What would you pick if you were asked to choose between a leader who performs well and one who behaves well? That was the question I was asked in a coaching session with a few executives. We were discussing owner-managed and owner-led organisations. Is there any difference between an organisation managed or led by the owners?
There are no right or wrong answers in coaching sessions. It all depends on the perspective of the person contributing. The story I told the group captured my response to the above questions.
Efe is the majority shareholder and the number one person in his company, a conglomerate with over fifty years of offices worldwide. He is a celebrated business leader and elder statesman. He is the chairman of the company groups and is known for rewarding performance. He is very competitive and wants his companies to be industry leaders in their respective sectors. Among his chief executives are top-performing men and women. He shares strategies and pushes them to achieve the corporate goals of the conglomerate. Efe, the chairman, recently read a book on building sustainable institutions from organisations and decided to retract his winner-take-all mentality. He reflected on how and why the staff attrition within his companies has been astronomical over the last decade. With the help of a leadership coach, he did an impact analysis of the behaviour of his senior leadership team members, reviewing their motives, contributions, influence, and effects on the organisations they are leading or have led.
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Out of the self-reflection came insight into why the conglomerate was losing ground to new companies and why the ex-staff hate ratio was high. Being the point man, every leader wants to impress Efe, as he often makes irrational reward and sanction decisions. He had been delusional about performance above anything else, tolerating and celebrating destructive behaviours to build sustainable organisations. He noticed that most of his high-flying Chief Executive Officers have people management problems. They delivered corporate results over three years and plummeted into poor outcomes with a high attrition rate of talented employees. They do anything to impress him and meet his expectations for their rewards, but to the detriment of those working for them. These goal-getters are high in performance but come out low in behaviour. They have destroyed the emotions of people and created mental health problems and hatred for the organisations. However, they managed to produce a result that would impress the chairman and reward them.
“ Focusing on and measuring behavioural attributes is a sine qua non to building teams that generate sustainable results for the organisations, thereby creating institutions that outlive the whims and caprices of the owners.”
In what sounded like a nightmare, Efe announced a new rating model that put the behaviour of the leaders in his groups of companies above the performance. In his words, we would measure your success using business metrics. However, in achieving those metrics, how you inspire your staff and the type of atmosphere you create are more important to ensure the sustainability of the success you are delivering. He told leaders that the wellness and engagement of the employees are essential and that there have been gaps for years, which has resulted in a negative brand image for his conglomerate. Suppose your team’s performance is 90 percent and your leadership and behavioural competence is 50 percent. In that case, we will quickly release you from the team because you will destroy the momentum in the long run.
The radical departure from the norm surprised the conglomerate’s team of intelligent and experienced C-level officers.
Why was the sudden change, and how vital is Efe’s realisation of the importance of leading a sustainable organisation?
The conglomerate chairman has shifted from an owner-managed mindset to an owner-led focus. Depending on the organisation’s maturity stage, owners are not expected to be involved in daily operational activities. They are expected to focus on soft and strategic things that create an enabling environment for the organisation to be transformed into an institution with values, culture, and high levels of staff engagement and fulfilment. Building solid internal cohesion and engagement creates sustainability in processes and outcomes. It is a sustainable advantage over competition.
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The leaders who are trying to impress the chairman with recognition and reward are different from the staff producing the result they are presenting. They have teams of talented people who are responsible for facilitating direct interaction with customers. Therefore, a leader creates an atmosphere for sustainable results through behavioural attributes. Focusing on and measuring behavioural attributes is a sine qua non to building teams that generate sustainable results for the organisations, thereby creating institutions that outlive the whims and caprices of the owners.
While leaders’ performance is critical, how they lead to generate performance is essential to sustaining it. Efe’s paradigm shift recognises the crucial role of leaders, a mistake often made by owner-managed organisations. In an owner-led organisation, the ultimate leader, the owner, is the custodian of the behaviours and values for which the organisation can stand. They must first exude those behaviours and oppose any behaviour driven by personal gains and recognition for promotion and financial compensation.
The tiny line for owner-led leaders is to measure behaviour aside from performance to gauge the extent to which the organisations under them are moving towards sustainability in every business sphere. Beyond performance, behaviour is critical to sustainability.
Babs Olugbemi FCCA, the Chief Vision Officer at Mentoras Leadership Limited and Founder of Positive Growth Africa. He can be reached on [email protected] or 07064176953 or on Twitter @Successbabs.
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