Is Leadership the Main Cause of Mediocre Companies?

Only three things happen naturally in organizations: friction, confusion, and underperformance. Everything else requires leadership.

—Peter Drucker

In working with numerous companies over the past 30 plus years, I’ve seen a lot of reasons that they failed to perform at the level they were expected to. The truth is many of the reasons were symptoms, with the root cause being directly related to leadership.

What is effective leadership? There are as many answers to this question as there are excuses for failure. If I look back at my working life and think of great leaders, what comes to mind first is that I’ve known so few. I’ve met hundreds of managers, but just a few great leaders. As is often said, “Assets are to be managed; people are to be led.”

Warren Bennis is quoted as saying, “Leadership is the capacity to translate vision into reality.” Neither vision nor leadership can be successful without the other.

I think one of the main failures I’ve seen in leaders is their inability to keep the workforce engaged in the work they’re doing. Employee engagement in the United States is said to be lower than 20 percent. That’s correct; according to a Gallup poll, 84 percent of employees are not engaged in their work. The same study stated that employers with highly engaged workforces outperform their peers by 147 percent in earnings per share. Another study by Dale Carnegie and MSW Research gave additional facts:

  • Eleven billion dollars is lost annually due to employee turnover
  • Companies with engaged employees outperform their competitors by 202 percent
  • Forty-five percent of employees are not engaged at all
  • Twenty-six percent are actively disengaged
  • Twenty-nine percent are engaged

What is the root cause of the lack of engagement? It’s directly related to lack of effective leadership.

Of course, none of us are poor leaders. At least I’ve never heard anyone admit to being an ineffective leader. The problem I hear most often is that “they don’t get it” or “they aren’t committed.” Both of these, of course, are leadership issues.

The employee-engagement statistics shouldn’t be surprising. If those employers don’t have a clear idea of where they are going and the belief that they can get there, they resort to a week-to-week strategy or in worse cases a day-to-day strategy. You must clearly define and document what it is that they don’t get.

  • If employees are given confusing directions, of course they’ll perform poorly.
  • If they’re presented with expectations that are undocumented and constantly changing, of course they’ll get frustrated.
  • If they don’t have well-defined goals, of course they’ll lack motivation.
  • If they’re not held accountable to agreed-upon metrics, of course they’ll tend to slack off.
  • If they’re not respected and treated equally as members of teams, of course they’ll become disengaged.

The good news is that leaders are made not born. You can learn to be an effective leader, but it starts with confidence and belief in yourself.

How do you start?

  • Do you regularly take the time to really listen?
  • Are you available and approachable?
  • Do you and your employees have a sense that “we’re all in this together”?
  • Are you in a habit of praising others for their accomplishments?
  • Do you celebrate your successes as a team?
  • Do you actively promote a team spirit throughout your organization?
  • Are you visible? Do your employees see you on the plant floor or in the warehouse?

A great leader has a vision, communicates that vision relentlessly, builds a great team to achieve that vision, and removes any obstacles that might impede that team.

General Colin Powell summed it up well in the following statement: 

The day soldiers stop bringing you their problems is the day you have stopped leading them. They have either lost confidence that you can help them or concluded that you do not care. Either case is a failure of leadership.

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