cost leadership

The commercial cost of traditional leadership

So the saying goes; ‘people join a company and leave a manager’. Or maybe that’s just one of the things they tell new managers to put the fear of god into them.  The fact remains that somewhere between joining a company and deciding to leave it, something is going very wrong in far too many companies.  All at a time when, for many of us, the commercial environment has never been tougher.

Job satisfaction in the UK has hit a 2 year low.  Figures from the Chartered Institute of Personal Development, a professional HR body, showed that almost one in four workers were looking to leave their jobs because of the failure of managers to engage and retain staff.

At what cost?

As a leader I spent far too many of my work hours refining role profiles, reviewing CV’s, screening potential candidates, designing assessment centres, interviewing with a cohort of other senior colleagues before finally offering a role.  This was before the company and I invested time training the new recruit and equipping them until they finally became commercially productive.  And in all this time I was not managing, coaching, or inspiring the rest of the team I already had.

Imagine my disappointment then when individuals I had invested in emotionally and financially, taken great care to choose because they had the skills I knew we needed to be successful in a competitive world, then chose to leave the organization.  Why?  Because they didn’t like the culture.  They felt disempowered, overly scrutinised.  It wasn’t what they’d signed up for.  And so the cycle would begin again.

How do you lead in a commercially challenging environment?

When commercial performance is behind plan good leadership becomes critical.  What generally happens, in my experience, is that senior leaders default to what they know best; which means, if in doubt, make sure we have good input metrics.  Increased scrutiny is placed on KPI’s – in effect we literally ‘manage the life’ out of people.

And those people – the one’s I took such care to choose?  They scratch their heads and ask me why I bothered choosing intelligent, competent people if all I was going to do was tell them what to do?  Then they vote with their feet, praying the grass may just be greener on the other side.

Even worse, it’s not just the cost of those who choose to leave, which is bad enough.  Some ten million people are “actively disengaged”, “unhappy” and “unproductive” at work and liable to spread their negativity to co-workers. So even those you still have in your team are not all pulling with you to address the productivity gap.

Surely all we need is another good leadership programme?

Today, with all our understanding and knowledge, we tackle these problems by creating leadership programmes.  But do they work?  The Financial Times only recently declared that “money spent on training is often wasted”. They went on to say that “we spent almost £40bn on business training in the UK alone in 2008,” pointing out that; “this is slightly more than the 2012 UK budget for education. The US spends far more.” And then we’re surprised when it doesn’t deliver the value and growth that we hoped for, as people attend and then go back to their day jobs, reverting to exactly the same behaviours they had before the course, as soon as tasks fill up their working days.

So is there another way to lead?

The evidence shows people are disengaged, staff turnover is high, people that are in role are going through the motions, keeping their heads down, ‘working to live’.  And yet these are good people.  We know, we took the time to choose them.

At Gaia Leadership we have a very clear view on what it is going to take for us to have a long term future in our organisations:  The part must take responsibility for the success of the whole in order to secure its success. At the same time the whole must invest in the part to develop itself.

We need to move away from cultures where the leader has a monopoly on information, knowledge and skill.  Where the leader is in control, holds all the cards, gives orders and has to motivate their co-workers.  That model is no longer fit for purpose.

Instead, regardless of their role, each individual is challenged to take responsibility for the success of the organisation they are part of. And the organisation is challenged to invest in their individuals in order to lay the foundation for their future.

Sound easy?  It is.  If you want to discuss this further then get in touch.  As I said before – our traditional approach is costing business’ money.  And you never know, it might be better.  A lot better.


Olivia Shaw’Partner at Gaia Leadership

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