How to fix our leadership crisis

Last time out, I wrote a little bit about what’s wrong with leadership in the western business world today. A lot of business journalism and leadership writing is pretty buzzword-heavy and cliche-driven, so I tried to toss a few grenades and not pull many punches in what I did. Some of you seemed to like it, so that’s good.

Of course, anyone can come out and bitch about the various problems with anything. Hell, that’s part of why Yelp became so popular — people love to criticize and have outlets for that criticism. But as we know from any business model since the dawn of time, it doesn’t matter if you can see the problems — it matters that you have some kind of plan to fix the problems.

So, can we fix leadership?

We can, but it’s an uphill and tough battle. Leadership isn’t necessarily a “product,” although those with the engineer mindset might think of it that way. If a product isn’t good, you can usually identify the root cause and fix it, whether it’s in the specs, the supply chain, the marketing, the unit cost, whatever. If a manager in a business isn’t good, you can see the outcome — the results aren’t there — but the root causes are much harder to pinpoint. It could be that he/she doesn’t understand the deliverables. It could be politics with other leaders. It could be situations at home. It could, honestly, just be good old-fashioned Peter Principle. Some leaders should never have ascended to that level. We all know this.

The point is: it’s easier to fix a product or service than to fix an idea or actually behaviors that represent “leadership,” because the latter is deeply psychological and human and the former is process-driven.

Still, we can try to “fix” leadership a little bit. Here are three-four quick ideas. Before we get deep into this, consider the new principles of organizations. It’s visually represented here:

Got it? Good. Also, you might want to listen to this recent podcast where Brian Solis interviews Paul Miller, CEO and founder of the Digital Workplace Group, about how critically important it is for corporate leaders to add digital literacy to their more traditional skillsets and mindsets. Now let’s move forward a bit.

Reframe training

Here’s a fun little exercise. Let’s say your wife has a kid tomorrow. On the same day (congrats, by the way!), you become a leader at your business. Per national averages, when will you get your first official leadership training?

(Jeopardy music.)

You’ll get it when your kid is 12, i.e. in the sixth grade. Yep. That’s backed up by research.

So, we’re waiting 12 years to train managers — the actual scope of the research says people get their first managerial role at 30, and get their first training at 42 — and that’s bad.

What’s also bad is how we do the trainings. Jeffrey Pfeffer, a professor at Stanford, has a book called Leadership BS. The whole idea is that “the leadership industry” — let’s say “training,” give or take — is worth about $70 billion, with 35% of that (about $25 billion) being spent on leadership/management training.

Pfeffer argues that the whole industry is kind of BS (hence the title of the book) because of all the reasons you’d expect:

  • See/hear only good things about leaders (think “Iceberg Theory”)
  • Too much of a focus on buzzwords like “being authentic”
  • No real metrics on what makes a good leader
  • We want stories out of the leadership industry instead of real focus on what works and what doesn’t
  • The evaluations are mostly around “Did you like the session?” as opposed to anything deeper
  • We focus too much on the normative

So here’s the first thing we need to do: shift how we train. Leadership training needs to be transformational, not transactional. Buzzword alert, right? Let me give you a couple of examples:

  • Teach leaders that profits aren’t the goal; the goal is customer retention, and that leads to profits
  • Teach leaders that it’s not all about hitting targets; it’s about managing the energy of people who work for you to hit the targets
  • Teach leaders that at a high level, you shouldn’t be an individual contributor anymore; you should only be guiding and strategizing around the work of others
  • Teach leaders about flexibility; many people will work harder if given flexibility, because managing your own time is a valuable trait of adulthood

That’s just four ways to start reconceptualizing leadership training. Onto the next point.

Blow up middle management

There are two arguments about middle management. The positive argument is “This is where real work gets done as executives glad-hand and sit in meetings.” The negative argument is “This is where we stash people who have no idea what the hell they’re doing.”

My industry is mostly fitness, and “middle management” doesn’t exist as much there as it does in some industries and verticals — but I’ve still seen it at some of the bigger chains. I’ve met some great, smart, productive people in the middle ranks — and, yes, I’ve met some complete train wrecks.

We talked in the last post (link at the top) about how bureaucratic most enterprise companies are becoming — 20 years ago, enterprise employed about 20M people and now it’s 28M or so — and with that, where do you think those people are ultimately ending up? Middle management. Bain has shown that companies with $5B in valuation have about 9–14 management layers.

Blow it up.

Don’t believe me?

Josh Bersin is a big name in the HR and people management fields, and his Bersin by Deloitte group just had their ninth annual conference down in Florida. My invite got lost in the mail. I jest.

He wrote up a recap of the key themes from the conference, and this part really jumps out:

We don’t need as many middle managers now, so the concept of “leadership by job title” or “leadership by position” has to go away. One of the senior execs I talked with the other day told me “I don’t have time for mid-level managers any more. I can get the information I need to run my business through our digital information systems. If our leaders aren’t hands-on experts in their business areas, I don’t really need them.”

And there you have it — the death of middle management at the hands of more effective technology.

If you just spent an arm and a leg on some CRM like Oracle or Dynamics, and all the info you need to run your business is residing in there, then what exactly do you need those middle managers for? To give orders to the lowest levels? That’s ridiculous. Cut the fat. If someone is a subject matter expert, keep them. If they’re a digital paper-pusher, get rid of them. I hate advocating for firing people, but listen: digital paper-pushers usually are constantly worried about their relevance and potential incompetence. As such, they make life for their direct reports awful. Your turnover rates go way up. It’s not good business, and it’s certainly not good leadership.

Visually, it looks like this. Pay particular attention to “commands leadership” vs. “earns leadership” and “directs and delegates” vs. “leads by example.” That’s the essence of the problem here — as is “confirms to convention” vs. “challenges convention.”

The two-track approach

In most companies, the only way you can make more money is to become a manager. It’s usually the only path. As a result, people inclined towards making money have to be inclined towards management. Now, this is a generalization, although it’s been held up by decades of social science research: the people chasing the C-Suite usually aren’t the most empathetic people in your organization. So they shouldn’t necessarily have 10–12 direct reports, but if they want the end goal, they have to do that for themselves.

This is a problem. It creates a lot of bad leadership.

Here’s a solution. I actually have a friend who pitched this at a Fortune 20 company. They laughed him out of the room. Maybe you will laugh me out of the digital room where you’re reading this, but here goes nothing:

  • Establish two tracks in your org
  • One track is for managers, i.e. people who will supervise others
  • One track is for individual contributors, i.e. people who will work on projects but not manage others
  • Now take a deep breath
  • You can make the same salary on either track

I know, I know — someone drowning in deliverables with 15 direct reports just gasped and said “You mean Bobby can manage no one and make the same as me?!?!” That’s the flaw. But there are some people who are curious, empathetic, prone to coaching others, and just nice guys and ladies. Those people should be leaders. Then over here you have target-chasers, KPI-chest-thumpers, and people who confuse accountability with “screaming at someone.” Those people should, ideally, remain ICs. They can hit targets and prove KPIs for you, but they don’t need to manage others.

When a person in the latter category manages others, now there’s a network effect. The 5–6 (or 10–12) people they manage now hate their jobs. Turnover, boom. Decreased productivity, boom.

If you allow an IC to make $150,000 without being a manager, it’s honestly probably a cost savings to your org — because there’s research out there showing that bad leadership costs your business about $144,530 per day. Do the math. It’s better to promote someone to a high salary devoid of direct reports than do a square-peg, round-hole on “Well, to make more money, this guy has to be a manager.”

In Sum

Alright, that’s three ideas right there. What else you got on fixing our leadership crisis? I’d love to hear.

Bryan O’Rourke is an entrepreneur, consultant, speaker, author, executive and investor, who has successfully advised and driven global brands for over 30 years. He has presented as a keynote speaker at industry and corporate conferences on four continents. He is widely published and quoted in periodicals like Inc. Magazine, the Wall Street Journal and the New York Times. Bryan recently contributed to a book with other European thought leaders Growing The Fitness Sector Through Innovation . Visit his website for more info.