Kiss cookie-cutter leadership advice goodbye!
By Michael Bazigos, PhD
Vice President for OrgSolutions, McKinsey
Business leaders are drowning in a sea of leadership advice. Amazon lists more than 175,000 book titles on the subject. Go to any airport bookstore and you can find all types of business advice, but it’s usually one size fits all. Our research, collected from surveying over three million people for more than a decade, has shown us that the opposite should be true: unlike the theoretical models out there — the stuff that you may read about in those books — leaders should be practicing a “Moneyball” approach that’s probability-based.
But what does that mean? Sure, there are a handful of behaviors that all leaders should do all of the time. But as importantly, there are certain leadership behaviors that are performance and health differentiators, and they depend completely on where the organization is in its health journey. And health level predicts long-term performance, with the healthiest companies out-earning the least healthy by triple the shareholder return.
Think of a business that is severely challenged: its employees aren’t on the same page, its systems outdated, its model unsustainable. It may be running out of cash, fast. What’s required of its leadership would (and should) be totally different from the leadership of a business that is at the top of its game. You wouldn’t want somebody using “motivation-speak” when the company is about to hit a brick wall. Luckily, there is a specific set of behaviors that can either be developed or sought in those leading at each stage of the journey.
Digging Out from Under
If you’re in the bottom quartile of health, your main job is to dig out from under. And digging out requires a certain set of behaviors. The most successful leaders in this situation are centered, calm, able to recover from failure, and ultimately data-based in the decisions they make. They are good at problem solving, and roll-up their sleeves to make decisions quickly and effectively. These are the people who you would want to assign to the most challenged businesses.
Getting Over the Hump
Once organizations have dug out, we see them as aspiring to “get over the hump.” The focus is now on regularizing the organization, getting the ship moving on even keel, and keeping groups organized, on task, and focused on results. Leaders should begin to move towards encouraging collaboration and problem solving as a team. You can imagine someone who is really great at keeping groups on task — that is a middle health type of behavior. So you would want to either place these types of people in those business units, or train up the ones that are already there.
If your team is hitting it out of the park, it may make the most sense to find someone who stays out of their way. A leader who is really good at motivation, role modeling, and conveying organizational values allows his or her team to get the job done and makes them want to come to work and keep doing it. These are the people who you want leading your healthier business units.
Leadership is not one size fits all — despite what you may read in most of the books out there. This isn’t about leadership style — but the practices that drive businesses to success or failure. Goals, approaches, and how talent is placed and used effectively, depend on where your organization is in its health journey.
There are, however, several things that good leaders should be doing, independent of health. Leaders should be counted on to offer a critical perspective on strategy. Even though the level of collaboration might differ depending on the level of health, it should always be a part of the organization’s ethos. And finally, leaders should always be champions both of their people and the change they are trying to enact.
When it comes to leadership behaviors that work, the health of an organization directs almost everything. Prescribing what you need, when you need it, is as critical to turning a company around as it is to keep it innovating and growing.