How Great Leadership Traits Can Squelch Employee Commitment

Three leadership capabilities—strategic vision, supreme confidence and top-notch communication skills—go unquestioned as ones necessary to become the business world’s next Jack Welch. However, this troika of traits actually can be toxic for business leaders. 
By Gershon Mader and Josh Leibner 
eadership books abound these days, imploring managers to be agile, set stretch goals and focus on execution. Three leadership capabilities—strategic vision, supreme confidence and top-notch communication skills—go unquestioned as ones necessary to become the business world’s next Jack Welch.


  Yet our experience in coaching leaders during the past 20 years actually shows that this troika of traits actually can be toxic for business leaders. When a CEO, business unit general manager or a functional head wants employees to embrace and adopt a new strategy, those who take their vision, confidence and communication skills to an excess can actually erode the commitment of their people.

  How can that be? Doesn’t every great leader have to know exactly where his organization needs to go, exude assurance that he will get them there, and eloquently explain the destiny and the path? Not if he wants employees—from his senior leadership team to the frontline worker—to pull out all the stops in making the strategy work.

  By the way, rest assured that leaders increasingly need their people to go beyond the call of duty these days in implementing new strategies. Initiatives to improve operational efficiency, increase organic growth and achieve other key goals are increasingly complex and have shorter time windows to hit.

  To understand why these three leadership traits can be damaging to securing employee commitment requires dividing leaders’ job of gaining commitment into two categories: issues of content and context.
  Every leader of a large-scale strategic initiative must sell his followers on the plan itself—what we call the content of the strategy. There are two basic content issues for leaders: demonstrating to employees that the plan is valid (that it is necessary and the right plan) and communicating the plan in language and concepts they understand (in other words, having clarity).


  If employees don’t feel the plan is valid or don’t understand it (and therefore can’t determine whether it is valid), they will not commit themselves to implementing it. That doesn’t mean they won’t appear to commit themselves. They will, in fact, nod in agreement when leaders tell them the plan is critical, and they will outwardly accept their responsibilities for executing it.

  But even if the plan appears valid and clear, if leaders don’t address the context issues employees won’t embrace their duties. The context issues are the perceptions of those who must implement the strategy—their views about leaders themselves. Four fundamental perceptions set the context: leaders’ credibility and sincerity; their courage to raise and address difficult problems and make difficult decisions; their competence in creating and executing the strategy; and their care and concern for those who will be affected by it.

  Most leaders believe that getting the content issues of the strategy right is all that’s required. Hence, they ignore the context issues. However, if employees have doubts about the honesty of their leaders, they will question just about anything they say about a new strategy—the need for it, how it must be done, when it must be accomplished, etc.

  Employees also won’t get behind leaders whose courage and resolve they question. By this we mean the leader’s willingness to address the problems that will confront a new strategy and to make tough decisions (like removing people who are roadblocks).

  If employees believe their leaders are courageous but not competent, they too won’t get behind the strategy. That’s because they won’t believe that management will make the right decisions. And employees who question whether leaders care about them will ask themselves, "Is it worth it?" and "What’s in it for me?" 
Leaders who possess a grand vision for their strategies tend to make the development of the strategy an exclusive process, often blocking out key members of the top management team. When the strategy is wrapped up and handed to other management team members (and people below them) in a pretty box and bow, they will wonder what’s ticking inside.

  The CEO of a $1 billion company felt his HR, IT, finance and legal department heads had little to offer in developing the firm’s strategy. Instead, he brought in five business unit heads to create the plan. This came back to haunt him.

  The failure to get the support functions involved upfront resulted in their dropping the ball when it came time to implement the plan. They had neither the understanding of nor commitment to the plan that was necessary for it to be adopted rapidly. Rather than speed up the whole process by excluding the support functions from it, the CEO’s exclusionary habits actually slowed down the organization’s adoption of his strategy by a factor of two.

  Contrast that with the style of Dave Mezzanotte, chief operating officer of CHEP. In 2004, to get his $3 billion pallet and container leasing company to implement a strategy of operational excellence, he purposefully included a broad range of managers up and down the organization in determining how to make the company’s sprawling operations more efficient. Mezzanotte never told them he had the grand plan. Instead, he explained that he needed their help in coming up with it.

  "It’s foolish for any CEO to think he or she has all the answers," he says. "Increasingly, business leaders have to use the knowledge of the entire company to set a good direction—and make midcourse adjustments to it."

  Two years later, CHEP’s operating and financial improvements have been remarkable, including a 15 percent increase in return on capital (to 25 percent), and a $220 million increase in free cash flow.

  The leadership trait of supreme confidence can worsen how employees perceive their leaders’ sincerity, competence and courage. Leaders who exude confidence at all times tend to minimize problems or discourage them from being discussed (often unconsciously).

  When he is convinced that every aspect of the strategy is correct, the leader sends off signals that he isn’t open to feedback or criticism. Employees thus correctly believe that their leaders will dismiss problems that occur in implementing the strategy or fail to adjust it. That brings leaders’ competence into question: Will they make the right decisions? Leaders who wear their confidence on their sleeves are not likely to make corrections to their strategy for fear it will reflect poorly on the original plan.

  The CEO of a large services company displayed supreme confidence in just about every employee interaction he had, which had the effect of making him virtually unapproachable—particularly when he was wrong. When he unleashed a major initiative on his executive team to increase revenue and cut costs, their real commitment (i.e., what they say behind his back) was nearly zero. The initiative did not reach its goals.

  Finally, leaders who are brilliant communicators can find their oratory and writing skills a commitment barrier as well. The more scripted and polished their communication is, the more those troops will wonder about what’s not being said, especially about the impact on them. Authentic—not slick—communication commands the attention and respect of employees. 

  A large financial institution’s cultural change initiative shows what happens when communications get too fancy. The company spent a million dollars on videos, banners, brochures, posters and town hall meetings to change the firm’s culture. Everything was scripted for the CEO, who merely lent his name to the effort.

  Big mistake!

  The executive team and managers levels below it were turned off by all the packaging and no live, direct words from the CEO. Not until the CEO took hold of the campaign and made it his own, including articulating the culture values he wanted the firm to uphold and talking directly with his management team, did his employees put stock in it.

  In 2003, the way Steve Linehan, head of treasury operations at financial services giant Capital One Financial Corp., got his beleaguered staff to get behind a two-year plan to significantly improve treasury performance was to speak plainly about the challenging working conditions within the group and take meaningful actions to improve them. His associates were far less concerned about the way he expressed his plan—and far more concerned that he recognized and understood their issues.

  "People in this business are way too smart for corporate-speak," Linehan says. "They want honest, from-the-gut answers. You’ll lose them with anything else."

  During the next 12 months, his function’s environment and performance improved dramatically. Associates worked hard to "fortify funding," one key area of focus. They bolstered processes and risk management controls and worked closely with external investor groups. All this helped Capital One achieve an upgraded investment rating and significantly decrease cash management costs.

  Grand vision, great confidence and eloquent communication skills are certainly leadership traits to admire. But in times when a company or a business function within it must change course dramatically, leaders who take those traits to excessive ends will find few employees who will truly get on board.

  Letting the management team (and even workers below) help craft the vision, admitting that one doesn’t have all the answers, and speaking genuinely will go much farther in getting employees to embrace and adopt the strategy.

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Gershon Mader and Josh Leibner are principals of Quantum Performance Inc. (www.quantumperformanceinc.com), a management consulting firm that helps major organizations generate commitment to their strategies. To comment on this article e-mail editors@workforce.com.

Can’t afford to reward?

Can’t afford to reward? 

The reality is that – especially in a tough economic climate – you should continue to reward, especially if you want to keep employees motivated and retain talent. Yet according to a Hay Group survey earlier this year, around 30 to 40 per cent of companies have considered freezing base pay as part of their response to the current economic downturn. 
 
So how else can you reward staff? Tom McMullen, a Hay Group vice president and co-author of The Manager’s Guide to Rewards (AMACOM 2007), offers some telling insights – particularly about the vital role line managers must play in communicating the full range of rewards available.
 
Tom McMullen: Once you announce a freeze on base pay, the message your employees often take is that no matter what they do, they won’t get rewarded. In most businesses, that clearly isn’t the case: they have carefully designed reward strategies that offer a range of rewards, from incentives to stock shares to career development opportunities and various forms of recognition. 
 
So if these rewards already exist, what’s the problem?
TM: To be brutally honest, ignorance – brought about by not knowing that the programs even exist to how they are to be used for employees. In all too many businesses, reward models that look great on paper fail to deliver the intended results. That’s down to ineffective implementation. Employees don’t know what rewards are available, or what performance and behavior is required to earn them. 
 
How can businesses deal with this?
TM: The first, crucial step is to make sure that line managers across the business are aware of the organization’s total reward framework. Earlier this year, we conducted a major survey of over 1000 organizations in 78 countries, looking at the roles played by both HR and line managers in supporting and implementing reward programs. Only between 24 to 41 per cent of organizations believe that their managers are effective at communicating their reward programs. The most common complaint is that line managers focus on a limited range of reward vehicles and only look at the numbers: ‘if my team has performed well, they should get a pay rise.’ If that pay rise isn’t possible, then the manager feels both hamstrung – they can’t reward performance – and often disenfranchised – the organization doesn’t care about the work that they and their team have done. 
 
So are line managers to blame?
TM: Not necessarily. The other significant factor here is that line managers themselves don’t have an understanding of the reward program and how it works. They need to know the goals of the program, where they have an impact and how to use the full range of reward options they offer. Ideally, they should be involved in designing and communicating the reward model, but if there’s already a structure in place, it’s vital that they communicate the intent of these programs. Many companies are aware of this: we found that only a third of those questioned thought they did a good job of training their line managers to understand their reward strategy.
 
Why are line managers so important?
TM: There are two main reasons. Firstly, employees tend to trust the information they get from line managers in a way they don’t trust the ‘corporate’ voice of HR leaders. 
 
Secondly, they are the main day-to-day deliverers of the reward program. Take variable pay as an example. Line managers are the ones who normally assess the performance of their staff as part of the pay award. They need to understand fully what really constitutes exceptional performance to gain the highest rating and how to deal with poor performance through this variable pay scheme. And that needs to be communicated before performance ratings are given. 
 
Equally, they need to understand the range of other rewards that are available and particularly the importance of simple recognition of good performance. No money need be attached to this: it’s just a question of acknowledge work done well.
 
What can HR to do support line managers better?
TM: Plenty! First of all, educate them about the reward programs and in particular its intent and rationale and the role that they, the managers can and should be playing in implementation. Make it clear what merits reward as well as the types of different rewards available. One practical tool HR can introduce is a ‘personal impact map’ that shows exactly how each employee can help achieve overall business goals. The staff member values it, but it also shows the manager how rewards are designed to help achieve business goals.
 
Alongside that, individual total reward statements show how all the different elements stack up, giving staff a sense of achievement and recognition that they may not otherwise have. Finally, use line managers to communicate changes in policy, so that they become the owners of the reward program. Then they can become its advocates too.
 
To find out how to get a copy of The Manager's Guide to Rewards, a book co-authored by Hay Group’s Doug Jensen, Tom McMullen, and Mel Stark, visit www.haygroup.com for further details.

For Hay Group’s latest report on why organizations are failing to get a significant return on their reward investments and how they can maximize the value of their programs, read our recent whitepaper, ‘Managing reward: why line managers are the vital link.’

Managing in a downturn

Weatherproof your organization

With the media full of stories of ‘credit crunch,’ rising inflation and global economic downturn the number of factors working against organizations only seems to grow.

Leaders face pressing questions such as:

‘how do I keep my talent from walking?’
‘how do I motivate and reward with less?’
‘do I have the right leaders?’
‘do I have the right strategy and if so, how do I execute it effectively?’ 

The good news is that there are clear actions that organizations can take that will see them through the tough times ahead and help them emerge stronger.

With over sixty years working with some of the world’s Most Admired Companies, we know the approaches and practices that work. Looking at duplication and waste and streamlining processes is important at any time but is even more so in a downturn.

But in our experience it is also the organizations that keep their cool and manage talent perceptively that survive and are toughened by the experience. They listen to their employees, engage them and provide clear and consistent direction.

From our Hay Group ‘Global Slowing Economy Survey’ we know the primary concern for many organizations is motivating and retaining key people during this challenging economic period. We work with clients to help them control their costs without damaging the core of their operation – their organizational, relational and human capital.

What’s more, we know that tough times call for a certain type of leader – one who can see the high ground and get their organization to it, fast. We help our clients ensure their leaders have the right set of competencies.

For more information on responding to the challenges of the downturn:
Hay Group's viewpoint on Managing in a downturn 
Can’t afford to reward? 
Responsible rewards: Did bonuses bring down the global financial system? 

Hay Group comments in the press on exec pay
Press release: Hay Group advises companies to take the bull by the horns if they are to survive
Podcast: Reward management advice for weathering the downturn

Building effective organizations 
Employee engagement 
Leadership transformation
Reward strategies 

Crisis leadership: it’s a question of style

Crisis leadership: it’s a question of style    

Don’t underestimate the power of a positive work climate

A tough economic climate can take the wind out of the sails of both your employees and leaders. A vicious circle develops: no matter how much extra effort it exerts, the company continues on a downward trajectory. However there are effective ways to tackle the problem.

During economic downturns, people focus is often on the things they can’t control and stop taking positive action. Effective crisis leadership will create an engaging work climate despite the bad economic news and fear it can generate.

And the power of a positive work climate and the extra effort it encourages should not be underestimated. Research shows that employees working in engaging climates outperform peers in a less robust environment by as much as 30 per cent.

Good leaders call on a full range of leadership styles. And the very best keep focused on what they must achieve, adapting their style where appropriate.

The new US President offers a good example. He used his inaugural address to inspire the nation. He has also consulted with the opposition and made unilateral decisions to overturn prior policies. Here’s some practical advice on what leaders can do.

Keep employees energized

Businesses that win in a downturn provide clear direction in the face of uncertainty, reassuring when necessary, all the while continuing to push for results. These leaders create energizing, engaging work climates by using the full range of leadership styles.

1. Effective leaders create clarity and buy-in while keeping people focused on the work at hand. They do this by being authoritative – creating the vision, providing the context and gaining commitment. They know it’s important not to leave employees in the dark about the company’s strategy and are aware of how an information vacuum is immediately filled by rumor. These leaders make decisions quickly and then communicate them. Rather than concentrating on negatives like cost cutting, redundancies and closures, which leave employees feeling fearful and helpless, they focus people on what they can do to feel empowered and energized and help the company through the downturn.

2. Occasionally during times of real crisis leaders become coercive, directing people to specific actions and warning of the consequences if they are not followed in a timely fashion. When the airliner recently crashed into New York’s Hudson River, for example, the passengers were told to move directly to the exit doors and out onto the rafts or the wings. Such direct leadership can become overbearing or downright boring if overused, but it undoubtedly saved lives that day. It has also rescued more than a few floundering businesses.

3. When required, effective leaders reach out to others for help and expertise, taking a more democratic approach. But they do so only after they have framed the issue and established the parameters. For people to be involved in the decision-making process they must have the necessary clarity. It is difficult to arrive at the best course of action if they don’t know the ultimate objective. Once the playing field and the rules of the game have been authoritatively laid out, a team can develop an innovative approach through active participation. 

4. Good leaders are supportive. In times like these, a little affiliative leadership can also be important. People are scared. They’re worried about their jobs and their ability to pay bills and their self-esteem is often under attack. Sometimes the best leadership involves just bringing in the lunch, listening and understanding. 

5. It’s also important continue to coach and develop people. They may not hold regular, coaching sessions. They may be too busy dealing with the crisis at hand. But in those quiet moments, perhaps at the end of a meeting, over a beer or glass of wine, or in the parking lot at the end of a long day they take a few minutes to listen, to help, to provide a bit of feedback and to impart a bit of wisdom. Such coaching moments can be brief but profound. 

6.Effective downturn leaders become more visible, using elements of the pacesetting style. By putting your shoulder to the wheel and leading by example, you demonstrate that you are there with employees – and for – them. However beware, your role is to lead, not micromanage or disempower employees. If you spend too much time in the weeds dealing with the detail, you will miss critical opportunities and subtle shifts in the bigger strategic picture. Use this style sparingly. 

Don’t rely on one style
Combining these styles fosters a better work climate. It gives employees goals to focus on and room to innovate, while also encouraging them to work collaboratively. This is important because employees that are engaged by the right kind of leadership will go the extra mile.

What leaders have to watch for is overusing any particular style. Be particularly sensitive to the style you use most often. If all you do is talk big picture or hold meetings, you will have a minimal impact. If you’re too empathetic, people start feeling sorry for themselves. If you’re always leading by example, you miss the strategic piece. You have teams to do the work. Let them do it. You’re the leader.

Avoid bad habits
During a downturn it’s easy to fall into bad habits. Perhaps the biggest risk is adopting a command and control approach and become coercive. At its worst, this involves micromanaging employees. We also see frustrated leaders simply take over in an attempt to solve problems rather than seeking the input of others. If you’re always jumping in and doing the work yourself – pacesetting – you miss the strategic piece. Used in isolation both of these styles can adversely affect the overall work climate within an organization and frustrate people’s natural motives.

Communicate, communicate, communicate
Successful leaders avoid these common pitfalls and concentrate on creating positive work climates. Get people looking at what they can do, so that they feel empowered and energized to help the company through the downturn.

They know it’s important not to leave employees in the dark about the company’s strategy. These leaders make decisions quickly and then communicate them effectively to staff so people have an area to focus on moving forward.

For example, rather than simply cutting down on meetings to save travel costs, these leaders look for other, cost effective ways to keep people connected so they are encouraged to collaborate and innovate.

Untapped energy
When leaders use a mixture of styles they create the clarity, flexibility and the responsibility employees need to be effective. The also are able to maintain a focus on high standards and improvement and provide crucial feedback. And, they create much needed team commitment that is often in short supply during tough times.

It is this set of elements that together create an engaging, empowering work climate. In many cases it may be enough to offset the cuts companies have had to make elsewhere, so it’s plain to see that improving leadership styles really can offer extraordinary value to an organization.

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