Top Three Organizational Leadership Pitfalls and How to Turn Them Around
Organizational leadership has many layers and complexities. It can be challenging to figure out where focus should be between the many responsibilities each day brings. It seems that many times managers spend so much time dealing with crisis or putting out fires that the core responsibilities of the job get neglected. Behaviors get influenced by either a generative or a reactive structure within the business. The underlying structure of any enterprise is what makes it either functional or dysfunctional, profitable or unprofitable. Generative means to generate a desired result in every area of the business. There are fundamentally three organizational pitfalls that a business must overcome in order to truly maximize performance, increase revenue and improve profitability.
- Leadership making decisions based on ego, not balanced analysis and principles
- Failure to understand the difference between organizational behavior and structure
- Lack of vision and inability to understand the balance between short-term and long-term
Pitfall Number One…
When leaders within an organization make decisions based on what their ego dictates should be done, instead of a balanced assessment, the negative results filter all the way down to the frontline. Championing a personal agenda within the organization in any area, whether it be sales, operations, finance or marketing, without a well thought out plan of action will destroy the ability of a manager to lead. While the “position power” of the manager (the power given to them by the organization) will not necessarily be affected, their “personal power” will be compromised.
Personal power is the level of respect, trust and credibility that is earned from members of the team through demonstrating sincerity and commitment. So when personal power is low, that makes it next to impossible to gain commitment from the team. Sure they’ll be compliant and do what they’re told because they don’t want to lose their jobs. The question is, “Are people coming to work with purpose?” That cannot happen when a leader makes decisions based on ego alone.
When a leader throws caution to the wind and makes decisions that only please their individual wants and needs, it causes “organizational blindness” – an inability to see what is really going on around them or to hear what others are saying to them. Making decisions based on ego alone creates imbalance within the organization and the individual. It creates the kinds of situations where incessant “surprises” or “crisis” occur seemingly out of nowhere. Then the manager has to constantly react and put out fires instead of really focusing on their core functions as a manager and leader of the organization.
It causes confusion all the way down to the frontline because, in many cases, the core values of the organization are being violated and frontline employees then feel a lack of direction and purpose. This affects both top line revenue and bottom line profit because if a manager, especially an executive manager, can only focus on themselves, they will never see what is actually happening within their own organization. This tends to happen when there are no checks and balances for managers in the business.
The dogmatic approach of, “It’s my way or the highway”, tends to pervade all decision making processes until it becomes too late to change paths without significant collateral damage i.e. having to lay people off, being forced to cut salaries or benefits, cutting out employee social functions, losing key accounts, straining customer relations, creating silos in the company between the various divisions, fostering a “guarding my territory” mentality among employees etc. In short, leading through one’s ego alone is a recipe for both short-term crisis and long-term failure.
For example, many years ago I worked for a consulting firm based on the west coast of the US. It was, at the time, a solid and innovative idea to blend online training with classroom instruction. That in and of itself was not so progressive but there was a unique aspect of the online training. Each training module would be presented online in animated stories that allowed the learner to interact through quizzes and games on the screen.
The animation was extremely professional and well done and the content was outstanding. The company had spent large amounts of money enlisting the help and guidance of the best content experts in the world. They put together licensing deals that allowed the greatest minds in leadership, organizational development, stress management, time management, creating high performance employees, human resources and more to contribute to the creation of the curriculum.
All of the pieces were in place with more than $25 million of venture capital coming in from Asia. The charismatic and brilliant CEO assembled a team of executives and sales professionals around the country that resembled a “dream team” of industry superstars. Well, within six months it became apparent that it was the live training done by the onsite facilitators/consultants that was making money for the company. Clients were buying the packages with the live delivery and were ignoring the online training offerings. The CEO had orchestrated the development of several Hollywood quality online animated training productions. They were, at the end of the day, too edgy and too entertainment based to fit conservative corporate cultures.
He was told repeatedly by investors to stop the more than $400,000 a month cash burn on the production of these training modules. He chose to make leadership decisions based on his ego alone since he had championed the idea of online training blended with entertainment. Thus, he ignored the urgings of both investors and his executive team and continued the enormously unprofitable online training venture. It pulled much needed resources from the national team of professional sales people and consultants and, ultimately, investors closed the doors on the enterprise. This caused more than 200 people to lose their jobs overnight.
Had he chosen to be pragmatic and actually weigh his decisions appropriately and take into account the professional opinions of investors and his own executive team, that company might have made it. This is a cautionary tale that too often gets repeated within organizations where a leader’s ego hijacks his ability to generate desired results in every area of the business.
- As a manager at any level in your company, make sure you work to have a balance between the tendency to solve problems analytically and your use of the emotional side of decision making or “intuitiveness”. What that means is that, when you are looking at making a decision, it is important to analyze all the pertinent data related to making that decision. It is also important to analyze all the potential negative consequences of each decision.
- Once all of that analysis has been done, then managers have to use their background, experience and that so called “gut” feeling to make the decision that best suits the needs of the organization – NOT just their personal agenda. Understand though that both “problem solving” and “intuitiveness” are equally important in the decision making process.
- If you focus only on the data and the razor sharp analysis but totally lose sight of the emotional side of decision making, you can either get paralysis by analysis and/or be overly cautious. If you only focus on being intuitive without the data analysis, you will become non-logical or impulsive. THAT is the definition of making all decisions based on ego by itself. The key is balance and your company will benefit by being able to optimize resources and maximize results.
- Be principle based and make sure to focus on what is best for the organization. What we focus on expands. When managers only focus on what they want, that is when the organization becomes reactive. It, subsequently, creates what is called a “cycle of negative results”. It creates a situation where you tend to only focus on what gets your attention at that point. The irony is that when you focus on only those reactionary “attention getters” or anything you don’t want to happen, you end up getting more of what you don’t want. In essence, whatever you avoid or resist persists.
- So, make sure you as a manager only focus on what is best for the organization. Dictate your actions by the principle of discipline and NOT just emotion. Discipline is the principle that is the foundation for both individual and organizational success. Focus on what the organization needs and do not allow the intensity of emotion to feed your need for ego satisfaction. The ego will be quenched with business results, not with crisis and fires that are caused by emotional, spur of the moment and/or reactionary decisions. Discipline and balanced decision making create a “cycle of positive results” in every area for your company.
Pitfall Number Two…
Failure to understand the difference between organizational behavior and structure creates a situation where companies are always frantic and living in what we call the “Panic Zone”. Structure is what causes behavior. The underlying structure of the business is how the organization is made, including all systems, processes, standard operating procedures and both explicit and implicit rules of working with internal and external customers.
Structure is the blueprint for how the entire enterprise is designed and it actually causes behavior. It delineates how all of the parts relate to each other.
Behavior is caused by how the structure itself either works or does not work. Structure that has not been well thought out, mapped and engineered creates a reactive environment. According to systems dynamics expert and author Bill Schwarz, there are five levels of how to look at your organization. Only when you as a manager get to higher levels can you actually start seeing the causes of the reactionary behavior in your business. Remember that organizational blindness exists when you can’t see what is really going on around you. In other words you will see only what is on the surface, only what other people can see without looking deeper. No manager can truly understand the behavior of their team without really being to see the root cause of those behaviors over time. The five levels of organizational “sight” are…
● See what others see that causes a reactive state to exist; recurring events,
problems, quick fixes, long-term consequences
- See pattern trends that are increasing and decreasing over time – recognize there are no problems or events
- See underlying structure (causality) made up of the control and the core competencies required to create desirable patterns in future feedback loops
- See leverage points; align the organization around them
- See yourself as the designer of the organization
- As a manager if you only see what everyone else sees, this leads to a behavioral pattern of putting a band-aid on a gaping wound and hoping it will get better. Those annoying crisis continue to happen and you see how detrimental they are but can only offer a quick fix until the next time. It’s like the creaky wheel that gets the grease without actually fixing the fact that it was put on wrong from the beginning.
Once you can actually see and start to chart patterns and trends that increase and decrease over time, then you start to realize there are no problems or unexpected “events”. Things happen according to the laws of the underlying structure within your business. In essence, this is the law of nature itself. Your business acts and reacts exactly the way it is supposed to based on the underlying structure with which it operates. So in truth, even if you are not getting the results you want from your business, it is still working perfectly – just under the structure you have designed for it.
Those same crisis and events will continue to happen the very same way until change is made to the structure of the business itself. Until the structure is changed, just like the water flowing over the rocks the same way, the same “surprises” will continue to occur in the business. Only if you move the rocks or change their height or width will the water flow over them differently. It works the same way in your business. Only by rearranging the “lay of the land” within your business can you get different or more positive results on a regular basis.
When you get to the point where you can actually see the causality of why things happen and how you can change it, this is quite an epiphany to achieve explosive growth for your business. This when you can see what is happening through “feedback loops” for each area of your business. For example, let’s say that a company decides to provide a great incentive for their salespeople and their prospective clients to increase sales. Well, at face value this is a good idea. Yet, without first looking at the underlying structure of the business and the capacity of their delivery model, as well as the competencies it will take to significantly increase sales, challenges occur. All of a sudden these strange “surprises” and stressful crisis start happening in the business. This is because sales does explode but the engineering design and production departments cannot keep up with the demand. The elements of the feedback loop look something like this…
More clients per salesperson and more complexity of orders feed into → Sales → Orders → Engineering Design
Backlog → Production Delays → Negative Customer Perception→ Efforts to Keep Clients → Orders → Then Production → Delivery → Revenue
So clearly the good intention of raising sales had the unintended consequence of nearly ruining the business because the company lacked enough resources to service the orders. Careful examination of the underlying structure of the business itself before making the decision to hammer in sales would have allowed the business to grow without strain. Instead, the company experienced a flood of stressful “events” and “fires” associated with trying to fill large amounts of complex orders that they were not prepared to produce or deliver in the first place.
A leverage point allows your company to put the right amount of attention in the right place for the right amount of time in order to change the direction of the patterns that you should map out for your business. So where should the hypothetical business in our example place their attention to reverse many of the patterns of reactive behavior? Looking at core competencies, it would be to develop the ability and capacity to deliver more products at a higher level of customization than before. So instead of diverting so much attention and resources to more and more external sales efforts, the focus needs to shift to internal development. This is the leverage point.
Now you can really see yourself as the engineer of the business, as opposed to a passenger on the train. You understand what to do and how to do it as you move towards creating a totally generative structure for your company in every area. So remember that structure defines behavior. You can sponsor all the training programs you would like to improve behavior but if the underlying structure of your business is broken, that is a moot point.
Pitfall Number Three…
Lack of vision and inability to understand the balance between short-term and long-term focus inhibits execution now and makes the desired future state seem unattainable (even if you do already have a well-defined vision). One of the challenges with management, particularly in a tough economy, is a continually rolling focus on short-term deliverables vs. long-term vision. In many cases, long-term vision becomes impossible because of the focus on doing everything right now to “keep the wheels on the bus”.
Let’s first define vision so we know what we’re striving for before we move on to the balance issue. A true organizational vision provides a purpose for all the activities of the team from executive levels all the way down to the frontline. If it is compelling enough, it can and should be a catalyst for creating commitment and inspired performance at all levels of the business. Team members on the front line feel like they are a part of something larger than themselves. It contributes to a feeling of belonging that takes people beyond the “do my eight and hit the gate” mentality. While some people would say a solid organizational vision is “motivational”, the truth is that it goes much deeper than just motivation. Motivation in and of itself can be short lived and cyclical. True commitment is what takes a company to a corporate culture of “inspired performance” where all hands are on deck for excellence all day, every day.
Executive managers need to be in touch with the frontline by understanding and being a part of what makes them successful. Having a vision that a person can believe in adds credibility and importance to every team member’s job. It’s the difference between members of the housekeeping staff at a hotel saying “I clean sleeping rooms and bathrooms every day” or saying, “I’m a part of a worldwide team striving to provide the best experience away from home that our customers can possibly have. We enhance people’s lives through celebrity service.” That does not change the work. However, it does provide purpose and meaning to the work that allows that person to be committed and not just compliant. That is the power of a compelling organizational vision.
A powerful organizational vision, as Dale Carnegie himself might say, gives people a strong reputation to live up to. It provides the foundation for creating high performance employees that consistently get better all the time. It needs to be stated and lived every single day. The vision and values of the company need to be discussed every day in short “huddle” meetings that talk about “wins” and “misses” from the previous day. These “huddles” are only 5-10 minutes maximum in time. They remind the team of why they are at work, what they are striving to achieve and how they are going to get it accomplished. A strong vision goes hand in hand with the values of the company and clear definitions of what each value actually means. It’s great to say that “integrity” is one of the values your business lives by every day.
OK well what exactly does that mean to the frontline employee that comes into work every day? Do they know the corporate definition of integrity and how that affects them and their work each day? If the answer is “no” then the first action item on the management list should be to explicitly define your vision, mission and values for the team. This is an important and powerful exercise because if you don’t do it, assumptions get made about what things mean and, even worse, people just plain don’t care because it means nothing to them.
Or the other thing that can happen in your organization is that “unstated” vision statements can start to become what people live by at work. Tom Peters, famous organizational consultant and author of the classic book, In Search of Excellence, discusses this in his work. He talks about a company that had a plethora of “pinch points” (things that restrict the natural flow of energy, creativity, efficiency and effectiveness in an organization). They had no idea what their leverage points were that they needed to focus on to get better. In fact, as Peters says, when he asked the executive team to address the problems their defensive reaction was, “But we’re no worse than anyone else!” He goes on to, in jest of course, describe this as a great organizational vision, “Acme Widgets: We’re no worse than anyone else!” Clearly, not only was the frontline compliant and not committed in that organization, even the executives had the mentality of just “cashing a check”.
The vision of the organization is the foundation for understanding the mission and the values of your organization. The vision defines the future which allows the mission to define what you actually do on a more granular level. The values shape your actions every day you come to work. Make no mistake about it, while a vision is the desired future state for your organization, a strategic plan is necessary to get from where you are now to where you want to be. Yet, the strategic plan cannot successfully be created, much less implemented, without a strong vision to move towards.
Also, managers need to explain and communicate the importance of how even mundane, frontline tasks affect the business and are important to the accomplishment of the vision. A restaurant manager, who was new to a particular location, noticed that cleaning the bathrooms was a task that employees hated to do and thought was not important. Therefore, the restroom facilities were never kept clean and it affected the customer experience at the establishment.
The first thing this new manager did was talk about the vision of the restaurant company to all the employees. He explained that the cleanliness of the bathrooms directly affected their ability to become the leader in world-class casual dining in the southwest. Each morning when he came into work, he would immediately go to the bathrooms to check how clean they were. An amazing thing occurred with the staff. What was once thought of as an unimportant and repulsive job within the restaurant that nobody wanted to do, became a job that people volunteered to do proudly. The restrooms became impeccably spotless and the employees started to take great pride in cleaning them. They now knew how important that task was to achieving the vision of the company.
So once you have defined and communicated the vision to all levels within the company, it’s time to move forward. When you are having daily “huddles” to discuss all the aspects of the company’s vision, mission and values, at that point, it is important to work towards a balance of both short-term execution and long-term vision. Now it is time to map out what that looks like within your company.
Of course every business has to get short-term deliverables accomplished or else there will be no company left to achieve the long-term vision. The real pitfall is in adopting a “bipolar” or “either-or” management philosophy. In other words, when it’s convenient, focus on the long-term vision but when you want to bump up the numbers in the short-term you focus only on the here and now. This can lead to possibly making decisions that do not mesh with your company values and will derail your ability to achieve the long-term vision.
The idea is that each week, while mapping out short-term deliverables, think about how each one of them relates to the long-term vision. If you notice an incongruence with your company values or a negative correlation between that deliverable and your long-term vision, perhaps you are doing the wrong things at this moment. It’s not just about the quantity of short-term action items you can accomplish. It is about the quality of how each one of those initiatives affects the accomplishment of the overall vision. Many large, public companies get caught in this trap because they are hyper sensitive to the numbers for this month or this quarter. They always want to know how the shareholders will react and, understandably, want to keep them happy.
Of course it is important to make sure the stakeholders in the company are satisfied in the short-term. Yet, at the end of the day, if decisions are being made in the short-term that may negatively affect the long-term vision, that becomes a problem. Think of it like this…
Perhaps there are some operational “pinch points” that have been affecting the profitability of the company. Yet, because of the push for revenue, those pinch points are being ignored at the moment to bring in more immediate revenue. It’s like a tooth that has been bothering you for some time. The pain of the tooth (the pinch points) is present but yet it is bearable – annoying but something you can live with for now.
So, in order to keep moving with things that you believe are “important” right now, you ignore the tooth. Then, interestingly enough, it suddenly goes from “important” to “urgent” because as you wake up one morning the tooth has now broken which is going to cause you to have to have a painful root canal and several dental appointments to fix it. It takes up more of your time; it, all of a sudden, becomes a “surprise” or a “crisis”. The irony is that it could have been repaired before without all the additional pain and having to deal with such a “surprise”.
Yes it would have taken some time to get it fixed even when it was just “important” and, in truth, it probably would have caused a bit of short-term pain. However this generative behavior could have avoided a cesspool of reactive situations that you created for yourself. Sometimes in companies, managers need to make an assessment of what is important that needs to be addressed now. Because once it becomes urgent, the healthy balance between short-term execution and long-term vision becomes exceedingly difficult. There tends to be no focus on the long-term vision when managers are consistently dealing with issues that are “urgent”.
So make sure you have a clearly defined and communicated vision. Let all levels of the company know that it is important to them and what it means to them on a daily basis. Then work hard to link your short-term deliverables with the long-term vision. How do they affect the vision? Are they the highest return things you should be focusing on right now? Are these deliverables the best use of your time right now in order to achieve the long-term vision?
Every manager, every day should be making the assessment of how short-term deliverables and decisions relate to and affect the long-term vision. That is one of the ways that, as Jim Collins would say, companies can go from “good” to “great”.
- Michael L. Stahl