The last month or so has seen me getting involved with a whole range of sessions on the subject of leadership. That’s taken me from a full day conference at The University of Bath School of Management to a three day “retreat” with a group of CEOs of SMEs.
Managers exercise power through position and status. Leaders by contrast need followers and followership is voluntary. So how do the followers make the choice of who to follow?
The word that came up time and time again was trust. That’s about an individual being prepared to take a risk on the basis that they expect someone else to do the right thing by them. Think the trapeze artist who lets go of their swing because they believe their partner will catch them. The day the trust stops the act is finished.
Benevolence is one of the four pillars of trust: that is about believing your leader will look after you as well as they look after themselves. It is not, for example, about how much you are paid. It is about believing that what you are paid is fair and equitable when you compare it with how your leader is rewarded.
Simon Sinek uses a phrase about benevolence that I rather like: “leaders eat last”. It summarises perfectly how great leaders put their own comfort and welfare behind that of their people.
I learned a new saying (it’s Dutch apparently) at The Bath University event: trust arrives on foot and leaves on horseback. I like that one too.
I heard a story recently about a business where the staff had all taken pay freezes and in many cases pay cuts to keep the organisation going and colleagues in jobs. The speaker spoke passionately about how they’d all been in it together. The top team led from the front and won great trust as a result.
As the recession receded the business climate improved. And the top team made a fatal decision. They gave themselves some very visible rewards before they addressed all those pay cuts… The trust built over years evaporated in hours.
It makes me reflect a lot on what has happened to executive pay. According to a fairly recent BBC article top executive pay has risen from 60 time’s average pay to 180 times.
It makes me wonder whether many companies ever think about trust and reward in the same moment. Is that bonus scheme encouraging trust or is it incentivising putting results ahead of people?
This leads me neatly to my focus for November. I’m working on a new paper on performance management and in particular how it fits with organisational values. I’ve come across a lot of examples over the years where organisations put great store by their values for 51 weeks a year and then seem to forget them in the 52nd. That of course is appraisal, bonus and pay review week.
In that week values can go out of the window as the “what” becomes more important than the “how”. The sales person that has smashed their targets gets a huge bonus or commission payment – despite the fact they are a horror to work with. The technical expert is forgiven his or her behaviours and given an above average pay rise as they are “too valuable to lose”. And leaders pocket big bonuses despite flouting the values they say they expect from everyone else.
The recession offers some valuable lessons about incentivising the wrong things in leaders. Like bankers taking huge risks to earn big bonuses. Let’s hope we’ve learned some of them.