the employees. By achieving high number of dissatisfactions these leaders focus on things that are not important and shrink company business opportunities.
My thesis about this topic is that the costs that are generated through a poor leadership lay deep down in disconnection. Disconnected leaders are those who generate costs for their companies instead of add value. Those leaders stop companies for achieving their goals and bring stress, apathy and disengagement in organizations. You can recognize the disconnected leader by looking at four factors in your company:
1. Focus on wrong decisions – decisions who look right only in the eyes of the leader are wrong ones. If a leader says to you “We are doing it this way because I think it’s right” then you have an autocratic person in front of you who hardly accepts other opinions and views.
2. Use of old paradigms – the world is changing ad companies should also change. “We always did it this way and there is no matter to change our strategy”- If you hear that or like that phrase then you have stuck to the old paradigm leader in front of you These leaders are not open for new things. Their thinking is traditional and follows a pattern who allows them to feel comfortable, even without progressing with the speed, the company needs now.
3. Leadership development is priority only for the top-level management – Leadership nowadays is in the nature of each person. Leaders are building followers. If they want to succeed in their work, they must focus on transferring their skills and understanding to their followers. Leaders focusing on building leadership skills at the top level only but missing to involve in the process people from all levels are planning to fail.
4. Definition and measurement of wrong success factors – Leaders who are disconnected often focus on wrong thing to measure. They don’t have the view over the whole organization and don’t know the details in departments work and priorities. Being disconnected puts them in a position to wrongly understand challenges and plan and measure wrong things.
In opposite of these 4 behaviors, connected leaders understand business, challenges and pitfalls and plan for successful employees, realistic goals and results that grow business.
The cost of poor leadership is a wide subject that can’t be explained in short article. But this cost can have significant impact on company performance and business results. If companies want to minimize the negative effect of poor leadership they have to focus on transforming organization culture so, that it can enable moving from disconnected and capsulated leadership to connected and open on all levels leadership, ensuring better and faster results and increasing level of satisfaction and commitment in all employees.