The difference between good and bad leadership can make a big difference to your bottom line.
That drive into the office can be so painful. The agonizing and feeling of dread can overwhelm you as you fight your way to your workplace. Why do we put up with this headache day after day? What could possibly be so important that you need to go back and tolerate that "bad boss." The qualities of a great leader may include our ability to recognize those signs of strain in our work environment.
In my own HR career, I had the misfortune of being part of a team where I agonized over the trip into the office. I knew walking in that it would not matter how hard I worked or what I accomplished; I would inevitably be chastised for some random inconsequential item. From a personal perspective, as an individual contributor my daily activity and effectiveness plummeted when I reported to that "bad leader."
Negative Into a Positive
As I grew in responsibility, I vowed not to repeat the bad behavior and treat my team with the respect I didn't receive. As an HR executive, how would I partner with the leaders in my organization to ensure they had the tools they needed? Moving into HR and operational leadership roles, a primary focus was to ensure I influenced those around me to recognize bad behavior. Leaders with low turnover and higher employee engagement always seemed to have the best performing teams.
How did I learn the the qualities I needed to be a great leader? Coming out of college I had the honor of serving our country as a 2nd Lieutenant in the US Army, which involved countless hours of leadership lessons. Looking back on this experience and my career in HR, I spent a lot of time learning about leadership. Here are a few of the qualities of a great leader and what I learned:
- Army Sergeant Major — As an army instructor for my cadet class he was a hard-nosed disciplinarian that infused a sense of integrity and honesty. He never swayed from doing what was right and letting me know not only what I did wrong, but how to fix it. Humility was the cornerstone of his demeanor; I carried his lessons with me throughout my career.
- VP HR — Moving into financial services as an HR manager, where my career had been centered on recruitment, was daunting. This leader became a mentor and ensured that my mistakes became a lesson. There was enough space to operate in, with just enough access to get the coaching needed. Accessibility, technical competence and approach ability were this leader's trademarks.
- SVP HR Operations — My peer after a move into a call center management role, where I went from an HR business partner position into HR operations. Years after we went our separate ways and moved onto new organizations, we have kept in touch. Peer-to-peer advice, direct, honest and with empathy.
What Bad Leadership can Mean to Your Firm
As leaders, there are consequences if you ignore your team's deficiencies. Finance leaders play a critical role in the organization by partnering with the CHRO to realize the cost associated with turnover that inevitably surrounds the "bad boss."
Partnering with a small industrial firm in New York throughout 2016, the finance leader, CEO and I looked at trends over a rolling 12 months to completely understand why turnover occurred and how much it was costing. We determined that turnover averaged $5,000 per leaver. This small business, with 600 employees, had a $1 million annual turnover problem, mostly coming from one area of the firm. Granted, not all centered around a specific leader, but still largely within one or two specific departments.
There was an under-investment in the development of management and poor habits were learned or passed on to the next generation of managers. As a finance leader the partnership with your CHRO to identify these trends and determine how to combat poor leadership will, in the end, have a direct impact on the financial performance of your organization.
How Finance Leaders can Help
Executive and leadership training are critical pieces to fund as you determine your HR budget. It is likely far less expensive than filling the same seat in the organization every time someone uses the revolving door. The senior leaders in the firm described above had never thought to invest in their own development, or in the development of their management teams. A few slight changes in who was managing and leading had immediate results and slowed the churn.
The finance leader had a critical role to play in understanding the cost of poor leadership, and was instrumental in the development and funding of programs to develop leadership.
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