Developing leaders as your company grows

Over the course of our lives many of us will encounter people that we consider natural-born leaders; people who behave in a way that makes others want to succeed. If we’re lucky enough to employ one of these people in our company, we will have hit the employee jackpot.

Leaders consistently do things that others don’t — they lead by example. Their ability to bring out the best in people around them can seem effortless, but it is work. Leaders are knowledgeable, curious, and empathetic, but also serious and committed to what they believe in, and that includes the people they work with.

The great thing about employing leaders is that their ability to inspire others to do their best increases engagement. When working with leaders, engaged employees often don’t know that they’re giving more than their usual until they find themselves doing things to better their own game. Call it competition or a desire to impress—whatever it is, it works.

When you think about it, it’s is a pretty great way to get more out of people. It sure beats demanding and berating in an attempt to get increased performance which, when it backfires, could result in losing a good employee at great expense to the company.

HR executive, Josh Bersin of Deloitte believes driving employee engagement and retention is critical for companies. The cost of losing and replacing an employee can “range from tens of thousands of dollars to 1.5 to 2x their annual salary.” That’s a significant expense for employees at the highest levels of a company.

Bersin’s estimate factors in the costs and time associated with:

  • recruiting and hiring
  • onboarding
  • training
  • productivity losses
  • decreased employee engagement of those who remain

As well, companies with high employee turnover can be viewed negatively by potential new recruits, limiting the field of quality candidates. When you consider all that, it’s easy to see why employee engagement matters to companies.

In a broad sense, we consider a leader the ultimate engaged employee. As consulting giant, PWC discovered engaged employees tend to go to greater lengths to help organizations reach their objectives. Companies with employees who considered themselves “very engaged” at work enjoyed 147% higher earnings per share than other companies. So it’s no wonder then that forward-thinking companies actively seek out ways to encourage and develop individuals they believe will make great leaders.

Leadership Characteristics

A simple Google search will turn up many different opinions on the traits of a good leader — from the personal to the more existential, as Barry Posner and Jim Kouzes, co-authors of the best-selling book The Leadership Challenge found. In their extensive research for their book, they discovered that 72% of employees want “visionary leaders” who can answer these three key business questions:

  • Where are we going?
  • Why do we exist?
  • What principles guide our decisions and actions?

As these questions illustrate, visionary leaders look at the big picture. They are responsible for shaping the future of a company and look for ways to develop individuals, technology, and culture to help their companies achieve their goals. Critical elements for long-term employee and company development, to be sure.

From a more personal and perhaps more immediately attainable standpoint, author John Blakely believes in a new breed of executive leader; one who is capable of providing what he calls “transformational trust-building skills.” The three associated pillars are: ability, integrity, and benevolence, all of which inspire confidence and trust in the people who work with them.

Similarly, Deloitte consulting believes that “inclusive leaders” have six signature traits, basically offshoots from Blakely’s pillars:

On the whole, it is generally agreed that in terms of personality, good leaders:

  • Are open, honest and available. Leaders believe in transparency and are accountable for their actions.
  • Are capable. Leaders have been-there and done-that. The advice they give is based on personal experience, not guess-work.
  • Guide instead of micro-manage. They give suggestions but let others find solutions and carry out tasks themselves.
  • Are consistent. People usually know the answer they’re going to get from a leader before they ask it.
  • Are kind. Leaders encourage. They don’t berate, intimidate, or talk behind others’ backs.
  • Are humble. Their success is always as a result of their team’s efforts.
  • Praise good work. Leaders give kudos genuinely and freely when good work is done.

And perhaps most importantly,

  • Provide constructive feedback. Leaders gently correct their team member’s bad behavior and errors, and openly encourage personal and professional development

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The Difference Between Leaders and Managers

While it is possible to have a great leader who also happens to be a manager, but it’s important to distinguish that not all managers are leaders.

Traditionally, managers were viewed as task-based people who had a goal to achieve (like a project) or a department to run and a team of people to help carry out the job. Success came when all necessary tasks were completed, hopefully on time and on budget, with little consideration given for how they got there.

Just how do they do that, you ask? Typically, managers tend to be delegators. Though delegation isn’t a bad thing—it’s necessary to move things through the pipeline—it’s how people delegate that determines whether they are a manager or a leader.

Author and motivational speaker, Simon Sinek believes that when we tell people what to do, we end up with workers. It’s when we trust people to get the job done that we create leaders.

But can a company manage with just a bunch of leaders?

Consulting giant, PWC thinks that in order to be balanced, companies need both managers and leaders. They see employee engagement as being directly influenced and directed by a combination of “leadership vision and manager effectiveness.” Leaders, they say, are responsible for setting the tone and direction a company will take, which directly influences culture and prioritizes actions. Managers tend to influence and shape day-to-day experiences; how people are recognized, how they collaborate and communicate with one another, and ultimately how they develop.

Bringing Leadership Home

Forty-two percent of companies think “leadership development” is very important and were actively interested in increasing their efforts in the area. However, when it came to trying to implement a program, many of them struggled with not knowing where to begin.

Sophisticated companies have long recognized that leadership development involves more than just training people. But when you consider the different types of leaders that we discussed earlier, and the wants and needs of a changing workforce demographic, how is a company to know which type of leadership model is best for them?

It may help to recognize that Millennials now make up the largest segment of today’s four-generation workforce, and 44% are already in leadership roles. As valued employees of their companies, they expect to experience leadership training opportunities, such as mentoring and stretch assignments as part of their ongoing professional development. Somewhere there is a disconnect however, because Millennials also feel that their companies offer little or no support in this area. It could be because at many companies today the leadership pipeline remains too top-heavy, preventing Millennials from getting the on-the-job learning and development they need.

Interestingly, Deloitte’s 2017 Human Capital Trends report found that the imperative transition from traditional business model to a digital organization has resulted in a shortage of knowledgeable, agile leaders capable of understanding the intricacies of company operations and how they will impact the company’s vision.

The paradox, as Deloitte points out, is that “high-performing leaders today need a different set of skills and expertise than in generations past, yet most organizations have not moved rapidly enough to develop digital leaders, promote young leaders, and develop new leadership models.”

One such visionary has tried to change that. 132-year old telecom giant AT&T recognized that their industry has changed dramatically over the decades since they started. Their workforce needed to stay at the forefront of development in order to retain employees and clients and remain competitive.

“We felt a fundamental obligation to reskill our workforce,” says John Donovan, Chief Strategy Officer. His group was responsible for organizing the various courses where AT&T’s more than 100,000 employees—whose jobs were likely going to be obsolete in a decade—learn a host of new job-related skills. Their flagship talent and development vehicle, AT&T University “helps us accelerate growth, foster innovation, and develop leadership capabilities at every management level.” It also helps the company avoid implementing massive layoffs. 40% of its workforce has been promoted from within the company. This immense undertaking has worked well for them. This year, for the first time in their history, they made Fortune’s 100 Best Companies to Work For list.

AT&T is a great example of how investing in employee futures can in turn be an investment in themselves and result in increased employee engagement and retention. To create a dedicated team, consider growing leaders from within by looking for individuals who already have many of the qualities that your company needs. Remember, leaders exist in many forms, and most certainly their skills can be taught, if companies want to take the time to nurture, teach, and invest in their people.

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