The Impact of Poor Leadership

If a company is struggling, underperforming relative to its potential, the leadership of the organisation really needs to be in the spotlight. 

I’m sure we’ve all experienced good leadership, where the team you were a part of were engaged, productive and delivering whatever your companies output at that time was (projects, products, services, sandwiches, anything). I’m sure you had a strong level of trust in your manager or leader, and they inspired you to get the job done to greater or lesser degrees. Incompetent leaders on the other hand can be responsible for rising anxiety, alienated or disengaged workers and can even actively spread a toxic culture within a team or a wider working environment.  Harvard Business School told us last year that the cost of a toxic worker is two times that of hiring a Rockstar performer.  

Poor leaders cause businesses two major issues: 

1. Poor employee engagement (productivity) 

2. High levels of passive job seeking 

Finding and attracting talent is only half the battle, and companies like ours are here to help.  But you also need to develop and motivate staff in order to ultimately retain those stars you spend time and money on to bring into your business.  

Two Kinds of Bosses 

The first kind of boss supports their team and has a positive influence and impact, which translates into productivity.  The second kind, well, just does not do those things.  Almost one third of employees report feeling underappreciated by their boss, whilst almost half say they have been verbally, emotionally, or even physically abused at some point during their career.  Now think about this statistic; 3 out of 4 workers in a recent study said they felt their boss was the most stressful aspect of their job. 

The Accidental Manager 

Imagine letting someone without the proper training fix a hole in your roof or defending you in court against that speeding fine.  Of course, you would not, but up and down the UK there are millions of people in management positions having received little or no training.  People are complex, anyone that has managed a team will know everyone is different and will need different things from you in order to thrive in their role.    

This is true in many industries from Engineering through to our own Recruitment.  You can find lots of people jobs, here you go manage a team of people doing the same thing.  The unfortunate reality is that too many people find themselves out of their depth.  Contrary to popular belief, studies show most people in management or leadership positions exhibit overconfident rather than underconfident characteristics.  Confidence (how good you THINK you are) is primarily beneficial when it is in sync with your competence (how good you ACTUALLY are).  Research on this very subject by the Journal of Economic Psychology has shown that people who are bad at something rate their own skills as highly as people who are good at the same thing – mainly due to a lack of self-awareness.  So, this means we cannot realistically rely on those in leadership to accurately measure their own capabilities.  

The Productivity Puzzle 

Historically UK productivity grows around 2% each year.  However, since the financial crisis in 2008 it has remained pretty static, and in the third quarter of 2019 before COVID it was just 2.7% above what it was 11 years earlier in a pre-recession peak. This slowdown is the worst it has been since the start of the Industrial Revolution and has sent economists into a full-on Sherlock Holmes mode to identify the cause. Inevitably one of the causes will be the accidental manager, numbering around 2.4 million in the UK and their cost to their employers is estimated to be in the region of £84m a year according to the OECD. Interestingly, a study by the ONS in 2018 stated that by improving a company’s management capability by just 0.1% would lead to a near 10% increase in productivity.   

The Health Impact  

Research also shows the heavy impact poor management can have on the health of those working for them. Put simply, those working for a bad boss have a greater risk of high blood pressure, chronic stress, clinical depression, anxiety, sleeping disorders…..I could go on. It is clear under those conditions your people cannot perform at anywhere near their best. 

But They Aren’t That Bad…. 

Dysfunctional bosses may be less intimidating to deal with, but their cost is still significant.  Managers and Directors that cannot articulate clearly simply do not provide clarity for their team.  Think of the wasted hours and work that is constantly revisited or revised to meet an unspecified target.  Many of us will have heard “that’s not what I wanted” yet even then struggle to understand the message the boss is very poorly trying to convey.   

Hiding Behind Jargon

I am lucky enough to have worked for and with some great people, who taught me a number of things along the way. And that is not to say I was friendly with all of them, in fact I was probably on friendlier terms with some of the worst managers, but I recognised I was always learning and working towards something. And there is absolutely a counterargument around employees with growth and fixed mindsets, able to receive and understand instruction and direction. But equally I have worked for some people very clearly out of their depth. One springs to mind, someone that would constantly talk about our “plan and purpose” as a team. Despite feeding into the discussion regularly, I never did get to hear what that plan and purpose turned out to be, I left that role 12 months later.