04 Jan Organizational Starvation. Why a Few Companies Will Overcome.
All things being equal, a company with great leadership is more likely to win the war. All things not being equal, a company with great leadership is far more likely to win the war.
Want to know the best predictor of your company’s success over the next decade? Here’s a surprise for you – it might not be the products or brands you tout, the nature of the industry you are a part of, the interest of investors, or even the emerging technology that promises your firm competitive advantage for the next five plus years. It might be safe to say that even the greatest strategies or business models will pale in comparison to one factor that seems timeless – but remains a confounding stumbling block for all but the very best organizations.
The best success predictor might be found in how effectively you first identify and then develop the leaders in your company – and there’s significant data to back that claim.
Transformative managers’ impact on a firm’s future continue to be far more profound than most assume – particularly as regards their impact on the true drivers in every company – the people that constitute its work force.
Gallup CEO Jim Clifton offers this stunning reminder to senior leaders in that regard, “The single biggest decision you make in your job — bigger than all of the rest — is who you name manager. When you name the right people to manage your company’s workplace, everything goes well. People love their jobs, your customers are engaged, and life is great. When you name the wrong person manager, nothing fixes that bad decision. Not compensation, not benefits — nothing.”
That same caution should be offered at every level – to include the company’s board of directors – as they select their organization’s senior leaders.
Mediocrity does more than attract mediocrity – more often than not it actively recruits mediocrity.
And here’s the truly chilling factor – Gallup asserts that 82% of the time we get it wrong – failing to select supervisors, bosses, or even CEOs with the requisite leadership qualities to ultimately ensure followership – or even employee engagement.
The cost – something north of $500 billion in this country alone. Let’s put that another way – over 70% or our U.S. work force is disengaged – somewhere between no interest and full burnout. For the most afflicted – up to 1/3rd of their paycheck is lost through lack of productivity.
Here’s an example – if you are paying a $100,000 salary to every employee in your firm of 100 employees (a very, very high figure to be sure) you can assume that at least 17.2% of your staff are thoroughly burned out and mentally “bye bye.” For that group you’re losing – at minimum $584,800 in salary that walks right out the door with no return. (Gallup estimates $3,400 for every $10,000 in salary for the full burn-out employees.)
For those less afflicted but still disengaged, the loss is something less.
Net net – full pay to your 30% that are engaged – and a massive giveback from the 70% that don’t want to be there.
And the greatest single reason for their burnout – the leader or leaders they report to.
Twentieth century leadership guru, visionary, and social scientist Peter Drucker is often associated with the following quote:
“Culture eats strategy for breakfast.”
If Drucker was indeed correct, here are a couple of key morsels for the organizational cereal bowl that demand the attention of every senior leader – and soon.
- Almost every company of size boasts an organizational strategy – replete with brand projections, earning’s estimates, and marketing plans. Few companies boast a cultural strategy – beyond the mandatory vision and mission statements; time worn values and philosophy mantras; or typical “feel good” ways of working declarations that dot every hallway in every lobby of every company in this country – or the world.
- Fewer can point to a people strategy – one that articulates basics such as:
- The profile of the people/employees we want to be a part of our future
- How we will work with one another – and the values we will honor and respect
- Our people leader profile – to include:
- How we will source leaders
- How we will develop leaders
- The competency model that will frame what we expect of leaders – at every level
- How we will nourish leaders in their journey
- How we will measure/assess our people strategy over time – to include:
- Vehicles to assess employee engagement
- Models to provide purpose, direction, and practical tools for career and career development
- Channels that ensure transparency, communication, and collaboration across the organization (the great stumbling block for most large companies)
- Metrics to accurately gauge progress (or lack thereof)
Leadership, many companies will argue, just “is”. Just as many will assert that culture “happens.”
To a degree they are correct – leadership, even poor leadership, will always be there…and some kind of culture will certainly emerge – whether toxic or otherwise. Our challenge – to make decisions that ensure we embrace the foundational points that have always made great companies great.
Some companies will – a vast majority won’t. But if Drucker was right – and the numbers continue to prove his point a half century later – for a few enlightened organizations there is a table waiting to be set.