The High Cost of Poor Leadership


I often use the phrase “poor leadership costs a lot of money and is a terrible waste of human potential.”

I was recently asked by one of my clients to prove it.

So, I put together some statistics on the cost of bad leadership and the upside of excellent leadership.

My Client needed this information so that he could help support making the investment in hiring me to do a leadership training workshop for his organization.

Most people understand that subpar leaders/managers have a negative impact on the organization. However, when you look at how big the cost of poor leadership really is, then you begin to re-examine the importance of leadership development within the company.

In order to review the high cost of poor leadership, I am sharing the information I sent to my client:

Poor leadership practices cost companies millions of dollars each year by negatively impacting employee retention, customer satisfaction, and overall employee productivity.

 Evidence of the High Cost of Poor Leadership

 According to research from the Blanchard Company:

  • Less-than-optimal leadership practices cost the typical organization an amount equal to as much as 7% of their total annual sales.
  • At least 9% and possibly as much as 32% of an organization’s staff turnover can be avoided through better leadership skills.
  • Better leadership can generate a 3-4% improvement in customer satisfaction scores and a corresponding 1.5% increase in revenue growth.
  • Most organizations are operating with a 5-10% productivity drag that better leadership practices could eliminate.

According to Gallup:

  • It’s a sad truth about the workplace: just 30% of employees are actively committed to doing a good job.
  • Gallup’s 2013 State of the American Workplace report indicates that 50% of employees merely put their time in, while the remaining 20% act out their discontent in counterproductive ways, negatively influencing their coworkers, missing days on the job, and driving customers away through poor service.
  • Gallup estimates that the 20% group alone costs the U.S. economy around half a trillion dollars each year.
  • The single greatest cause for employee disengagement? Poor leadership.

According to Harvard:

  • Quite simply, the better the leader, the more engaged the staff. Take the results from a recent study on the effectiveness of 2,865 leaders in a large financial services company.

There was a straight-line correlation here between levels of employee engagement and our measure of the overall effectiveness of their supervisors.

The best leaders (those in the 90th percentile) were supervising the happiest, most engaged, and most committed employees — those happier than more than 92% of their colleagues.

Get your free E-Book to learn more and get tips on fixing this drag on your bottom line.  

Want to fight back against the culture of contempt? Here are 3 actions to get you started:

Arthur Brooks is one of my favourite thinkers and writers.

Though we have never met, I would love the opportunity to sit, enjoy a meal and a fine scotch with him, just for the sheer joy of the conversation. 

Brooks believes that America is being torn apart, but the problem isn’t one of incivility, intolerance, or even anger.

He says the problem is contempt.

Defines as the conviction that those who disagree with us are not just wrong, but worthless.

Arthur Brooks explains why contempt is so destructive and offers three rules to follow to overcome contempt with warm-heartedness in our own lives.

Read about being kind as a boss

He offers practical suggestions for how to fight back against the culture of contempt.

Here are three to get you started:

1. Practice the 5 to 1 rule. Offer five positive and encouraging comments for every one criticism, especially on social media. You’ll be amazed at how changing this one aspect of your interactions with others improves public discourse.

2. Stand up for people who aren’t in the room. It’s easier than ever to bash the people who disagree with us, but it only foments contempt. If your friends who agree with you start mocking people who disagree with you, don’t be a jerk, but stand up for those not represented.

3. Ask yourself who in your life you’ve treated with contempt, and make amends. Contempt creates a vicious cycle, but by acknowledging how you have hurt others with mockery or dismissiveness, you’ll be able to repair relationships.

Brook’s details all of this and more in a short, animated video about why contempt is so destructive and what we can do to fight back against it today. You can watch it here: https://youtu.be/8dv1ORTvm8w

What about you?

Where can you demonstrate warm-heartedness in our own life?

Should A Servant Leader Ever Fire Someone? Yes! – And Here’s How & Why

While teaching leadership at Mount Royal University, my class had a great discussion about Servant Leadership and discipline.

Read about the myths of servant leadership

We explored one student’s situation: She has an employee who was good at her job but had a toxic and nasty attitude towards her employer, her co-workers and her work.

Sometimes, angry and negative people appear to do a good job, always at work, always on time. They are careful not to be too critical when supervisors or managers are around but are quick to spread rumours and try to supersede management at their discretion.

As we talked, I suggested that the employee was good at her tasks; but terrible at her job.

Leaders who struggle with effectiveness misconstrue servant leadership as never having to enforce a standard or discipline an employee. 

Servant Leaders maintain standards and team norms to maintain high employee engagement and, in turn, does not allow mediocrity. 

By allowing this miserable person to carry on without consequences creates mediocracy throughout your team.

 

Can You Fire a Poisonous Employee? 

The short answer is yes.

But this is a time to get help.

You needed to get your boss and HR team involved. There are legal, labour-relations and possible human rights risks to the whole organization by mishandling firing someone. So be careful.

More importantly, the ‘problem’ employee needs to be treated fairly and with respect.

There is a possibility they have never been called out on their behaviour. Maybe, just maybe, with the right coaching, mentoring and good performance management you can help turn this person around.

To be honest, the odds of rescuing the employee are poor, but they may deserve the opportunity to improve their performance.

 

Step One: What to Say When Sitting Down for a First Meeting

While you may have counselled the employee in passing (“Hey, I noticed you were very negative at that meeting”), this is the time for pointed and directed information.

It is possible that they don’t realize just how negatively they are coming across to co-workers, so ask questions and find out what they are thinking.

Some approaches work better than others, but using the model of Facts, Feelings and Future is useful when having awkward conversations.

Read about the 4 F’s

Try this script:

“I’ve noticed you are unhappy and speak quite negatively about your job and the other people who work here. For instance, I’ve noticed that while you’re always polite face to face, you’ll say negative things behind people’s backs.”

 “Part of your job is building good relationships with co-workers, and your behaviour undermines this. What can I do to help you in this area?

The question at the end will allow your employee to speak up and share their grievances, which, most likely they will have. Here’s the thing: Be compassionate.

 But at the end of all the sympathy and compassionate communication, you need to come to this: “Regardless, the behaviour is inappropriate in this office. We value your work, and we don’t want to lose you, but if you cannot pull this together, we will terminate your employment.”

Document the time, date, and content of the discussion. At this stage, you can present them with an official performance improvement plan document that details what is expected.

 

Step Two: Implement a Performance Management Plan with the Employee

You want to implement a Performance Management Plan that stresses progressive discipline.

Read about performance agreements and charters

This is where you follow a series of steps, with the idea that if the employee either improves or is terminated.

 

Step Three: Follow up

You should never expect instant perfection from an employee in the performance improvement process. After all, it takes an effort to change, and it took a long time to get here.

This is precisely the time when you must become a micro-manager. If you notice poor behaviour, correct it at the moment.

Read why micromanagement is a good thing

Regardless schedule a formal meeting every two-weeks during the performance management plan, if they are making significant progress, congratulate them. If they are not making progress, this is where the “progressive” part of progressive discipline kicks in.

Present them with a written warning. This should include details of the problems they need to resolve as well as the information that if their behaviour does not improve, your organization will suspend them and then terminate their employment.

Explain that this warning is being placed in their employee file. Ask them to sign to indicate that they have received this warning. They may object, saying that they disagree with what is written. You can explain that their signature doesn’t mean agreement, but rather that they received it.

 

Step Three: Termination

If the behaviour does not improve, it’s time to let your negative employee go.

You might be tempted to keep them on, understand that if you do not act, you will have no power over this employee ever again. They will know that they can do whatever they want to, and you won’t do much.

You may also have to provide some amount of severance – Get legal or HR advice. It is galling to pay a  problem employee on their way out the door. But remember the organization failed the person by misfiring or not managing them properly, and a small severance may show good-faith if the employee decides to take legal action.

 

Final Thoughts

If you say, “But I can’t afford to lose them,” think again.

Negative employees who gossip are damaging to your whole department. Your other employees are more likely to quit and are not as engaged as they would be if they were in a functional department.

The Servant Leader owes it to all employees to take care of this poisonous employee, which means firing them if they either refuse to or are unable or unwiling to change.

The 4 F’s (And @#$% isn’t one) of dealing with a boss with low EI

How to Deal with A Boss with Zero Emotional Intelligence

For most of my career emotions were something to be avoided like the plague.

Emotions were acceptable only when a bone was sticking out of you.

The only undeniable truth in life is that we are human and by definition we are emotional.

Our partners, children and even our pets sense our emotion and learn how to respond when we are sick, happy, sad or distracted.

read about sharing information

But what about work?

To work with people with low Emotional Intelligence, you need to learn how to communicate differently.

You might already know that emotional intelligence can influence your job success, but what can you do if your boss comes off as an emotional void?

Don’t panic, the situations more hopeful than you think.

But brace yourself have to have an awkward conversation.

What is EI?

When you say that your boss has low EI, it could mean:

  • that she’s unconsciously cruel – think The Devil Wears Prada; or,
  • he doesn’t know what their team needs to do their best work – think ‘The only time no is an OK answer is when you if asked if you have had enough.’

If your boss has low EI, they struggle to read your emotions.

They miss the non-verbal communications you are naturally sending them.

Alternatively, someone with high EI will have four skills. They:

  • Accurately read their own emotions: they can perceive the emotions with their and the experiences of others.
  • Use passion to facilitate thinking: if they need quiet to focus, they put themselves in a calm place
  • Understand how emotions progress: they know irritation leads to frustration, which inevitably leads to rage
  • Regulate their feelings: they don’t become overwhelmed by their feelings

EI doesn’t equal being good!

EI is not about virtuousness: it’s more about being able to understand your and others’ interior lives and how your actions and environments affect them. To work well with people with low EI, then, you need to accommodate that misapprehension.

 “Emotions are information, people who are low in EI are lacking the ability to take in, understand, or process a critical part of the way that we communicate in the world.

 If they can’t read your emotions, they won’t be getting all the info you’re naturally sending them.

 They’re missing this information, so you have to clarify.”

 –    Professor Sigal Barsade: University of Pennsylvania

So, what do you do?

 Book an appointment with your boss. Then you can follow this framework for sensitive conversations using the 4 F’s:

  1. First: When you make the appointment, say that you want to have a conversation that will be valuable to your working relationship
  2. Facts: Begin the meeting by retelling what happened for each of you
  3. Feelings: Tell the impact that the meeting had on you
  4. Future: Help each other figure out what you could do differently and what can be done by everybody to address the situation

Don’t forget to end on a high note: share why it’s such a good thing you two had the conversation.

By facing your bosses low IE with a conversation like this, you can help people to see that information that’s before them.

Read about partnering with your boss

Leader’s Brief – 4 Questions To Help You Lead Through Rapid-growth

Imagine

Imagine going to bed one evening.

You cuddle up with your loved one and sleep peacefully.

You get up, pour a coffee and turn on the news.

A reporter advises you that your team has just grown by a factor of 4; your operating budget ballooned by ten times; and, your team is headline news with the world watching your every move.

When I led a large disaster response organization, this was my nightly reality.

It happened with great regularity, and pulling together a team on a moment’s notice and grow the business to respond to the disaster was exhilarating as any rush you could imagine.

 

Reality

Most business leaders do not face that level of overnight growth, but what CEO doesn’t dream of dealing with rapid business growth.

The energy and excitement when everything you touch seems to turn to gold are way more appealing than saying no, dealing with falling revenues and laying good people off.

Over the past few years, I have worked with many leaders who have grown their organizations several times in size.

To a person, they are energized by the growth. But they were equally frustrated by the disconnect between strategy and operations; stymied by broken lines of communications; and, falling employee morale.

Whether you are navigating a booming startup or a long-established organization, leading through periods of rapid-growth is hard work.

This article will explore those challenges and offer ideas to help you succeed.

 

What are the challenges?

1 – Speed – When everything is moving so incredibly fast it seems impossible to pause and think. Rapid-growth creates a vortex that sucks up everyone’s time and energy leaving little time to do anything but survive each activity and get to the next.

Speed becomes a stimulant, with people striving to move faster and faster, but testing the team’s limit to execute.

2 – Shortsightedness – The collective view becomes shortsighted. Everything in the immediate foreground is crystal clear and yet things more than a few days or weeks away seems off far off over the horizon.

Forward thinking and strategic planning are almost impossible in this chronically myopic environment.

3. People Processes – In the high-growth environment, people processes break down. Onboarding is fast and furious. The focus becomes on getting bodies in seats.

Leadership development stops being

individual contributors and left to sink or swim as collective contributors.

Managers end up in over their heads feelings.

 

Consider These 4 Questions to Mitigate the Challenges of Rapid-Growth:

1 – Who’s eyeing the future? Somebody must be accountable for looking beyond the moment and towards the future.

The CEO or Executive Director is responsible for the long-range view and must hold the senior managers accountable through dialogue and clarity of strategic instructions.

2 – Who’s watching the store? It is essential to have someone focus on the business functions (processes, infrastructure, and quality) because rapid-growth can only be successful unless it built on the organization’s existing foundation.

Somebody must be responsible for fighting inertia, push continuous improvement, eliminating bottlenecks and ensure that the organization’s support functions and future investments are done based on future needs.

3 – Who’s looking after talent? In times of rapid growth, there is a tendency to hire and promote fast and sort issues out later. Trust me when I say there is a very high cost of ignoring hiring, and development processes.

Consider distributing this burden to the all your employees by actively involving them in recruiting and onboarding new team members.

4. Who’s building the culture? To be an effective leader, you must understand the power your values are as the reference point to everyone who works with you. 

If you compromise values for expediency, you send a signal to the organization that they are just so many words. Use them in every aspect of organizational culture: from hiring, firing, resolving problems, serving stakeholders and growing the business.

 

Final Thoughts

There is nothing more exciting than living through a period of rapid growth.

It is like lashing yourself to a bucking bronco and hanging on for dear life.

For leaders, cool heads must prevail on the issues of strategy, talent, operations, and culture or the trashing can break your organization’s back.

Why You Are Preventing Your Own Success? – 3 Actions To Get Out of Your Own Way

A client asked, “What is the one roadblock I will encounter when improving the culture of leadership in my company?

I responded, “You.”

My client is bright, smart and successful, yet she could not break free to the next level in business.

Quite frankly she was her own trip wire.

My client:

– wanted to know what’s going on with every initiative and project
– tried to be personally acquainted with all the customers
– wanted to master of all the technology of the business
– wanted to feel like the hero, because no one can do what she can do

My client is doomed to a life of Sisyphean tasks with little hope of business growth, financial freedom, or the ability to take some time off.

Read more about Sisyphus and leadership

The more of the leader that is necessary to operate the business on a day to day basis, the smaller the business will remain.

Once we identified that my client was getting in her way of reaching their potential, we agreed that she had two choices.

1. Get comfortable with being the “key” employee and never achieve the kind of time and money freedom she wanted; or,

2. Choose to make a permanent adjustment that will transform their company forever.

Since I have been a part of helping leaders transform their leadership experience, I can reveal the three time-tested steps to get out of your way and achieve success.

Look in the mirror – Explain to yourself and your team that you are the limiting factor of the business. By being a micro-manager, technician, loving status quo, wearing too many departmental hats, always the hero, you have been holding back the success of the business, but now it’s time for a change.

Read More About Being Self Aware

Lead – Leadership is void when you are too busy doing the work of the business, but now you must be strong and decisive. To galvanize this strategic shift how you conduct business create strategic objectives that will provide direction to the team.

Read more about  taking action

Enable – Actively engage your team by changing your language from instructive to intentional. For example, tell your team that you intend to achieve an objective and ask for them to provide the how.

Read more about enabling people

The key in all three of these steps is in realizing that you must take action because no one else in your company will do it for you. For the few, the brave, those who pursue excellence and not status quo, now is the perfect time for a change.

Great leadership always comes from looking down on your business honestly.

What type of leader are you?

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