A few columns ago in A Challenging Time For Talent Management, I recalled the decision of Paul Polman to scrap quarterly reporting. His reasoning, in part, was to create the space necessary for better decision making. It was a bold and sound move, but sadly one most managers are not able to make. As a result, “leadership” in many organisations is blighted by knee jerk responses to the latest crisis with managers only as good as their last quarter or month. In such a context, I use the term leadership advisedly, hence the quotation marks.
At the C-suite level, a manager must not only be able to lead their team, but more critically lead themselves and their peers. To add another level of difficulty, in large organisations, they need to do this at scale and all while exhibiting a high level of self-awareness, profound comprehension of others, and a detailed understanding of the operating environment.
In A Challenging Time For Talent Management I observed:
Why I think it without hyperbole to compare the process to a tightrope walk is because the data is in and the traditional 20/80 rule, which stipulates that 20% of employees deliver 80% of organisational value, is incorrect. Research shows it is closer to 5% of employees delivering 95% of an organisation’s value. This is because, particularly in the case of highly complex roles, the value to effort ratio clocks high performers as being 800% more productive.
Given the complexity inherent in senior organisational roles, it should come as no surprise that the 5/95 rule is writ large. For CEO’s, 90% of the value in their industry is created by the decision making of the top quintile. Yet the CEO role is not only decisive in the realm of economic value because they can scale leadership throughout the organisation by appointing senior leaders who in turn appoint line managers. The latter of whom are the facilitators or blockers of employee performance and experience within an organisation. Thus, failure to get it right at the CEO level means it will be down to luck rather than good management when it comes to organisational achievement and employee engagement.
This is particularly the case in these turbulent post-Covid times when leaders need to do more than rehash policies and procedures that worked in the past. Competency demands are also on the rise, with successful leaders needing to show high capacity in the traits of personality, self-concept, drive, integrity, leadership motivation (will to power), knowledge of the business, IQ, practical intelligence, and EQ. The last of these traits is coming to the fore as leaders are increasingly expected to connect with people and issues, rather than merely take them into consideration. In some senses this is Corporate Social Leadership, or the ability to understand and empathise with the shared values of stakeholders so they can be more effectively integrated into the business.
Alarmingly for organisations, survey data shows senior leadership teams to be well short of these expectations. By one account, only 25% of survey respondents considers the leadership at their organisation to inspire employees to be their best. Talking with managers, and reading through the mass of survey data that is churned out on the topic, three areas of opportunity emerge as the cause of leadership shortcomings:
- Role Modelling: that is managers who build respect within their teams and consider, even if they are prevented from acting on, the moral consequences of their decisions.
- North Star: providing teams with a clear and unifying vision of the future. But doing so by going beyond mere optimism by having a viable plan for implementation and achievement of the objectives.
- Mentoring: not merely teaching an employee skills or a company specific processes for doing a job. Instead, being a mentor who listens to and can cater for individual employee needs. Helping them to understand the political landscape of an organisation and, yes, even helping them get a role outside of their current team or company.
Yet while so much is known, managers find themselves consistently unable to fulfil these core needs. Some shortcomings are down to individuals, people with very low EQ or IQ in senior roles and who fundamentally do not care about their employees — beyond what is required of them in today’s “caring” organisational culture. In other instances, there is a clear lack of incentive to stimulate talented managers to be their best. When coupled with an emphasis on short term decision making, it is little wonder why so many organisations are struggling.
No matter the causation, different outcomes will always rest with senior leaders, usually the CEO, to drive change. Be it replacing “leaders” incapable of the capabilities required for outstanding leadership or creating the incentives required to unlock their team’s potential. CEOs who are too externally facing, that is leave their senior leadership team to “run” the organisation while they almost exclusively deal with the board and external stakeholders, are at risk of allowing silos to spring up as managers double down on their own departmental success at the expense of creating more collaborative and open intra-departmental networks.
In opening this article, I observed two essential elements for successful leadership are needed:
- A CEO who is fearless in leading change and rich in capabilities so they can Be Bold With Efficiency Aspirations.
- C-suite managers who are not only able to lead their team, but more critically can lead themselves and their peers by exhibiting a high level of self-awareness, a profound comprehension of others, and a detailed understanding of the operating environment.
When in place, these elements unlock the notion of leading at scale. That is going beyond an individual or team and creating an organisation infused with a discovery mindset that can run multiple initiatives in parallel. A process than only works once a manager steps out of the role of controller, exerting micro-management over team actions through constant planning, alignment, and update meetings, and instead moves into the role of mentor, facilitating their team to deliver on objectives through autonomous work. This latter approach is easier said than done, as it requires a team of employees schooled in the art of management by objective and self-control and who are infused with a mindset that supports progress over perfection so that learning and experimentation are their constant watchwords.
When leadership is exerted in this form, organisations become increasingly accountable, agile, and autonomous — all the while operating at scale. At this point, an organisation can truly be described as ‘purpose-driven’, a state that creates a virtuous circle with employees four times more engaged than in other organisations — a genuinely awesome competitive advantage.
Good night, and good luck.