Senior executives have never been so well rewarded. In the UK it now takes the average CEO only three days to “earn” what the average employee takes home in a year. On top of this, lottery-sized exit packages and gold-plated pensions give those at the top unprecedented material security.
And yet… Not everything feels secure
According to The Economist, the average life expectancy of public companies shrank from 65 years in the 1920s, to less than ten in the 1990s. Public scrutiny is increasing and innovation is a source of both creativity and disruption. Whilst a golden parachute might break the fall, life in the C-suite is becoming ever more precarious. In just ten years the average CEO tenure has fallen from 8.1 to 6.3 years and is getting shorter all the time.
In an uncertain climate, good leadership matters more than ever
McKinsey has published numerous papers linking organisational health with profitability, innovation and shareholder return. So every year the spend on leadership and management development training and change and culture consultancy increases.
And yet… Lack of good leadership is costly
Dissatisfaction with the results of all this training and development is on the rise. Employee engagement numbers remain stubbornly low and, depending on the survey you read, between 50 and 60% of staff would fire their managers if they could. According to Deloitte Shift Index American companies are 75% LESS productive than in 1965.
What should leadership achieve?
Erik de Haan in his book The Leadership Shadow summarises decades of research:
“Leadership is the function devoted to harnessing the organisation’s effectiveness”
This speaks to the fact that everyone in an organisation has a leadership role in order to harness that effectiveness.
However, many studies point to the crucial role of senior management teams:
“The prize for building effective top teams is clear: they develop better strategies, perform more consistently, and increase the confidence of stakeholders. They get positive results and make the work itself a more positive experience both for the team’s members and for the people they lead” – McKinsey, “Teamwork at the Top”
McKinsey surveyed 189,000 people in 81 companies across geographies and industries. When it came to sustainable profits and engaged employees, four kinds of behaviour account for 89 percent of leadership effectiveness:
- Being supportive
- Solving problems effectively
- Operating with a strong results orientation
- Seeking different perspectives
This survey – and others – points to the key role upwards feedback plays in this process.
The real cost of leadership failure (or leadership fear)
A 2013 survey of over 3000 people revealed :
“almost a quarter (22%) of workers left their job due to a lack of faith in leadership, 19% felt unappreciated, 19% felt disengaged & unmotivated and 13% cited lack of financial rewards as their reason for leaving…. Employees still rate having good management and a rewarding workload as the most important things in their daily working lives, with 41% leaving their job as a result of having a lack of faith in bosses or feeling unappreciated by them.”
So where did all the good leaders go?
Top teams are usually full of knowledgeable, experienced, ambitious (and yes, well-rewarded) people, what’s getting in the way?
Profitability is closely linked to how well senior management teams work together. Working well together means having open and often challenging conversations; a lack of silo thinking when it comes to strategy and the ability to take responsibility for modelling and executing change. At a nitty-gritty level this means a lack of hidden agendas in meetings, emails and phone calls.
The obstacle is not “out there” stuff like strategy or vision
Research (and my own hard-won experience) shows that it’s not lack of strategic awareness, but the people themselves that inhibit great performance.
Interviews with hundreds of senior executives have shown – perhaps surprisingly – it all comes down to fear.
The top five leadership fears
The executives themselves easily identify the consequences which include poor decision making, a focus on survival instead of growth, failing to act unless there is a crisis and encouraging bad behaviour at the next level down.
The good news is that while fear is an inevitable part of being human there are some simple steps that can break the cycle and reinvigorate the organisation.
Fearful leaders don’t need training or an expensive MBA, they need quality time to think
The most important step is allowing the senior team time to think and time to talk to each other. Really, properly talk to each other.
The people in our lives who we trust the most, have usually seen us as at our best and at our worst and they care about us anyway. Trust requires openness and vulnerability. I know that committing to four high quality team coaching gatherings in a financial year, alongside individual coaching, will radically change the quality of conversations leaders have with each other and will then transform the quality of the decisions being made. Everything starts with getting away from it all and sitting down to talk.
Getting to leadership requires courage
This first step is not easy, which is why teams look to outside help. But just try Googling “Executive Leadership Development”. Up will come a set of results from leading business schools, some of which will include essential one-to-one coaching. But most of the curriculum is still about best-practice, strategy and skill sets.
Very little of it addresses the tricky topic of fear.
So isn’t it time for some fresh thinking on leadership development?
Shouldn’t programs focus on the executives themselves, identifying and then working through the distractions? Shouldn’t programs take leaders and teams away from it all, give them time to think and allow them to come up with the fresh ideas and let them start making their own brave decisions?
This is why the work I do focuses on individual and team coaching – helping leaders work through their fears on their own and working to repair or strengthen the relationships they have with their peers and their teams.
Employees have the right to be well led
The presence of high quality two-way feedback is the sign of an organisation that is listening and learning. We have a way of measuring that. It doesn’t involve carrots or sticks or nine box grids. But it does require courage from those in the C-suite.
“I would highly recommend journal writing. I joined one of Moyra’s journal safari sessions a couple of weeks ago and have been keeping a daily journal ever since. The main benefits for me is it’s helped me to keep perspective in these times, not to be too hard on myself and be thankful for the things I have achieved.“