The most often overlooked facet of leadership
There are three distinct leadership responsibilities to the role of the CEO: 1) assure market position or growth (for profit) or increased client/stakeholder satisfaction and sense of value (non-profit), 2) assuring that the organizational climate is safe for employees to grow and prosper, and 3) assuring that operations are efficient and effective.
Recent work with a client brought to mind that the second area, safety, is often overlooked by leaders and by authors on leadership. Enron is the example people are most familiar with of a failure to do this. Leadership took such severe risks that it brought the Federal government down upon the organization, putting all employees at risk. No doubt during the end game, employees were not very productive and totally focused on their own survival.
Such a failure of leadership diminishes the value of leadership’s currency, namely, integrity. Dishonest, unworthy of trust; leadership is no longer able to call the troops to higher goals, or any goals at all for that matter. They have lost it. Employees expect that leaders will assure that the organization is a good community citizen (no demonstrations outside the offices because of environmental pollution, employing child labor in Asia etc.), that there are no threats of lawsuits, that shareholders are not in revolt. I have managed organizations that were rendered “unsafe” because of politics at the board level. It is very disconcerting to staff, damages morale and ultimately productivity.
What is the cost?
Leaders need to understand the cost of compromising principles or having none. In the short term, the path of least resistance is always attractive, but the long term cost is often crippling.
The fail safe to avoid lapses here is to discipline yourself to, in the end, base your decisions on what is in the best interests of all involved. Environment, community, shareholders, board, employees. Each of these is a distinct stakeholder group with a distinct set of needs/wants. Each has merit and should be considered. Thus, virtually every decision will somewhat please and somewhat annoy or alienate. Each has risks for the leader because each interest group holds the CEO to an expectation that he/she will meet ALL their needs and wants, and that their interests should be paramount.
In short, true leadership takes immense courage and the willingness to take risks. As many authors have said, a prerequisite of true leadership is the willingness to walk away from a situation that violates your own sense of ethics. Having to hang in there/compromise in order to pay the mortgage, get the bonus or pad the resume is a recipe for disaster.
I’m interested in your questions and experience with all of this, please send us an e-mail.