With a recent World Economic Forum report revealing a crisis of confidence in leaders on a global scale, Petris Lapis queries how well organisations are doing from a leadership perspective.
I recently attended resilience training for government employees. Participants were in groups gloomily discussing coping with change. Only one group in the room was upbeat. When asked why they were coping with change so well, they reported that when their department had been reshuffled, the appointment of a manager had been overlooked. They were taking it in turns and had never worked as a more efficient or harmonious team. The secret to their success… no manager.
The current state of leadership
Are we doing well from a leadership perspective? The most recent global leadership index report produced by the World Economic Forum reveals a crisis of confidence in leaders on a global scale. Trust and confidence in leadership is ranked on a scale from one to 10 with 10 being total trust and confidence. From the most to the least trusted sector, this is how leadership ranked:
International organisations: 4.62
Religious organisations: 3.57
In Australia, the confidence we have in our leaders rates a measly 4.11 out of 10, and the younger you are, the less confidence you have in them.
Research by the Adelante group shows that 30 to 40% of CEOs fail in their first three years and it can take an organisation 10 years to recover from poor leadership. Globally, dismissals for ethical lapses rose from 3.9% of all successions in 2007 to 2011 to 5.3% in 2012 to 2016. According to the 2017 Edelman Trust Barometer, only 37% (an all-time low) of people consider CEOs credible today.
Theo Veldsman studies the growth and impact of toxic leadership in organisations across the world and says that although traditional research shows that one out of every five leaders is toxic, he believes it is now closer to three out of every 10.
It appears our leaders are failing not because they are incompetent, or lacking in knowledge or experience, but because of hubris, ego and lack of emotional intelligence.
This is confirmed by a LinkedIn survey of human resources managers in Australia that found most Australian managers are lacking in the critical leadership skills of empathy, problem solving and creativity, and the ability to foster collaboration and innovation.
What impact does poor leadership have?
Poor leadership is like putting your sewage discharge into your drinking water. Before you know it, everything is toxic.
Swedish researchers have found that poor leadership adversely affects not only workers’ mental health, but also their physical health. They found that if your manager was incompetent, inconsiderate, secretive or uncommunicative, you were 60% more likely to suffer a heart attack or other life-threatening cardiac condition. If you worked for a ‘good leader’, you were 40% less likely to suffer a heart problem.
According to Ray Williams, poor leaders create ‘toxic workplaces’ where the focus is on wrongdoings, rather than praise, where profits are more important than people, where stress, turnover and burnout are commonplace and where internal competition to keep your position is rife.
Such workplaces also experience a decline in civility and a rise in bullying. As a result, researchers have found that employee engagement has declined significantly in most industries, with some finding as few as 29% of employees are now actively engaged in their jobs.
What a better leader looks like
Being a better leader requires several traits and they might not be what you think:
Christine Boedker of the Australian School of Business researched the link between leadership and organisational performance, and found that of all the elements in a business, the ability of a leader to be compassionate had the greatest correlation with profitability and productivity. William Baker and Michael O’Malley also found that a management style which had the traits of compassion, integrity, gratitude, authenticity, humility and humour improved employee performance and retention.
Bradley Owens found that not only are humble leaders more effective and better liked, but they also have more learning-oriented teams, more engaged employees and lower voluntary turnover. Interestingly, findings from a Baylor University study found the honesty-humility personality trait was the unique predictor of job performance.
Amy Ou and her colleagues at Arizona State University studied the CEOs of 63 private Chinese companies and the managers who worked with them. They found that the humbler the CEO, the more managers working for them reported positive outcomes. This is confirmed by Elizabeth Salib, who also found that the best leaders are humble leaders. She cites Google’s Senior Vice President, Lazlo Bock, who says humility is one of the traits he looks for when he is hiring staff.
Leadership expert Jim Collins in an article in the Harvard Business Review argues that the best leaders have ‘character’ (modesty, quiet calm, determination, channelled energy, a focus on the business not themselves, accepting responsibility for poor results and giving praise for good outcomes to others). Good character results in a leader not only being liked but also making greater returns for their organisations.
After studying 84 CEOs and more than 8,000 of their employees, Fred Kiel found that people were happier and worked harder when they felt valued and respected. CEOs who had the four character traits of integrity, compassion, forgiveness and accountability led companies whose returns on assets were five times larger than those of executives who were more self-centred.
Is it because we have fallen victim to the ‘sales pitch’ and hype of the charismatic superhero who promises the world and fails to deliver?
How can we get better leaders?
If we want better leaders, we need to help with:
Better leadership training
If the Australian LinkedIn survey is to be believed, our managers desperately need the type of emotional intelligence training more commonly found in counselling rather than traditional leadership training.
Change the way we select and reward employees
Jeffrey Pfeffer’s research shows that, “the qualities we actually select for and reward in most workplaces are precisely the ones that are unlikely to produce leaders who are good for employees, or for that matter, long-term organisational performance”.
Stop falling for the hype from charismatic superheroes
Start endorsing the quiet, humble and honest behaviour which makes for a better business and world. It is time to stop choosing authoritarian, controlling, narcissistic and toxic leaders. It is time we started making the choices that were good for our businesses and our employees.
Change our focus
We suffer from the misconception that ‘tough managers’ are successful. Emma Seppala’s research shows that tough managers mistakenly think that putting pressure on employees improves performance when, in fact, all it does is increase stress and its associated side effects. Anthony Mitchell, co-founder and chairman of strategic leadership firm Bendelta confirms this when he says, “With the death of the command-and-control age, leaders cannot expect superior performance through the militaristic exercise of authority. The winners in today’s business world are fully engaging and inspiring their people, while the losers are not. It’s that simple.”
Petris is the Director of Petris Lapis, which offers critical soft skills and mindfulness training. Visit petrislapis.com