Day: August 31, 2017
What Exactly is Leadership … Part 3
Committed To and Valued More Than Used and Consumed
This week, we will focus on why it is important that leaders display commitment to and value for others. Most people want to be valued for who they are and not just what they do. This doesn’t suggest that doing and performing never matter, clearly they do. But relationships with any sense of long-term commitment require more than doing and performing.
In covenant relationships, leaders value people regardless of their level of talent or performance. They hold people accountable, but they do so in a manner that demonstrates respect for individuals.
A Proper Perspective on Talent and Performance
For example, talent and performance are central to athletics. Yet, the best coaches understand other important aspects of the player/coach relationship. In fact, treating players with respect and consideration sometimes produces performances that make up for a lack of talent. When I played basketball in college, my coach went out of his way to help me in my personal life. No doubt, I worked harder for him than for any other coach, and I performed well beyond expectations because I knew he cared. In fact, that was the case with our entire team, and we lost only two games all season.
Conversely, commodification breeds mistrust and short-term commitment. It cannot engage the full person, because it doesn’t meet an individual’s deeper needs such as recognition and respect. When followers know that a leader’s primary commitment is based solely on their performance, then the relationship is not likely to survive long-term. They know that as soon as someone fails to perform up to expectations, the relationship loses value and can be terminated.
That said people simply aren’t products to be used and then terminated when performance slips. Individuals want leaders who are committed to them beyond their immediate performance; just like my coach demonstrated his commitment to me.
Trust Tends to Heighten Performance
This doesn’t suggest that covenants lack performance or accountability. Though power wielders might fear this result, research and anecdotal evidence demonstrate the opposite occurs. In our nonprofit and church leadership consulting, we remind clients that when people (staff or volunteers) are treated well and trusted, they tend to heighten performance and assume more rather than less accountability. Conversely, when leaders focus primarily on performance, it breeds competition over teamwork and defensiveness over accountability.
An Example from GE
Consider General Electric under the leadership of Jack Welch. One of the most successful companies in the world, revenues went from $26.8 billion to $130 billion during his tenure. By 2004 GE’s value was $400 billion, the largest in the world. Nevertheless, profits came with a price. The culture and strategic planning had always emphasized cost cutting and high performance. However, when Mr. Welch cut 118,000 jobs, he earned the name of “Neutron Jack”. Equally disconcerting, Fortune Magazine put him at the top of its list of America’s “Ten Toughest Bosses.” He also spent $75 million on fitness equipment and major upgrades. To his credit, Mr. Welch explained, “People weren’t buying it. The money I was investing was pocket change, (but) the symbolism of $75 million was too much in the face of layoffs.”
Lessons Learned
He freely admits that sometimes he was full of himself. As evidence he cites the acquisition of Kidder, Peabody, despite opposition by his board. Less than a year later federal officers arrested several company officials for insider trading. Mr. Welch commented, “There’s a razor’s edge between self confidence and hubris. This time, hubris won and taught me a lesson I’ll never forget.” Maybe that explains why GE performed at 2.8 times the market from 1985 to 2000, while Good to Great companies simultaneously performed at almost seven times the market. This is even more interesting considering that all “Good to Great” companies had as Mr. Collins described, CEOs who possess a paradoxical blend of personal humility and professional will.
More to Leadership than the Bottom Line
No doubt, issues are never black and white at GE or anywhere else. Yet, the fundamental principle is still true. People cannot be commodified without compromising their commitment and their performance. While profit and performance are crucial to long-term success, sustaining them long-term requires leaders who realize that there is more to leadership than bottom line results.
