One of the greatest threats to an organization is a lack of quality leadership. We read, hear, and talk about it all the time, but we never find a way to solve the “leadership issue.” Amazon.com lists more than 63,000 titles when you search for books on leadership. Clearly, a lot of people have a lot of ideas about what makes a good leader. I recently conducted a survey of several hundred national organizations regarding what the most important areas for improvement. The results clearly ranked leadership is the number one issue. Although the current economic environment was the most important issue for 21 percent of respondents, approximately 46 percent of respondents said the biggest issue is leadership in their organization.
We know that a good leader creates value in a number of ways: the leader’s own productivity, productivity of direct reports, and overall organizational productivity. A poor leader can impact all three areas by not meeting his or her goals, inhibiting the work or losing direct reports, as well as not contributing to the success of the organization as a whole.
Think about those that have left your organization in the last few years. How many people left because they could not perform at a high enough level to stay compared to those that could no longer accept poor leadership from their immediate supervisor? Most surveys indicate that poor leadership skills of a supervisor are one of the top three reasons an employee leaves an organization. The average cost in recruiting, lost productivity, and training for replacing a professional level employee varies between $12,000 and $40,000 in most industries. I have worked with numerous organizations where a single, poor leader resulted in significant turnover. Moreover, I can think of more than a few organizations where those that left in a single year would form one of the best and most formidable teams in their respective industry.
Leadership is the biggest organizational challenge, has been, and stands to remain so in the future.
This is not to say we have not made some headway with new theories, more training, and better tools for identifying, challenging, and refining leaders. The good news is that academics and practitioners are getting closer to identifying what does not work even if we do not have the definitive list of what does. Over the next several weeks, our blog will discuss the Ten Failures of a Leader in order to explore what research have shown regarding those behaviors that are least desired in a leader.
Like many people, I enjoy hearing what other people do for a living. To feed my curiosity, I will ask fellow passengers on planes about their occupation. Several years ago, I met a man on a flight that worked with animals for the television and movie industry. His favorite animal to work with was an old tiger, Shalimar. He described the tiger as one of the smartest animals he had ever worked with and seemed to glow like a proud father as he described the tiger’s acting ability in various commercials and television programs. What could have been short conversation turned into a lengthy discussion of animals, changes in broadcasting, and public preferences for television and movies. As the plane prepared to land, I returned to the beginning of our conversation and asked him what happened to Shalimar after his career. He smiled and looked away before telling me that one evening a handler accidentally failed to place the secondary or safety lock on the cage and the large cat escaped. He said the cat was no found for a long time. At first I was so shocked by the idea of a tiger strolling through a crowded residential neighborhood or appearing in the supermarket parking lot that I didn’t see the irony of the animal after many years and considerable human interaction would just leave.
As I have worked with employees in various organizations over the last year or so, the level of unhappiness has significantly increased. One of the most common statements made by employees of all types during focus groups is “just wait until the economy comes back” or “guess what I will do when there are more jobs!” In these changing times, employees feel that their employers have broken their commitment to protect them. The reasons for this feeling vary, but the core relates to the lack of resources, recognition, rewards, and stability in most organizations. Given these conditions, there is a huge wave of current employees patiently waiting to “leave the cage” of their organizations when things improve in the job market.
How many will seek new opportunities?
The Bureau of Labor Statistics recently published Job Openings and Labor Turnover Survey Highlights (August 2010) to summarize the current labor market situation. Chart 3 on page three of the report summarizes the seasonally adjusted level of new hires, total separations and employment from 2000 to 2010. The gray area represents the two recessions over the last ten years. From 2001 and 2007, there were between approximately 4,500,000 and 5,500,000 separations with new hires trending in a similar manner to the non-recessionary years. The level of separations dropped more than 25 percent during the recession. When the economy recovers, it is likely that separation patterns will return to similar levels and experience a bump in separations as employment rises. When combining separation data with employee opinion data, the percentage of workforce interested in leaving ranges between 21 and 64 percent.
The tiger is likely to escape in the future. What can you do?
There is a lot of discussion of employee engagement in the media right now due to workforce reductions, concerns with a jobless recovery, and general distrust in major institutions. Generally, when we talk about engagement, the concept refers to the level of commitment an employee has to the ideals, objectives, and performance of an organization. An engaged workforce possesses a sense of ownership in the activities and values of the organization, shares a sense of ownership with coworkers as well as the organization, and links their individual success to the organization’s success. Being engaged requires high levels of energy as well as leveraging available capabilities to ensure that outcomes are accomplished in the best manner possible.
Change is the order of things, but the move to a more “mercenary” workforce has clear and significant implications for engagement. For illustration purposes, I want to draw on the experience of a family friend. A family friend recently became engaged and gave his fiance a beautiful ring. He had spent months looking for the perfect ring and was very excited about presenting the ring to the love of his life. Our friend’s fiance agreed to marry him to his delight and they jointly entered into the pre-marriage period. Like many couples, the ring is symbolic of the commitment they have made to their relationship and being together. It is an outward sign of their exclusivity and the bond between them.
As I talk to various employee groups around the country, most feel that they entered into an agreement similar to our friend’s engagement when they joined their current employer. They relay stories of the hopes they had about joining their current employer and all the opportunities that would be made available to them. However, they say with time the ring was taken away. The reasons for the removal of the ring vary, but it all equates to the same thing: a promise broken and a wish unfulfilled.
How do we counter the feeling of the missing ring?
There are things that employees value in addition to commitment and stability. Some of the big ones include:
Flexibility to meet or balance work and personal needs
Positive interaction with coworkers and supervisor
Feeling of fulfillment related to the work performed
As the recession continues, many organizations are considering how to increase employee engagement to meet current needs with fewer resources. Research has repeatedly shown that an engaged employee is more productive, motivated, and satisfied. For example, the Hay Group in 2002 in “Engage Employees and Boost Performance” found that engaged employees were 49 percent more productive than those that were not. The dilemma arises from how to create stability and certainty in very unstable and uncertain times.
An economic downturn causes a number of challenges to engagement: greater uncertainty, workplace instability, and personal life difficulties. How often have employees come to you in the last year or two and expressed their fear and frustration with not knowing what will happen next in their work or personal lives? What assurances were you able to give them?
As managers and employees are being asked to do more with fewer resources, there is less time to participate in activities that actually reduce the impact of uncertainty and anxiety while improving engagement. With the limited time we do have, it is critical that we invest in people during a time when people need support the most. What can we do?
• strengthen relationships;
• show empathy and support;
• increase communication;
• exercise flexible;
• instill a positive outlook; and
• acknowledge their commitment.
Start with one or two things a day from this list and help engage the workforce when they need it most.
Welcome to the Human Capital Adviser. The goal of our blog is to offer timely, interesting, and practical discussion on innovations and best practices in human capital management. Please make suggestions, add comments, or recommend topics and join us in exploring how we can improve our organizations as well as the lives of those that work with us each day.