CHAPTER 2
Why Do We Not Have Better Leadership?

In his seminal book On Leadership, John Gardner shared an observation: “Why do we not have better leadership? The question is asked over and over. We complain, express our disappointment, often our outrage; but no answer emerges.”1 This question is a familiar and recurring one. I’m sure you see it crop up repeatedly in the media in stories of political leaders or corporate executives embroiled in scandal, corruption, and wrongdoing. What I find interesting is that Gardner first raised this question in 1990. That was 30 years ago!

By chance, that happens to be the year I started my first company and began my journey to becoming a leadership adviser. The puzzling thing is that Gardner’s question is probably even more relevant today than it was back then. I wonder what he would have to say if he were around to witness today’s leadership? Consider the number of corporate scandals, the rampant sexual harassment cases that led to the #MeToo movement, the low state of employee engagement, the erosion of trust and confidence in senior leaders, and the political turmoil created by many world leaders. It has been an astonishing few years during which we have witnessed some dreadful leadership. An article in the Harvard Law School Forum on Corporate Governance cited more than 400 business executives and employees (including several prominent and high-profile CEOs) as being accused of misconduct over an 18-month period.2 Four hundred. No, you did not misread that.

If this is not concerning enough, many of the senior executives accused of wrongdoing are rarely held accountable. For example, two CEOs of Wells Fargo left their companies unscathed, even after their organizations opened 3.5 million fake accounts, wrongly foreclosed on hundreds of homeowners, and illegally repossessed thousands of cars under their leadership.3 How is this possible?

The World Economic Forum goes further. In Outlook on the Global Agenda 2015,4 they shared findings of a survey of senior leaders that revealed 86 percent of them agreed that we have a global leadership crisis. This cry isn’t new. In the 1980s, James MacGregor Burns, an American historian, presidential biographer, and leadership expert, wrote that the plight of leadership is a result of the mediocrity and irresponsibility demonstrated by many leaders. He also believed that few leaders step up and show the kind of leadership needed for the times in which they are leading.

To me, the crisis we lament isn’t just about leadership, but is really about leadership accountability. Quite simply, the problem we face is that far too many leaders are not stepping up and not behaving in an accountable manner. My own research of close to 3,000 global senior business executives and human resources leaders confirms that companies around the world are facing a fundamental leadership accountability gap (see Figure 2.1).5 We found that 72 percent of survey respondents believe leadership accountability is the critical business challenge facing their organizations, while only 31 percent of organizations are satisfied with the degree of accountability demonstrated by their leaders. We must do better! Before we explore how, we need to understand why the leadership accountability gap exists.

The figure shows the impact of leadership accountability gap on companies around the world. 72 percent of survey respondents believe leadership accountability is the critical business challenge facing their organizations, while only 31 percent of organizations are satisfied with the degree of accountability demonstrated by their leaders.

Figure 2.1 The Leadership Accountability Gap

As discussed in the previous chapter of this book, the world in which leaders lead is getting more complex every day. Success or failure in almost every endeavor ultimately comes down to leadership. There are those who are truly accountable and able to drive extraordinary results. Then there are those with good intentions, but not able to drive success. Finally, there are leaders who are ineffective and who typically will fail.

Leadership Is Not as Strong as It Needs to Be

In The Leadership Contract, I explored how leadership had become disappointing, disconnected, and disgraceful. Several key themes emerged from my research and discussions with clients. First, we continue to rely on the heroic model of leadership. We glorify charismatic leaders. We also continue to promote technical superstars into leadership roles, and we have a quick-fix view of what it takes to develop leaders. As I began to write this book, I realized that not only do many of these challenges still exist, but more have emerged. We need to come to terms with these challenges because if we don’t, we will never be able to make things better. Let’s explore them below.

Leaders Are Overwhelmed

As we discussed in the last chapter, leaders today are facing more complexity than ever before. Many of the leaders I talk to say they feel overwhelmed and overloaded in their roles, which in turn erodes organizational performance and productivity.

Complexity Continues to Increase

According to research conducted by the Boston Consulting Group (BCG), business complexity has increased 35 times from 1955 to 2010, and organizational complexity has increased six times over the same period.6 BCG also found that managers spend a great deal of time bogged down in their roles. For example, do you know how many levels of approvals the typical manager must obtain for any decision? If you thought seven, you would be right. Seven levels. Are you kidding me? There’s no way to be accountable for your actions under those conditions.

These are frustrations I hear a lot from leaders. Many are bogged down by things that aren’t adding value to the organization. Further evidence comes from our one-day Leadership Contract program. One exercise asks leaders to define how they make the hard work of leadership even harder for themselves. When we tally the most frequent response, we find some similar patterns globally. Leaders admit to getting in over their heads, being completely driven to distraction, and in turn, they remain stuck waiting for permission. Is this also happening to you?

If complexity was not already difficult enough for leaders, all the events to the global pandemic made our world even more complex and challenging. Our ability to lead effectively becomes even more critical.

Matrix Structures Create Ambiguity

The Gallup organization found that close to 84 percent of us work in a matrix structure of some kind. These structures typically establish dual reporting lines, which mean most employees end up being accountable to two different bosses. These structures are intended to create value for the organization, but in practice, they establish uncomfortable ambiguity and lack of role clarity—and erode accountability.7

In my own experience in matrix environments, I have often found myself in meetings with a cast of colleagues from different functions or geographies. As the conference call starts, it’s clear that few know who owns the outcomes. The meeting goes on and on without any real purpose. At the height of my frustration, I’ll ask, “Who is accountable for this meeting?” Awkward silence follows. It becomes clear that there is no clarity as to who owns the outcomes. Other leaders I’ve worked with have shared similar stories of frustration.

In the end, we haven’t done a great job helping leaders learn how to lead in a matrix. We leave it to them to figure it out. Some do. However, the majority do not. Now here’s the problem. When frustrations arise, leaders retreat to their silos, defeating the original purpose of matrix structures.

Leading in a Virtual World Challenges Many Leaders

Research reveals that 85 percent of global teams work and meet virtually, and 40 percent of them have never met each other face to face.8 In the book Can You Hear Me?, author Nick Morgan explains that most leaders now work with colleagues from different geographies and across multiple time zones.9 Technology can make us more productive. However, as standard as virtual work and virtual teams have become, many leaders and teams still aren’t equipped to work in this virtual world. Morgan explains that everything is harder in a virtual world: how we communicate, how we make decisions, how we get work done, and how we attempt to hold each other accountable. This is the reality of leading today. The global pandemic made the world even more critical. We all needed to pivot quickly to adapt to a very different way of working.

All of these issues weigh heavily on leaders and employees. Workplace stress is becoming a significant challenge in many organizations. In fact, the World Health Organization recently and officially classified workplace burnout as an occupational phenomenon and revised the International Classification of Diseases.10 They define burnout as a syndrome resulting from chronic workplace stress and defined by four factors which include: (a) feelings of exhaustion and depletion, (b) increased mental distance from one’s job, (c) feelings of negativism and cynicism, and (d) reduced professional effectiveness. We must find a way to support leaders and employees so they have the capacity to be effective in their roles and work effectively in a virtual world.

Leaders Are Disengaged

For decades, the research on engagement has remained relatively stable. At any given time, you can expect 20 to 25 percent of your employees to be fully engaged. Another 20 to 25 percent are fully disengaged—but they keep showing up to work, and you keep paying them. The rest are only moderately engaged. Many companies try to fix this problem by adding more foosball tables or improving the quality of cafeteria food, but few of these strategies have any significant impact.

Here’s the other part of the problem. Your leaders are also not engaged. The Gallup organization report The State of the American Manager11 found that only about 35 percent of managers are engaged in their roles. Fifty-one percent are not engaged, and 14 percent are actively disengaged. A large portion of these leaders do not care about their companies. I’m not sure how we hope to drive success if leaders don’t care about customers, employees, and the company. We pay an exorbitant price for this disengagement. Gallup estimates the cost to the U.S. economy to be an estimated $319 billion to $398 billion annually.

If leaders are disengaged, it’s no wonder employees are also disengaged. According to Gallup, leadership makes up an estimated 70 percent of the variance in employee engagement. Many companies have missed the boat on this issue. They have focused on superficial issues and ignored or underestimated the impact that their leaders have on employee engagement.

It’s not just one’s direct experience with a manager that impacts engagement. It turns out that the overall quality of a leadership culture also matters. Research reveals that when employees see their most senior leaders and other managers working well together, their sense of engagement jumps to 72 percent.12 However, when they perceive their senior leaders and the rest of management are not working well together, engagement drops to 8 percent. Employees are always watching how their leaders work together and are forming impressions about the company and its culture.

When leadership isn’t up to the task, trust declines. The research firm Edelman has been measuring and tracking trust for some time now. They have found a “staggering” lack of confidence in leadership. In a recent global survey, 63 percent of survey respondents said that CEOs are not at all or only somewhat credible.13 The credibility of CEOs fell by 12 points in one year to just 37 percent globally.

So, if you are desperately trying to improve the engagement of your employees, the answer is clear: Fix the engagement and effectiveness of your leaders. Mediocre leadership will never drive high employee engagement.

Leaders Are Underprepared

A recent McKinsey study found that 83 percent of global leaders believe they are underprepared for their new roles.14 Only about a third of global leaders feel that their organizations effectively support leaders assuming new roles. No wonder research also reveals that 27 to 46 percent of transitions into executive positions end in disappointment and outright failure. What are the top two barriers? Close to 70 percent of leaders attribute their inability to succeed to politics, culture, and people issues. An equal number regret that they didn’t move quickly enough on changing the culture in their organizations. I have argued for a long time that organizations need to focus their energies on supporting those new to leadership roles, especially at critical turning points.

Getting leadership transitions right has a direct impact on the business. For example, the Corporate Executive Board found that when leadership transitions are not successful, team engagement erodes by 20 percent, and team performance decreases by 15 percent. When leadership transitions are successful, the team’s likelihood of meeting their three-year performance goals is 90 percent and attrition goes down 13 percent.15

Part of the problem may be that we don’t do a good enough job of helping leaders get ready for their roles. Research conducted by the Center for Creative Leadership found that 60 percent of front-line leaders never receive any training or development to help them succeed in their roles.16 So they end up trying to figure it out on their own. Many develop bad habits that stay with them as they rise through the ranks. Much of leadership development is spent trying to reverse bad habits that leaders have developed. My team and I have seen this countless times in our client work. Every time we meet with senior executives to discuss a front-line leader training program, there is always a senior leader who admits that they need the same training. The leader then shares that they never received any development or support when they started as a leader. Imagine all these senior leaders, without really having the basic skills that all leaders need to be successful. What impact is this having on our organizations? The impact is obvious. Research estimates that only about 50 percent of managers are competent in their roles. Even worse, some feel that most managers are a disappointment, completely incompetent, mis-hired for their positions, or complete failures.17

Interestingly, this isn’t just a manager issue. Even some CEOs struggle with feeling unprepared for their jobs. Egon Zender, a global search firm, found in a survey of 402 CEOs (from 11 countries and a cross-section of industries) that only 30 percent felt fully prepared when taking on the top job. The majority felt that the role was much harder than they expected. Part of what makes the leadership role challenging is the need for personal transformation. Close to 80 percent of the CEOs surveyed agreed that they needed the capacity to transform themselves as well as the organization. They also recognized that a commitment to personal reflection was critical to their success. About half reported that developing their senior team was much more complicated than expected. With this kind of challenge, you would think that a CEO would reach out for help and support from their boards. Unfortunately, this doesn’t seem to happen very often. Only 28 percent of CEOs reportedly turn to their boards for feedback and support.

Leadership Development Is Underwhelming

A key reason that leaders feel underprepared for their roles is because of the leadership development industry itself. It hasn’t kept pace with the complexity and pressures that leaders face. It’s not that companies are not investing in leadership. Not at all. According to Josh Bersin, a leading industry analyst, researcher, and educator, leadership development is an enormous industry. More than 70,000 books and videos on the topic are available. Bersin also estimates that about $14 billion is spent annually in the United States on leadership development programs alone.18 Leadership development is big business. In recent years, spending has been increasing at a rate of 14 percent a year.19 Companies are investing, but they’re not getting results.

Several research studies paint a less-than-stellar picture of the quality of, and satisfaction with, leadership development efforts in organizations. For example, just 37 percent of leaders rated the quality of an organization’s efforts as being high or very high,20 and only 40 percent of Millennials rate leadership development programs as excellent. These findings are consistent with research done by the Brandon Hall Group that found 75 percent of leadership development to be ineffective.21 The reasons cited include the lack of an overall leadership development strategy and the lack of an innovative approach to learning and development.

A survey conducted by Korn Ferry, a global search and leadership firm, revealed that only 17 percent of C-suite executives are confident they have the leadership talent needed to deliver on their company’s strategic priorities.22 Forty percent of respondents reported that their organizations do not review their company’s leadership needs against their business strategy. In other words, there is no connection between leadership development and an organization’s business strategy. From my experience, this is a red flag. If leadership development and business strategy are not connected, then an organization is wasting time and money. In addition, we see companies pay a price in terms of their inability to execute their business strategy.

The Price We Pay—an Inability to Successfully Execute Strategy

If you are a leader who is feeling overloaded, disengaged, or underprepared for your role, it’s understandable how these feelings can erode your sense of engagement. It is also understandable how this can lead one to become mediocre and unaccountable. There is also a significant price we pay for all of this, and to me it’s all about the inability to execute strategy. Multiple studies have confirmed that most organizations struggle to execute their desired strategy. For example, a recent survey by the Brightline Initiative and Harvard Business Review Analytic Services found that only 20 percent of companies are successful in achieving their strategic initiatives.23 The study also confirmed five barriers that impede strategy execution:

  1. Too many strategic and change initiatives are introduced at once and overwhelm leaders.
  2. Poor communication and information sharing lead to a lack of clarity.
  3. Insufficient resources equate to an inability to deliver the strategy.
  4. Senior leaders don’t agree about the strategy and/or how to implement it.
  5. The purpose of the strategic initiatives is not well communicated to the organization.

What do you notice about this list of barriers? They all have to do with leadership. If your organization has many mediocre and unaccountable leaders, they will never be able to create a compelling strategy, let alone execute one. As more companies attempt to transform themselves to be successful in the future, they need leaders ready and able to execute their strategy. The only way to overcome these barriers is to create real clarity about strategic priorities. Many senior executives assume there is clarity, when there isn’t. After they have completed their road show, shot their corporate video, or completed town hall meetings, they assume everyone is clear. I can tell you from experience that most leaders are not clear. My team and I see this repeatedly in our work with leaders. Without strategic clarity, accountability won’t happen, and goals won’t be met.

The Faulty Assumption We Continue to Make

In all of the ideas on the current state of leadership explored above, we need to understand one more important issue. It’s one that holds us back, but we may not even be aware of it. It’s the prevailing and faulty assumption that many people have about leaders. What is it? I’ve learned that we make a faulty assumption when it comes to leadership. Mainly, we assume when someone takes on a leadership role that they will automatically step up personally and hold others accountable. We assume that when you give people manager titles, they will step up. You hope they will be accountable. But this isn’t the case at all. The reality is that leaders are not good at being accountable themselves, and they’re not good at holding others accountable. Writing in the Harvard Business Review, Overfield and Kaiser found that accountability is the single most neglected behavior among leaders globally.24 They found that 50 percent of leaders are terrible at accountability. While we expect senior executives to be tough in holding themselves and others accountable, the sad reality is that they are not. My global research found that only 45 percent of leaders are seen as being accountable.

In the book Results-Based Leadership, Dave Ulrich, Jack Zenger, and Norm Smallwood write that accountability comes from discipline, which requires getting work done with rigor and consistency, meeting scheduled commitments, and following through on plans and programs to deliver promises. They also describe how accountability comes with ownership—as a person feels responsible for accomplishing work, they own the outcomes at a profoundly personal level. They write, “Leaders who foster accountability continuously improve how work gets done, deliver high-quality products and services, and ensure commitment from all employees.”25

Final Thoughts

When I started to write this book and conduct the research for this chapter, I began feeling quite frustrated. In spite of all the efforts to build strong leadership in organizations, the reality is we still have quite a way to go. Leadership is nowhere near as strong as it needs to be.

I was reminded of the story of Sisyphus, the character from Greek mythology. If you know about him, Sisyphus was a cruel king of Corinth. He was known for his hubris and deceitful ways. Eventually, the god Hades had enough of him and condemned Sisyphus to roll a boulder up a hill for eternity. But Sisyphus was never able to reach the top. Every time he approached the summit, the boulder mysteriously rolled back down the mountain.26 It was an endless, pointless, and fruitless task that was impossible to complete. Any job that is like this is known as a Sisyphean task.

You see, I’ve spent the better part of my career as an adviser to organizations around the world. I worked hard to be a strong leader myself in my corporate and entrepreneurial roles. I’ve worked with hundreds and hundreds of leaders and their companies. But despite all the combined efforts and investments people like me have made to build strong leadership in organizations, it feels like we haven’t made much progress. Have all these efforts become one big Sisyphean task?

We need to be honest with ourselves about the current state of leadership in our organizations. Once we accept that, we need to commit to making things better. It’s time to take your leadership into your own hands. You can’t rely on a company or your manager to do it for you. You need to be accountable for your development as a leader. You need to be the one who inspires others to step up, own their roles, and deliver results. The rest of this book will show you how.

Gut Check for Leaders: Why Do We Not Have Better Leadership?

As you think about the ideas in this chapter, reflect on your answers to the following Gut Check for Leaders questions:

  1. In what ways are you feeling overwhelmed and overloaded?
  2. Are you feeling disengaged and disheartened? Why or why not?
  3. Do you feel prepared and ready to take on the leadership challenges you will face in the coming years? Why or why not?
  4. How has leadership development been underwhelming for you?
  5. How confident are you in your ability to execute your company's strategy?

Notes

  1. 1J. W. Gardner, On Leadership, p. xv (New York: The Free Press, 1990).
  2. 2Laurie Hays Edelman, “The Board, CEO Misconduct, and Corporate Culture,” Harvard Law School on Corporate Governance, January 12, 2019, https://corpgov.law.harvard .edu/2019/01/12/the-board-ceo-misconduct-and-corporate-culture/.
  3. 3Cited in https://www.warren.senate.gov/imo/media/doc/2019.4.1% 20Corporate%20Executive%20Accountability%20Act%20Summary.pdf.
  4. 4Outlook on the Global Agenda 2015, World Economic Forum, 2015, http://reports.weforum.org/outlook-global-agenda-2015/.
  5. 5Vince Molinaro, The Leadership Contract (3rd ed.) (John Wiley & Sons, 2018).
  6. 6Yves Morieux, “Bringing Managers Back to Work,” Boston Consulting Group, October 4, 2018, https://www.bcg.com /en-ca/publications/2018/bringing-managers-back-to-work.aspx.
  7. 7Vibhas Ratanjee and Nate Dvorak, Mastering Matrix Management in the Age of Agility (Workplace Gallup, 2018), https://www.gallup .com/workplace/242192/mastering-matrix-management -age-agility.aspx.
  8. 8Jean Brittain Leslie, Margaret M. Luciano, John E. Mathieu, and Emily Hoole, “Challenge Accepted: Managing Polarities to Enhance Virtual Team Effectiveness.” People + Strategy, 41(2), 22–40 (Spring 2018).
  9. 9Nick Morgan, Can you hear me?: How to Connect with People in a Virtual World (Boston, MA: Harvard Business School Press, 2018).
  10. 10Ashley Turner, “The World Health Organization Officially Recognizes Workplace ‘Burnout’ as an Occupational Phenomenon,” CNBC, May 28, 2019, https://www.cnbc.com/2019/05/28 /who-recognizes-workplace-burnout-as-an-occupational -phenomenon.html.
  11. 11“The State of the American Manager—Analytics and Advice for Leaders” (Gallup, 2015).
  12. 12“Effective Managers—Your Critical Link to Successful Strategy Execution” (Towers Watson, 2015).
  13. 13Matthew Harrington, “Survey: People’s Trust Has Declined in Business, Media, Government, and NGOs,” Harvard Business Review, January 16, 2017, https://hbr.org/2017/01/survey-peoples -trust-has-declined-in-business-media-government-and-ngos.
  14. 14Scott Keller and Mary Meaney, “Successfully Transitioning to New Leadership Roles,” McKinsey & Company, May 2018, https://www.mckinsey.com/business-functions/organization /our-insights/successfully-transitioning-to-new-leadership-roles.
  15. 15Kruti Bharucha, “The Cost of Poor Leadership Transitions,” https://www.peoplematters.in/blog/change-management/the-cost-of-poor-leadership-transitions-4429?utm_source=peoplematters&utm_medium=interstitial&utm_campaign=learnings-of-the-day.
  16. 16Talent Reimagined: 7 Emerging Trends for Transformative Leaders (Center for Creative Leadership, 2018).
  17. 17William Gentry, “Derailment: How Successful Leaders Avoid It,” in Elaine Biech (Ed.), The ASTD Leadership Handbook (Alexandria, VA: ASTD Press, 2010), pp. 311–324; William Gentry and Craig Chappelow, “Managerial Derailment: Weaknesses That Can Be Fixed,” in Robert B. Kaiser (Ed.), The Perils of Accentuating the Positives (Tulsa, OK: Hogan Press, 2009), pp. 97–113.
  18. 18Josh Bersin, “Why Leadership Development Feels Broken: And How We’re Fixing It,” Josh Bersin, July 7, 2019, https://joshbersin .com/2019/07/why-leadership-development-feels-broken-and -how-were-fixing-it/.
  19. 19Dori Meinert, “Leadership Development Spending Is Up,” SHRM, July 22, 2014, https://www.shrm.org/hr-today/news/hr -magazine/pages/0814-execbrief.aspx.
  20. 20Ready-Now Leaders: 25 Findings to Meet Tomorrow’s Business Challenges Global Leadership Forecast 2014|2015 (Development Dimensions International and The Conference Board, 2015).
  21. 21Lorri Freifeld, “Survey: Leadership Programs Lack Effectiveness,” Training: The Official Publication of Training Magazine Network, September 30, 2013, https://trainingmag.com/content/survey-leadership -programs-lack-effectiveness/.
  22. 22“Leadership Development: CEOs’ Strategic Powerhouse,” Korn Ferry Institute, September 23, 2015, https://www.kornferry.com /institute/leadership-development-ceos-strategic-powerhouse.
  23. 23“Testing Organizational Boundaries to Improve Strategy Execution,” Harvard Business Review, https://s3.us-east-2.amazonaws.com/brightline -website/downloads/reports/HBR_Research-Report_Brightline .pdf?utm_source=resource-page&utm_medium=skip-link.
  24. 24Darren Overfield and Rob Kaiser, “One Out of Every Two Managers Is Terrible at Accountability,” Harvard Business Review, November 8, 2012, https://hbr.org/2012/11/one-out-of-every-two -managers-is-terrible-at-accountability.
  25. 25Dave Ulrich, Jack Zenger, and Norm Smallwood, Results-Based Leadership (Harvard Business Review Press, 1999).
  26. 26https://grammarist.com/usage/sisyphean-promethean-or -herculean/.
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