I was recently having a fascinating discussion with a CEO of a technology company around leadership, the weaknesses and social media as the communication link to their image, when the recently elected president of the United States of America came to mind.
It’s bizarre really, but the facts are: Donald Trump is the first Twitter president of the United States of America.
In an interview with Tucker Carlson of Fox News recently, Trump put into words what many people have long been suspecting, that were it not for his mastery of hyperbole in 140 characters, he would not now be occupying the most powerful office on Earth. “Let me tell you about Twitter,” the president began. “I think that maybe I wouldn’t be here if it wasn’t for Twitter.”
Combine together his followers on Twitter and Facebook, Instagram, @Potus and “lots of other things”, Trump said, and he has the combined ability to publish directly to as many as 100 million people.
All jokes aside, whilst the truth maybe the fact that Twitter, Facebook, Instragram @Potus and other platforms may attract his following of interested fans, the question you need to ask yourself is exactly what cost is his presidency costing the United States just as you could question a CEO of a FTSE 100 company that used Social Media to obtain his or her position in the same?
My company is often being approached by executive boards of companies that question their existing leadership decisions in people, it is clear that people love the title of CEO, but do they have or are able to execute the skills to the business that will make the change necessary to drive the company to profitability and growth?
If we take a look at some basic facts:
• We are in the worst economic circumstances we have faced in almost 100 years
• It is forecasted to get worse before we hit bottom
• There are many organizations who have already executed large scale reductions in force and they will be followed by others
• Layoffs, reductions in force, or whatever you want to call them cause anxiety, trauma and lost productivity
Here are some of the facts about poor leadership costing a loss in productivity to American businesses that I found out in an article published at Harvard Business Review
According to one of the workplace reports by Gallup, 50% of the working professionals in US merely put their time in at office, 20% often represent their discontent via missings their days on job, driving customers away or influencing the co-workers in a negative way. Only the remaining 30% are committed towards their work. What’s the reason behind it? ‘poor leadership’.
In fact, while researching for their book ‘Leading People’, the authors Rosen and Brown came up with the findings that the current state of poor leadership is costing more than half of their human potential to the American companies.
The numbers are self-explanatory as to how much does poor leadership cost a business in terms of productivity.
Loss of human resources
Loss of human resources does not only mean the employees leaving the organisation. Well, that’s the ultimate loss, but a big loss is when the employees are not being used as per their full potential.
Poor resource management is one of the key tell tales of weak leadership, that can bring a downfall for the company. No matter how experienced and expert your resources are, if they are not utilised rightfully they are not going to benefit the business. This will ultimately lead to loss of resources, more so it will bring the loss of your company.
Successful leadership is all about having the right people, with the right abilities, in the right place, at the right time!
Loss of revenues
According to the same report by Gallup that was mentioned in the second point it has been found that poor leadership alone costs American companies a loss of more than half a trillion dollar each year.
According to the Cost of Poor Leadership Calculator created by DDI, a leading firm that conducts corporate researches, it was found out that one poor leader costs leadership around $126,000 over just one year owing to loss of productivity, and employee turnover issues.
Corporations are victims of the great training robbery. American companies spend enormous amounts of money on employee training and education $160 billion in the United States and close to $356 billion globally in 2015 alone, but they are not getting a good return on their investment. For the most part, the learning doesn’t lead to better organisational performance, because people soon revert to their old ways of doing things.
In another survey The Conference Board CEO Challenge®, more than 1,000 respondents indicated that human capital remains their top challenge, with customer relationships rising in importance in the past two years. Also, operational excellence and innovation remain vitally important for driving business growth and ensuring a sustainable future. These challenges, albeit in varying order, were the top challenges in all four regions included in the survey: the United States, Latin America, Europe, and Asia.
When asked about the strategies to address the human capital challenge, 4 of the top 10 strategies CEOs selected are focused on leadership: improve leadership development programs, enhance the effectiveness of senior management teams, improve the effectiveness of frontline supervisors and managers, and improve succession planning. CEOs know their organisations cannot retain highly engaged, high-performing employees without effective leaders who can manage, coach, develop, and inspire their multigenerational, globally dispersed, and tech-savvy teams.
CEOs also were asked to identify the leadership attributes and behaviors most critical to success as a leader. The top five prominent in every region globally were:
• Retaining and developing talent.
• Managing complexity.
• Leading change.
• Leading with integrity.
• Having an entrepreneurial mind-set.
So how can leadership improve?
First, leadership capability efforts are not necessarily hardwired to business strategy. This will always lead to initiatives that are disconnected and inconsistent across the organisation, diluting the overall focus on the core leadership behaviors to cultural and business change.
Without properly aligning current leadership capability against business goals, you miss the opportunity to identify key gaps, running the risk of focusing on the wrong things.
Second, almost all of the focus is on quality of content; how well we execute takes a back seat. This becomes even more difficult when you are trying to scale efforts across the enterprise or across different countries and cultures. According to the Corporate Leadership Council, one-third of a leadership program’s success is related to content and two-thirds are determined by the quality of the implementation.
Finally, despite the best of intentions, many efforts produce no lasting change in terms of behavior and results. Don’t be drawn in by the hype of five-minute videos and digitized options. This type of learning can be engaging, but like a quick-fix diet, they don’t work.
Failure to examine the big data and analytics to help understand (and react to) the gap between existing leadership practices and proven value to the business is a detriment to leadership development efforts. Too often we are still content with the smile sheets and anecdotal data. To be effective, we all need data-driven analyses to execute informed decision-making processes and in real time.
This video on Leadership in the 21st Century and Global Forces by Dominic Barton, Global Managing Partner of McKinsey & Company, will give you another prospective to global and growing trends in ‘Global Leadership’ – The Darden Leadership Speaker Series kicks-off its 2016-17 season with Dominic Barton.
Talking with my business partner in the US, Mark Herbert, we created a check list of priorities that should be considered when making change, which include:
• Leadership development has long been viewed as a cost. It is an investment in your leaders and your business.
• The program is not adopted across the enterprise. If you do not predict and act on issues across geographies and cultures, there will be no consistency and implementation will not succeed.
• Development is seen as an isolated training event or the “initiative of the month.” That’s ineffective if you’re trying to achieve lasting behavior and change. Reinforce learning and sustain the momentum by investing energy and resources to diagnose your leaders and guide them through a targeted journey of experiences.
Marcus Buckingham, author of ‘First Break All the Rules’ and other management “bibles” stated:
“Today’s most respected and successful leaders are able to transform fear of the unknown into clear visions of whom to serve, core strengths to leverage and actions to take. They enable us to pierce the veil of complexity and identify the single best vantage point from which to examine our complex roles. Only then can we take clear, decisive action.”