Calculating Leader Leverage
My partner Chris Moody recently sent around a note on a concept he refers to as Leader Leverage. I encourage every CEO to read and consider it. His rant follows.
Many of you are probably tired of hearing me rant about some form of what I often refer to as “leader leverage”. If you’ve been lucky enough to avoid these rants, the quick summary is that your biggest lever as a board member is the CEO and your biggest lever as CEO is your direct reports. I learned this lesson the hard way running a very decentralized business with 70 offices in 17 countries at Aquent.
A critical learning about a company’s leadership is whether or not employees trust and respect their senior-most manager. Yet, asking this question directly often doesn’t get a great answer. However, asking it indirectly can be magical.
Using an NPS approach, the example below asks the question, “The company is in a position to really succeed over the next three years.” The different answers are by department.
The average employee believes the Company is in a position to succeed over the next three years. The exception is the employees in one particular department (the red box) who all believe the company is completely fucked. This perfectly illustrates the point that the collateral damage of having a bad leader goes far beyond that leader’s ability to perform their technical job because a bad leader will usually poison a team’s perception of the entire company.
We’ve known for a long time that we needed a new leader in that department for the Company. However, we’ve always viewed the issue with the current leader to be an issue around technical skills. It turns out the ramifications of not having a leader that people can trust and respect goes far deeper.
At Aquent, we found similar results around crazy specific things like compensation where people would go from feeling grossly under-compensated to feeling like they were compensated fairly simply because we made a change in the leader of their market.
If you found this useful and want more of Moody on topics like this, I encourage you to go watch his vlog Venture Kills. For example: