Simplify or Die: Why Growing Companies Should Take a “Back-to-Basics” Leadership Approach
Dr. Tasha Eurich
“They don’t know what they’re doing!” said my client, squirming indignantly. “Our leaders just don’t have what it takes to lead a company our size.” As the CEO of an organization whose headcount had grown by 1,000% in three years, he had a point.
His managers were running a company whose leadership needs had changed from “let’s roll up our sleeves and get work done” to “uh-oh--we have to get work done through other people?”
Put simply, leadership can fuel growth or thwart it. One study of a Fortune 500 commercial bank found that, on average, poor leadership was associated with $1.2 million of operating losses and excellent leadership was associated with $4.5 million in operating profit.
As the CEO of a growing company, surely you’ve developed a strategic plan, secured capital funding, and set your sales quotas. But are you confident that your leaders can build high-performing teams capable of meeting your targets?
If your answer is a panicked stare, you’re not alone. A series of studies from the Center for Creative Leadership found that half of managers are ineffective. In a growing company, that’s enough to make any CEO quake in her boots!
Bankable Leadership Means Mastering Two Behaviors
Thankfully, 70% of leadership is learnable, and almost anyone can become a more effective leader. Often the biggest obstacle is too many options and too few results. A McKinsey study of CEOs found that 76% believe it’s important to develop their leaders, but only 7% reported doing it successfully.
Many well-intentioned organizations are guilty of overcomplicating leadership development. They might send leaders to countless (but unrelated) training courses or assign reading from the nearly 100,000 leadership books available on Amazon. Leaders begin to view leadership as hopelessly complicated.
Have you ever lost your TV remote and searched every inch of your house, only to find it under the couch cushion? Companies who want to quickly grow their leaders can benefit from a “back to basics” approach, starting with the earliest research on the topic.
At the core, effective leaders do two things: they prioritize people and drive business results. We’ve known this since 1945, when Ohio State University researchers studied the behaviors of 70 International Harvester foremen. Their results were clear: effective leaders showed consideration (treating employees like human beings) and initiated structure (aggressively pushing performance). The researchers also found these behaviors to be independent: leaders could be high in one, both, or neither.
These two behaviors--let’s re-name them People and Results—have an inherent tension between them and often feel like a trade-off: I can make my people happy OR I can drive them to perform.
If we think about these tensions falling on a continuum, leaders are usually more drawn to one end than the other. They fall somewhere between the “Cool Parent” (who places morale above all) to the “Trail of Dead Bodies Creator” (who achieves results at all costs).
Few leaders can do both well, but this is precisely what makes leaders “bankable.” Bankable Leaders delivers guaranteed prosperity to their company in the form of achievement, happiness, health and wealth. Who doesn’t want that?
Three Actions to Make Your Leaders Bankable
- Start with you: The behaviors of senior leaders powerfully shape a company’s culture. So whether you’re more of a “Cool Parent” or “Trail of Dead Bodies” leader, your style has most likely trickled down the organization. Find advisors inside or outside your organization who will tell you the truth. Identify where you fall—and what you might be neglecting.
- Adopt a common framework: Few companies adopt shared models for thinking about leadership effectiveness. The result? Every leader has a different perspective on what’s required for success. There is great power in choosing a common framework to guide your leaders’ development—it will simplify things and increase the impact of your efforts.
- Understand before you treat: Physicians rarely write prescriptions until they understand your illness. When companies arbitrarily offer “communication” training, for example, this prescription may not be treating the right issue. So do your homework and find out what skills your leaders are really missing. People? Results? Both? Once you find out, remember that a mix of “available to everyone” and “customized to the person” offerings will give you the best ROI (for example, training classes and an on-the-job development project to learn a certain skill). And above all, keep things as simple as possible!
About the Author
A proud leadership geek, executive coach, speaker, and author, Dr. Eurich is the author of Bankable Leadership: Happy People, Bottom-Line Results and the Power to Deliver Both. She also helps organizations succeed by improving the effectiveness of their leaders and teams. With a strong passion, Dr. Eurich pairs her scientific grounding in human behavior with a practical approach to solving leadership challenges. The majority of Dr. Eurich’s work has been with executives in large Fortune 500 organizations.
With an M.S. and Ph.D. in Industrial-Organizational Psychology from Colorado State University and B.A.s in Theater and Psychology from Middlebury College, she serves on the faculty at the Center for Creative Leadership. She has served as an adjunct faculty member in Colorado State University’s Psychology and Business Schools.