Leaders fail their people, their organizations, the larger society, and even themselves with unacceptable frequency. Every day, in the news, are more stories of leaders failing.
Leaders fail themselves: Dominique Strauss-Kahn, possibly on his way to being president of France before his arrest for sexually assaulting a New York hotel housekeeper; Brendan Eich, the CEO of Mozilla, the Firefox browser company, resigning because of his political contributions to antigay activities; the former Yahoo CEO Scott Thompson, booted out for claiming on his résumé that he had a computer science degree when he didn’t.
Leaders fail their customers: airline executives who have created an experience so unpleasant that their best customers flee for private options and others avoid flying if they can; Amazon, by not carrying some bestselling books and popular DVDs in spats with suppliers; banks inaccurately foreclosing on properties and also debiting customers’ checking accounts for withdrawals in ways that generate the highest overdraft fees.
Leaders fail their stockholders: Rick Wagoner leading General Motors into bankruptcy, Richard Fuld leading Lehman Brothers into oblivion, and Ed Lampert taking the retail icon Sears into irrelevancy.
Most perniciously, leaders fail their employees: Stan O’Neal taking the venerable Merrill Lynch over a cliff, costing thousands of jobs; Carly Fiorina, Mark Hurd, and, most recently, Meg Whitman doing round after round of layoffs at Hewlett-Packard; and, except for Southwest Airlines, airline leaders slashing employees’ wages, cutting the number of workers, and eviscerating employee pensions as the companies follow one another into restructurings.
This is but a very small sample drawn from a huge, almost unimaginably vast, list of leadership catastrophes.
How can this be—all this failure—after the thousands of leadership books, talks, blogs, classes, and leadership-development programs seeking to make leaders more effective? How can this be, after more than a century of research seeking to figure out how to select better leaders? I’m going to tell you part of the story of how this can be and, more important, why things aren’t getting better and what might be done to make some improvements.
But first I need to be clear: This is not a book describing the manifest and many failures of leaders. It is a book to help you understand some of the causes of those failures.
There are two ways to understand the many leadership failures that fill the daily news. One is what might be called the “bad apple” theory. This approach argues that organizations have done a poor job of selecting the right people for leadership roles, schools have failed to instill ethical leadership behaviors in their students, and some leaders themselves have developed the wrong values. Although I would not for a minute deny the plausibility of all of this, the bad apple explanation not only fails to make sense of the pervasiveness of the problem, but it also offers an explanation that would never be used in other contexts.
For instance, when General Motors recalled millions of cars in 2014 because of a problem with the ignition system such that when a key was accidentally jostled, the engine shut off, also cutting off the electrical power used to deploy air bags in accidents, observers correctly attributed this decades-old issue and its cover-up not just to the fifteen GM employees who were fired but to the company’s culture.1 No reasonable person would accept that a few bad actors on their own accounted for the initial problem and its fallout, events that unfolded over more than a decade. After all, this is the same company that almost fifty years earlier had produced the unsafe Corvair model and then hounded Ralph Nader when he had the temerity to call attention to that car’s miserable safety record.2
There is a second way to understand the many leadership failures that fill the news: to explore the systemic processes that produce leaders who often behave differently from what most people might like or expect. Such processes include the social psychology that makes the actual traits and behaviors that cause leaders to be successful in their careers and attain senior-level positions quite different from the qualities we hear about or might desire in leaders. And such processes also include the way we talk about—tell stories about—leaders and leadership, how we measure or fail to measure workplace conditions, and even how we teach leadership. We often measure (or fail to measure) conditions, tell heroic leadership tales, and use simplistic methods of understanding behavior in ways that becloud effective diagnosis and, as a consequence, forestall actions that might make things better.
I adopt this second approach. My objective is to help you understand why these leadership failures continue to occur with unacceptable frequency, to understand the systemic and psychological processes that produce what we observe every day in the world, in spite of all the leadership-development efforts, training programs, books, TED talks, and so forth. Once we understand some of the underlying causes of what we see occurring inside company workplaces, we have a better chance of making effective changes.
This book originated with an observation, followed by a conclusion, and finally an insight. The observation: on the one hand, there is an ever-growing, enormous leadership industry consisting of an almost limitless number of books, articles, speeches, workshops, blogs, conferences, training sessions, and corporate leadership-development efforts, activities that have existed for decades. Over that time, a largely unchanging, sometimes research-based set of recommendations for how to improve group and organizational performance emerged. The recommendations include, but are not limited to, that leaders inspire trust, be authentic, tell the truth, serve others (particularly those who work for and with them), be modest and self-effacing, exhibit empathic understanding and emotional intelligence, and other similar seemingly sensible nostrums. And on the other hand, there sits ample, even overwhelming evidence of workplaces filled with disengaged, dissatisfied employees who do not trust their leaders and whose oft-expressed number one desire is to leave their current employer. What’s the upshot? Not only is the world filled with dysfunctional workplaces, but leaders themselves are not doing so well, as they confront shorter job tenures and an ever-higher probability of suffering career derailments and getting fired.
My conclusion that follows from these two sets of facts: The leadership industry has failed. Good intentions notwithstanding, there is precious little evidence that any of these recommendations have had a positive impact. Indeed, many prescriptions for leaders are often more problematic and invalid than generally acknowledged. And as a consequence of all this failure, both workplaces and many individual leaders are in bad shape. Even worse, there are few to no signs that things are getting any better.
Others share my conclusion. Two consulting psychologists surveying the leadership landscape concluded that “there is scarcely any evidence that all this spending . . . is producing better leaders.”3 Barbara Kellerman, a lecturer on leadership at Harvard’s Kennedy School and the founder of the Center for Public Leadership, agrees. She recently wrote that the leadership industry “has failed over its roughly forty-year history to in any major, meaningful, measurable way improve the human condition” and that “the rise of leadership as an object of our collective fascination has coincided precisely with the decline of leadership in our collective estimation.”4
For a while I thought this paradox/predicament was just an interesting and possibly coincidental discontinuity between a large set of feel-good leadership activities on the one hand and too many toxic workplaces and disrupted careers on the other. But then came the insight: It is not just that all the efforts to develop better leaders, decades of such effort notwithstanding, have failed to make things appreciably better. I realized that much of what was and is going on almost certainly, although sometimes inadvertently and unintentionally, makes things much worse. There are ways to remedy all of this, but the solutions will not be easy or readily implemented, for reasons I will make clear.
If one cares about the enormous psychological and even physical toll exacted on employees from bullying, abusive bosses and work environments filled with multiple sources of stress, if one is at all sensitive to the human costs incurred as leaders flame out and lose their jobs—cares and concerns that I and, I suspect, many others share—then the continuing failure of the leadership industry in all of its forms and activities to make things better needs to be both explained and remedied. This book represents my best efforts to accomplish that task.
Here’s the plan. In this introductory chapter, I lay out evidence demonstrating four things: (1) the leadership industry is large and prominent, but, notwithstanding its magnitude and reach, (2) workplaces in the United States and around the world are, for the most part (as there are obviously exceptional places on best-places-to-work lists), filled with dissatisfied, disengaged employees who do not trust their leaders; (3) leaders at all levels lose their jobs at an increasingly fast pace, in part because they are unprepared for the realities of organizational life, and thus, (4) the leadership industry has failed and continues to fail in its task of producing leaders who are effective and successful, and it has even failed to produce sufficient talent to fill leadership vacancies.
I also suggest some reasons for the failures. One big problem is that much leadership training and development has become too much a form of lay preaching, telling people inspiring stories about heroic leaders and exceptional organizations and, in the process, making those who hear the stories feel good and temporarily uplifted while not changing much of what happens at many workplaces. In chapter 1, I explain why inspiration is a very poor foundation on which to build substantive change, and why and how the leadership tales we hear, stories that often have only modest amounts of validity, routinely make things worse, and possibly much worse.
Then in the ensuing chapters I examine some, although certainly not all, of the most commonly recommended traits and behaviors for leaders—modesty in chapter 2, authenticity in chapter 3, telling the truth in chapter 4, being trusted in chapter 5, taking care of others in chapter 6. These are all wonderful qualities, and if leaders consistently displayed them, workplaces and the employees who fill them would undoubtedly be doing better. But in each instance, I show first that few leaders, even some of the most prominent and successful, exhibit those qualities or do these recommended things. Then I lay out the evidence for and logic of why sometimes doing the opposite of what has been prescribed makes sense, at least for leaders seeking to advance their own careers. And this fact is at the core of the argument—that the qualities we actually select for and reward in most workplaces are precisely the ones that are unlikely to produce leaders who are good for employees or, for that matter, for long-term organizational performance.
Chapter 7 draws one important lesson from all this evidence: first, you need to take care of yourself. Although it might be cathartic to bemoan the evidence that positive leadership qualities often go unrecognized and unrewarded while their opposite produces career advancement and wealth, such moralizing changes nothing about organizational decision-making and also does little to help you in your own career challenges. Furthermore, the pursuit of individual self-interest just might be, as virtually all economics writing and theory since the time of Adam Smith teaches, good not just for you but also generally beneficial for the social systems including the work organizations in which you live. The alternative—hoping for some beneficent, godlike parental figure to look out for and take care of you at your place of employment—seems like a risky bet at best.
Chapter 8 concludes the book by developing a simple but important message: to change the world of work and leadership, we need to get beyond the half truths and self-serving stories that are so prominent today. Throughout each of the chapters, including this introduction, I offer recommendations and suggestions about what leaders and, for that matter, others might do to fix the problems discussed. But I am, above all, a realist. If these recommendations were comfortable and easily implemented, they already would have been.
My purpose is straightforward. Rather than giving you yet one more book to reassure you and make you feel good, while nothing changes in most workplaces and meanwhile you unknowingly cruise to a career disaster, perhaps it is time to muster some evidence about what is really going on with leaders and leadership and why. Even if such insight does not motivate you to change things, at least it will leave you much better equipped to understand the realities of day-to-day organizational life, and therefore better able to cope with them. So let’s proceed to dissect the essence of the leadership endeavor—that large set of activities that have mostly failed to help either workplaces or leaders themselves.
“Leadership,” is a popular term, and the set of activities focused on leadership are enormous. When I searched for the term “leadership” on Google Scholar, a search engine that accesses scientific research literature, I found 2,640,000 entries. Searching on Google itself revealed 148 million links to the term. On Amazon, entering the term “leadership” produced 117,000 entries.*
The word “leadership” is prominent in part because many people, both scholars and practitioners, view leadership as a construct important if not fundamental to explaining business and organizational performance. This unequivocal belief in the importance of leadership persists, even if the scientific evidence on this point is much more mixed.5 The late business school professor James Meindl referred to this emphasis on leadership as an explanation for organizational outcomes as the “romance of leadership.” He and his colleagues noted that “the social construction of organizational realities has elevated the concept of leadership to a lofty status and level of significance. Such realities emphasize leadership, and the concept has thereby gained a brilliance that exceeds the limits of normal scientific inquiry.”6 Meindl and his colleagues showed that the proportion of mentions of leadership in the popular press was positively related to economic performance—there were more mentions and studies of leadership when economic times were good. Examining the variation in the use of the term “leadership” across industries and individual companies, Meindl once again observed a positive relationship between mentions of leadership and performance. Meindl’s conclusion was that the construct of leadership was invented to account for unusually good—or unusually bad—performance as a way of creating a relatively simplified account of the world that made personal control seem possible. In other words, if things aren’t going well, just scapegoat the leader and bring in a replacement.
If “leadership” is an important term and a prominent way of apprehending the world, we should find it scarcely surprising that the institutions of higher education, seeking both applicants and donations, would emphasize the development of leadership skills in their students. And this is precisely the case. Universities frequently claim that they develop leadership capabilities, a set of skills so apparently sought-after and desirable that virtually all business schools, many other professional schools, and numerous undergraduate colleges and universities make developing leaders a prominent part of their mission statements. For instance, Harvard Business School’s mission is to “educate leaders who will make a difference in the world.” Wake Forest University’s mission statement includes the phrase “providing students an example of the world they will be called upon to lead.” A study in the McKinsey Quarterly notes, “Colleges and universities offer hundreds of degree courses on leadership.”7 Meanwhile, leadership centers proliferate in colleges of all sizes and orientations, in part to organize leadership-development activities and in part to serve as a focus for fund-raising.
Another measure of the leadership industry’s girth is the amount of time and money it consumes. Kennedy School lecturer Barbara Kellerman estimated that about $50 billion is spent on corporate training and development annually.8 The American Society for Training and Development’s (ATSD) 2012 state of the industry report estimated that $156.2 billion was spent on employee learning and development during 2011. Of course, not all training and development is leadership training; some training focuses on technical skills, total quality management, or various technical processes and procedures. Nonetheless, according to ASTD, managerial and supervisory content constituted some 12.6 percent of the total amount spent, which would mean that almost $20 billion was spent on leadership education and development.9 Three McKinsey consultants estimated that U.S. companies spend about $14 billion annually on leadership development, an amount echoed by other estimates.10
Regardless of the time and money spent on leadership, the situation in workplaces, not just in the United States but around the world, is dire, with disengaged, disaffected, and dissatisfied employees everywhere. Here are a few representative examples to help make the case.
A few years ago, management professor (and Stanford colleague and occasional coauthor) Robert Sutton wrote a book entitled The No Asshole Rule.11 The book became a bestseller all over the world because it touched a chord. People told Sutton about how they would buy copies to place on their boss’s desk (anonymously, of course). People also purchased the book for themselves to make sense of the abusive work environments that so many faced and to learn what to do to cope with harmful work situations. After the book appeared, Sutton received numerous e-mails describing, sometimes in heartrending detail, the slights, bullying, and ill treatment heaped on all too many employees in contemporary workplaces. One way to read the market’s positive reaction to Sutton’s book and the many personal anecdotes he received is that the so-called leaders whom many people work for are either abusive bullies or just out of touch with their subordinates.
And indeed, systematic data on workplace bullying report widespread verbal abuse, shouting, berating others, and the general creation of a climate of intimidation. One study of part-time, more mature students at Staffordshire University in the United Kingdom found that half of the sample reported having been bullied at some point during their careers.12 Another study of 1,100 employees in the National Health Service in Great Britain reported that some 38 percent of employees had experienced one or more incidences of workplace bullying in just the previous year.13 A study of nurses working in the National Health Service found that 44 percent of the nurses had experienced bullying in the previous twelve months.14 Two management professors reported that 10 percent of employees in the United States said they witnessed incivility daily in their workplaces, and 20 percent of the people surveyed noted that they were targets of workplace incivility at least once a week.15
There are consequences for both employees and their employers from people working in abusive environments for bullying, difficult leaders. Employees experience stress and depression, with adverse effects on both their physical and mental health. And “because of their experiences of workplace incivility, employees decrease work effort, time on the job, productivity, and performance” and are also more likely to quit.16
Employees, confronted with harsh work environments and bad leaders, are not surprisingly dissatisfied with their jobs. According to a national survey conducted by the Nielsen Company for the Conference Board, fewer than half of employees (47.2 percent) reported being satisfied with their jobs. The survey, which began in 1987, shows a striking decline in job satisfaction, from 61.1 percent in 1987 to 47.2 percent some twenty-five years later. Moreover, except for a few upticks during recoveries from recessions, the decline in job satisfaction has been consistent and steady.17
Another study of job satisfaction, conducted by Right Management in 2012 in the United States and Canada, reported that only 19 percent of people said they were satisfied with their job, with two-thirds of the respondents saying they were not happy at work. Susan Adams, a writer for Forbes magazine, reported on a survey conducted by Mercer, the human resource consulting firm. Mercer surveyed some thirty thousand employees worldwide and reported that between 28 percent and 56 percent of employees wanted to leave their jobs.18
Maybe job dissatisfaction is not your favorite indicator of workplace health. Consider, then, the data on employee engagement. The Gallup Organization, drawing its conclusions based on extensive surveying, reported in 2012 that only 30 percent of the U.S. workforce was engaged and inspired at work, with 20 percent of people reporting that they were actively disengaged, roaming the halls spreading discontent and seeking to undermine their employer.19 Things are even worse elsewhere. A Gallup study of 142 countries reported that only 13 percent of employees were engaged at work, with some 24 percent actively disengaged.20 Moreover, Gallup noted that although the economy had undergone substantial changes over the preceding decades, employee engagement levels remained almost completely unchanged. If for some reason you don’t like the Gallup research, virtually all of the numerous studies and reports regularly emanating from the various human resource consulting firms portray the workplace situation similarly, finding that the vast majority of employees are unhappy with their work, disengaged, and hoping for a different job.
Even more to the point, employees are unhappy with their leaders. Very, very unhappy. In the summer of 2012, Parade magazine released a poll of the American workforce. Fully 35 percent of U.S. employees reported that they would willingly forgo a substantial pay raise in exchange for seeing their direct supervisor fired.21
Taken all together, these data show that workplaces are often toxic environments that are bad for the people working in them, with negative consequences for employers, also. And there is absolutely no evidence that these conditions are substantially different in other countries or that things are getting better over time. So whatever other things the leadership research, writing, speaking, blogging, and programs are doing, making workplaces better is clearly not one of them.
Because the focus of much leadership research is precisely on demonstrating the connection between leadership and leader behavior on the one hand and outcomes such as job satisfaction, employee engagement, and turnover on the other, these data reveal the abject failure of the leadership enterprise. As one study commented, “Leadership style and employee satisfaction are hot questions of leadership theory research in recent years,”22 while another noted that “management and leadership are pivotal to staff satisfaction.”23 And a study of nurses noted that “quality nursing leadership is an important determinant in itself as a predictor of job satisfaction.”24 If, as scores of studies demonstrate, leadership affects engagement, satisfaction, and turnover, the sorry state of these workplace indicators provides compelling evidence of leadership failure.
Things are no better for the people in leadership roles. At breakfast, “Matt” tells a story of being fired first by one famous Silicon Valley firm and now another. Fortunately, Matt, a graduate from a very prestigious business school, an individual with fabulous strategic skills and business acumen, and a hard worker who is also a very nice human being, reports that he has found an even better job at yet another up-and-coming technology company.
As Matt jokes about failing upward, he relates how he lost his previous jobs, essentially by focusing on doing a great job technically but being largely oblivious to the political dynamics and particularly the requirement for managing his relationships with his bosses by doing whatever they wanted and flattering them endlessly.
Maybe Matt is just an anomaly, but I don’t think so. Another graduate of a very high status, highly selective business school related story after story of classmates who were fired within the first couple of years of graduating. As he told me, “Getting fired is something people from great academic programs don’t talk about, but it is more common than people think.” His estimate, based on the anecdotal experience of people in his personal network, was that between 10 and 20 percent of his talented and highly credentialed classmates left their jobs involuntarily within the first couple of years postgraduation. Again, the predominant cause of the firings: people believed in the world described to them in business school and in the prescriptions for leader behavior. Consequently, they were surprised by and completely unprepared for what they actually encountered at work. And when their leaders failed to live up to the expectations of these new hires, many of those folks let the leaders know, either directly or indirectly, how they were failing and how the subordinates were feeling, thereby completely sealing those subordinates’ fates.
It’s not just junior-level leaders who suffer career derailments. Senior leaders also face ever-tougher conditions that they seem to have difficulty navigating, as evidenced by decreasing lengths of tenures and the ever-growing incidence of getting fired. The Conference Board’s 2012 report on CEO succession documented a decline in CEO tenure since 2000.25 Research by the consulting firm Booz also showed declining tenure for CEOs today compared with the past, with a higher proportion of CEOs getting fired. In 2011, some 14 percent of CEOs of the largest 2,500 companies in the world were replaced, with the turnover rate being highest among the 250 largest companies as measured by market capitalization.26 And according to the annual Booz reports on CEO tenure and departures, the trends for shorter tenures and more frequent firings are evident not just in the United States but also around the world.
Experienced executive coaches tell the same story—of otherwise smart, motivated, interpersonally competent, hardworking people with great credentials who derail at unexpectedly high rates. One critical time for derailment is when, in their first jobs postgraduation, people move from positions where they can succeed mostly on the basis of their individual performance and into more interdependent roles where political skills become more important. The next critical time comes around twenty years later, when, if successful, people have reached very senior hierarchical levels where everyone around them is smart and accomplished. At that point, the differentiating factor is the ability to navigate increasingly politically charged environments that are peopled by those who mostly do not fulfill the leadership industry’s prescriptions.
If unhappy workplaces and short-tenured leaders suffering career derailments (a nice-enough euphemism) aren’t enough to convince you that things are bad, there are yet additional data that show that the profusion of leadership talks, workshops, books, blogs, courses, and trainings have failed to improve the state of leadership. Bill Gentry, a researcher at the Center for Creative Leadership, has summarized numerous research studies conducted and published over decades. Gentry concluded that “one of every two leaders and managers” is “estimated to be ineffective (that is, a disappointment, incompetent, a mis-hire, or a complete failure) in their current roles.”27 In other words, this leadership expert, working from extensive research, concluded that 50 percent of leaders were failures. Yet another review of the research literature on leadership concluded that “the base rate for managerial incompetence in any organization is quite high,”28 while still a different summary concluded that about half of the occupants of leadership positions are falling short.29
A McKinsey article noted that even though most executives identified leadership development as a high priority, “only 7 percent of senior managers polled by a U.K. business school think that their companies develop global leaders effectively, and around 30 percent of US companies admit that they have failed to exploit their international business opportunities fully because they lack enough leaders with the right capabilities.”30 An Accenture survey reported that only 8 percent of the executives felt their company was proficient in developing leaders, while a Corporate Leadership Council study found that “people management training improved productivity by only 2%.”31
The Institute for Corporate Productivity’s 2014 Critical Human Capital Issues Survey of some 1,367 respondents reported that even in the best, highest-performing companies, 66 percent of those companies reported that they were ineffective at developing leaders and that they were getting worse in this critical process. Not surprisingly, low-performing organizations were even more challenged, with 89 percent indicating that they were deficient in leadership development. The same study found that even in top companies, only 27 percent had successors ready to fill executive-level roles, as might be expected if companies are ineffective in developing leaders.32
A survey of more than fourteen thousand human resource professionals and line managers “found that only 26% of HR and 38% of leaders reported that the quality of leadership across their company was ‘excellent’ or ‘very good.’ Future prospects were even worse, with only 18% of HR and 32% of leaders reporting that their bench strength to meet future needs” was either strong or very strong.33
In 2012, the Center for Public Leadership at Harvard University’s Kennedy School reported that 69 percent of Americans believed that America had a leadership crisis—with the only good news being that in the prior year, some 77 percent of those surveyed had said the same thing.34 The Harris Poll reported that since 1996, “the percentage of people reporting at least some confidence in the leadership of government, corporations, and Wall Street has plummeted from around 90% to 60%.”35
And why shouldn’t respondents believe there is a leadership crisis and report declining confidence in leaders when, among other indicators, organizational malfeasance is incredibly common? Donald Palmer, a professor at the University of California, Davis, wrote, “Organizational wrongdoing is prevalent. Ronald Clement tracked firms listed among the Fortune 100 in 1999 and found that 40 percent had engaged in misconduct significant enough to be reported in the national media between 2000 and 2005.”36 Yes, that’s four out of ten of large firms engaging in significant wrongdoing in just five years; and note that this finding predates the economic meltdown and financial crisis that began in late 2007.
It’s not just that others, such as researchers or the public at large, give organizational leaders low marks; the leaders themselves do, too. Development Dimensions International (DDI), a forty-year-old company in the business of consulting on the attraction, hiring, and retention of talent, published a white paper on leadership based on a survey the company conducted. The report noted, “In multiple studies, including DDI’s 2011 Global Leadership Forecast, leaders are, by their own admission, falling short. . . . Over a period of many years, leaders have consistently given low marks to the quality of leadership in their organizations. . . . despite all of the effort and investment in leadership development—innovative new modalities, up-to-date content, business simulations, acceleration pools, 70/20/10 approaches, better diagnosis of strengths and areas for development—widespread improvement in leadership effectiveness remains elusive.”37 That is an understatement. DDI’s survey of almost 1,300 people around the world found that more than one-third did not consider their own manager to be effective in his or her job. More than half of the respondents, some 55 percent, reported that they had considered leaving a job because of their leader, and 39 percent said they had done so.
When lots of well-intentioned effort expended over decades produces nothing except ever-worse workplaces and more frequent career flameouts of leaders, there must be an explanation. Actually, there are many ways of understanding why leadership doesn’t seem to improve. Here are some of them, and we will explore others throughout this book.
One day at lunch, a thoughtful senior executive, knowing that I am writing a book about leadership and how bad things are in many workplaces, says, “All right, so tell me what to do to be a better leader.” My reply: “Tell me what criterion you want to measure ‘better leader’ by. Performance? And if so, over what time period and using what metrics? Holding on to your job as a leader? Obtaining the highest-possible salary for yourself? Moving on to a more prestigious position in another company as quickly as possible? Increasing employee engagement and reducing turnover?” The simple but important point: the oft-observed divergence in interests between individual leaders and the organizations they lead means that any prescription of what someone should do has to begin by both acknowledging the trade-offs and sorting through that person’s real priorities and the multiple, often poorly correlated measures of a leader’s outcomes.
This divergence in the interests between corporate leaders and the groups in which they are members appears prominently in the growing literature on sociobiology, an evolutionary approach to understanding social behavior that speaks to the discrepancy between what’s good for individuals and the groups in which they are members. Individuals maximize their own survival chances by acting selfishly to acquire, at all costs, the resources necessary for their survival. Group survival, however, often depends on individuals sacrificing their own well-being for that of the group, such as soldiers’ throwing themselves on hand grenades to save their colleagues’ lives, or parents forgoing food so their children can live. As one article in this theoretical tradition noted, “The problem is that for a social group to function as an adaptive unit, its members must do things for each other. Yet, these group-advantageous behaviors seldom maximize relative fitness [for a given individual] within the social group.”38
Social psychologists also have long acknowledged the inherent tension between the need for leaders to help groups function effectively, and the personal interests of group leaders to maximize the power differences they enjoy over others and hold on to and exploit for their own benefits.39 Leaders frequently focus, hopes and blandishments notwithstanding, primarily on their own careers and what’s good for them. Consider the following example:
When the technology entrepreneur Dick Costolo was recruited from Google to come to Twitter as chief operating officer, his first tweet as he prepared for his first day at his new job was: “First full day as Twitter COO tomorrow. Task #1: undermine the CEO, consolidate power.” Note that he didn’t say, “First full day, figure out what to do to make the company more successful.” That tweet, written on September 13, 2009, was taken by some as a joke, and maybe even intended that way. But the tweet was nothing if not prescient. In October 2010, barely thirteen months later, Costolo did take over as CEO from the then-CEO Evan Williams, a cofounder of the company. While Williams was gracious, issuing a statement saying, in part, “I am most satisfied while pushing product direction. Building things is my passion. . . . Starting today, I’ll be completely focused on product strategy,” few founders give up power voluntarily, and there is no evidence that Williams, who was soon gone from Twitter, was the rare exception.40
Was Costolo’s ascension to power, and for that matter the comings and goings of another company cofounder, Jack Dorsey, good for Twitter? Who knows? Twitter’s stock price has been stagnant. But there are many factors that might account for the company’s struggles and ongoing management shakeups, such as the 2014 resignation of its chief operating officer.41
Contrary to what many people seem to believe—and, moreover, one of the core foundations of much leadership thought—there is far from a complete correspondence between what is good for a company, or for that matter, a unit within that company, and what is good for the company’s or unit’s leader. In case you have been asleep during the last decade, plenty of CEOs and board members took their companies over a cliff even as those same CEOs left with enormous severance packages, and board members mostly kept their board seats and even obtained new ones.
The distinction between group and individual interests becomes evident in what the numerous studies and the inspiring leadership stories invariably focus on—mostly if not exclusively some measure of group or organizational performance, or the satisfaction and engagement of the people in the work unit. Leadership stories and much leadership research seldom explore the leader’s qualities, behaviors, and characteristics that affect the well-being of the leader, rather than the organization. Leader well-being includes outcomes such as job tenure, salary, and getting into a leadership role in the first place. This neglect of what’s good for the individual interests of leaders might be one reason so many recommendations have so little traction in the real world: while leadership research may not be that interested in leader (as opposed to group or organizational) well-being, leaders almost always are.
A second problem with the numerous recommendations about what leaders should do is that too many of them emphasize the causal relationships between various leader behaviors and work-unit outcomes, but show remarkably little concern with base rates, that is, the extent to which desirable, effective leader behaviors actually occur in the world and, furthermore, if they are as rare as they seem to be in spite of being widely recommended, why, and what to do about it. Here’s an analogy to help you understand why this distinction between prescriptions and actual implementation is important:
In 1847, Dr. Ignaz Semmelweis, a Hungarian physician, noticed something interesting. Mothers who delivered their babies in a Viennese maternity hospital died at a rate many times that of mothers who delivered their babies at home. Semmelweis came to the conclusion that the problem occurred because physicians went from one woman to the next without taking any sanitary precautions such as washing their hands, thereby spreading infection. After he introduced hand washing with a chlorine solution, mortality fell from an average of 10 percent to about 1.5 percent. Semmelweis was ostracized and ultimately fired for pushing people to implement the results of his discovery. But once Louis Pasteur developed the germ theory of disease, the idea that sanitary practices were important in health care became generally accepted.42
So far, so good. But, as much systematic evidence demonstrates, hundreds of years after the development of the germ theory of disease and its implications, sanitary practices in hospitals and doctors’ offices remain woefully deficient. A Center for Disease Control report noted that studies of adherence to hand-washing guidelines in health care settings averaged just 40 percent.43 After giving a tour of the Minneapolis Heart Institute to a group of directors from a medical device company, Dr. Robert Hauser, a noted cardiologist, asked the group to guess which of the things they had seen during the tour, which had included some amazingly advanced equipment, had made the most difference in patient outcomes. The answer: the signs posted on plain sheets of paper outside each room that said in large, bold letters, “Wash Your Hands.”
Note the medical profession’s response to this fact of the divergence between what is known about how better sanitary practices improve health outcomes and the incomplete implementation of that knowledge. In the first place, there are not many additional studies to demonstrate the well-established causal relationship between sanitary practices and disease—no point reiterating what people already know. Nor do health care organizations assume that, since everyone knows these facts, good practices must be automatically occurring, so measuring the frequency with which they are implemented is unimportant. And there aren’t lots of inspirational TED talks, blogs, or speeches about doctors who wash their hands.
Instead, health care policy makers and organizations do two important things: First, many sites where medical care is delivered now measure the extent of adherence to good sanitary practices, thereby establishing a base rate so that improvement can be tracked over time as different interventions are implemented. And second, the medical profession and other scholars study interventions that increase the rate of hand washing and the implementation of other germ-prevention strategies as they seek to understand why good practices do not get used.
Compare this example with the leadership industry, with its inattention to assessing the implementation of its recommendations and to understanding why so little has changed. The leadership industry is so obsessively focused on the normative—what leaders should do and how things ought to be—that it has largely ignored asking the fundamental question of what actually is true and going on and why. Unless and until leaders are measured for what they really do and for actual workplace conditions, and until these leaders are held accountable for improving both their own behavior and, as a consequence, workplace outcomes, nothing will change.
Numerous other problems help account for why there has been so little positive change in workplaces or careers. Here’s one of the more important: There are no “barriers to entry” into the leadership industry; no credentials, rigorous research, knowledge of the relevant scientific evidence, or anything else required to pass oneself off as a leadership expert. Anyone and everyone can write a book, be a leadership speaker or a blogger, offer consulting and advice, or start a leadership-development or consulting firm. And there are days when it seems that virtually everyone does.
Rich Moran, a former senior partner at Accenture and now the president of Menlo College, has commented that many of the people offering leadership advice have (a) either never held a leadership position, or (b) if they have, were notoriously unsuccessful in their leadership role, or (c) often promulgated leadership prescriptions almost completely inconsistent with their own behavior. In a similar vein, Robert Gandossy, formerly a very senior executive at the human resources consulting firm Hewitt who ran their Top Companies for Leaders research and ranking, noted that many of the people offering leadership coaching and advice were formerly compensation consultants. As he said, “There’s nothing wrong with compensation consulting, but I don’t see how providing advice on pay systems necessarily makes someone an expert on either leadership or leadership development.”
But it’s even worse. Not only do many of the leadership industry’s participants have no particular qualifications or training germane to their activities, but many also seem to possess little of the interest or intellectual curiosity that would cause them to do the work required to read and learn so as to build their expertise.
And as near as I can tell, there is not much of a connection between actually knowing something about leadership and being successful as a leadership guru. To take only one of countless examples that come to mind, one group seeking a leadership speaker for a conference told me they hired a particular speaker because, according to an inside source on the hiring committee, he was good-looking. This tale is completely consistent with the view that much of leadership education, even in academic classrooms, let alone inside companies and at those omnipresent conferences and conventions, reflects the fact that the goal is as much about delivering entertainment (“edu-tainment,” as one experienced consultant called it) as it is helping leaders or remediating workplace problems.
A related problem is that in part because of the backgrounds and qualifications, or lack thereof, of some practitioners, and also in part because of the normative focus and wishful thinking in general, conceptual confusion and imprecision abound in the leadership industry. The imprecision results in recommendations that are often incorrect and also so ambiguous as not to be implementable.
Consider the idea of charismatic or transformational leadership. Charisma seems to be a desirable trait. Charismatic political candidates such as Rick Perry of Texas, former president John Kennedy, and, of course, Barack Obama, have big advantages over less charismatic opponents. The early and enduring success of companies such as Southwest Airlines and Apple is frequently attributed to the charisma of their CEOs, Herb Kelleher and Steve Jobs respectively. Charismatic leadership is often argued to be a particularly effective form of leadership because it engages others’ emotions and deepens their connections to both the leader and the organization.44 Some studies show that charismatic leadership has profound transformational effects on followers. Followers of charismatic leadership display greater reverence, trust, and satisfaction with their leaders as well as a heightened sense of collective identification with their group.45
However, as nicely demonstrated in a devastating critique by Daan van Knippenberg and Sim Sitkin, two organizational behavior scholars, the study of charismatic leadership lacks a precise definition of the term and also an understanding of the psychological and behavioral mechanisms that presumably produce results from charisma. They go on to note that much of the research on charismatic leadership suffers a great deal of confusion between causes and their effects; they also note that there is a great deal of invalid measurement of the concept of charismatic leadership.46 One cannot build a science this way, and, more important, it is impossible to develop valid recommendations that leaders can implement given the sloppy thinking about leadership that is so much in vogue.
There are some ways for the leadership industry and its practitioners to improve their performance. These recommendations follow quite directly from the problems enumerated in this chapter.
One of the core principles coming out of the quality movement is that what gets inspected gets affected. Measurement focuses attention and, if nothing else, makes problems salient. The measurement of leadership improvement activities is pathetic. Much of this effort is simply not evaluated at all, as the HR consultant Robert Gandossy argues, and that includes a number of corporate- and university-sponsored leadership-development programs, executive coaching, and, except quite informally, the various books, blogs, and conferences that continue to proliferate.
To the extent there are evaluative measures, some of these merely ask about the amount of activity—the number of sessions, speakers, events, hours of training, number of attendees, and so forth, in other words, the resources expended or consumed on leadership training and development, not whether anything happened as a consequence. Or, in the case of books or speakers, measures of sales figures and revenues are examined, under the assumption that the market is good at separating the wheat from the chaff. We know this is not the case, as decades of leadership writing and speaking have produced no discernible betterment in either workplaces or leaders and their careers.
And then there are those ubiquitous “happy sheets” that people fill out to report on whether or not they enjoyed their experience at some conference, training session, or other event, or the reviews and recommendations that assess whether people liked some book or blog. As the Institute for Corporate Productivity noted in a report on global leadership development (GLD), in 2012 the number one way of assessing leadership programs was participants’ self-reported satisfaction, which the document appropriately referred to as “smiley-face” indicators of success.47
This should not be a surprise. Self-reported satisfaction with the experience is how most universities and conferences evaluate their activities. Indeed, students’ evaluation of teaching is incredibly common, with more than 99 percent of all business schools using student evaluations in some form. However, a recent review of the evidence concluded that there is a very small and statistically insignificant relationship between student evaluations and learning, and that “the more objectively learning is measured, the less likely it is to be related to the evaluations.”48 Another review also concluded that “teacher ratings and learning are not closely related” for many reasons that ought to give pause to anyone relying on such evaluations, including in cases of adult development.49 As J. Scott Armstrong of the University of Pennsylvania noted, “Learning implies change, and this can be a trying experience, especially if it involves important attitudes and behavior.”50 Because leadership development almost certainly involves engaging with important attitudes and behaviors if it is to be successful, a large body of empirical research conducted over decades suggests that student evaluations are more than unhelpful; instead, they are likely to change the behaviors of presenters in ways that make learning and personal growth less likely. That is one reason why Armstrong concluded that “teacher ratings are detrimental to students.”51
In 2013, participants’ self-reported happiness with their leadership-development experience was still ranked second in importance as a criterion of the experience’s success. The Institute for Corporate Productivity’s report noted that observable changes in the specific behaviors of participants had moved up in importance in evaluating GLD efforts. But engagement scores of the leaders’ direct reports or department ranked just sixth in importance and were used by only 36 percent of the companies responding to the survey.52
No wonder workplaces remain in such a bad state. Instead of evaluating the books, blogs, talks, events, and all the similar sorts of activities on whether they actually improve workplace functioning and well-being, most evaluations focus on whether those exposed to the various products of the leadership industry—the leadership industry’s “consumers” if you will—like them, and whether they are having a good time and are feeling good. When three McKinsey consultants sought to understand why leadership-development programs failed, one of the four causes they uncovered was the failure to measure results. They noted that companies paid only lip service to developing leadership skills and did not invest in measurement to track actual changes. They commented, “Too often, any evaluation of leadership development begins and ends with participant feedback.”53
But it’s even worse. Measuring the wrong thing is often worse than measuring nothing, because you do get what you measure. So if the assessments focus on how much people “enjoy” the experience—be that reading a book, watching a talk, or going to a training session—those same books, talks, and trainings will respond to those measurements by prioritizing the wrong outcomes: making participants feel good and giving them a good time. Simply stated, measuring entertainment value produces great entertainment, not change; measuring the wrong things crowds out assessing other, more relevant indicators such as improvements in workplaces. Improvement comes from employing measurements that are appropriate, those that are connected to the areas in which we seek improvement. In the case of leadership, that appropriate measurement would include assessing the frequency of desirable leader behaviors; actual workplace conditions such as engagement, satisfaction, and trust in leadership; and leaders’ careers—measures that are notable by their absence not only in use but even from much of the discussion of leadership-development activity.
Not only is the leadership industry unaccountable for the condition of workplaces, leaders aren’t either, at least in many places. Years ago, when Hewlett-Packard had a positive and strong organizational culture and senior leadership cared about that culture, people were held accountable for the results of anonymous employee surveys conducted throughout the company and reported on a work-unit basis. Some individuals lost promotion opportunities because even though their financial results were good, their survey results, which assessed employees’ engagement and trust in them as a leader, were not.
There are still companies like DaVita, a kidney dialysis provider, that measure adherence to values, and that care about those results. At DaVita, people actually get fired for behavior that is counter to the company’s culture and inconsistent with its focus on the importance of dialysis centers and the people who work in them. There are places like the privately owned software company SAS Institute, where the cofounder and CEO Jim Goodnight evaluates managers by their ability to attract and retain talent, and where people can lose their jobs if their units experience excessive voluntary turnover. But this commitment to workplace culture is the exception rather than the rule. Certainly there is lots of talk about the importance of culture and people, but there are not many actions consistent with such talk. More typical are the stories I hear all the time about companies in which the senior leadership, not liking the results of employee surveys measuring engagement or trust or satisfaction, simply decides to stop doing them. After all, as one CEO reportedly said, “If we’re not going to change things, why raise people’s expectations by asking them their opinions about aspects of the work culture that we really don’t care about.”
Measuring results, measuring leader behaviors, and assessing whether or not prescriptions get implemented would go a long way to both highlighting and then altering the current sad state of affairs in most workplaces. Without baseline measurements of leader and workplace conditions, it is simply impossible to understand what to do to make improvements.
This step requires expanding evaluations and measurement to incorporate not just unit performance and even customer or employee satisfaction but also what happens to leaders’ careers, including their jobs, their salaries, and their career progress. And when we see, as we will frequently throughout this book, the different effects of a leader’s traits or behaviors on a company’s performance versus his or her own success, we will see the need to understand why there is the divergence in interests and how to make things work better for both sides.
When medicine began its quest to become an evidence-based science, with a concomitant improvement in treatment outcomes and the rate of medical progress, the medical profession worked—and still works—assiduously to promulgate professional standards of practice. Such standards include prioritizing systematic evidence over stories or examples, basing practice to the greatest extent possible on the best evidence, and, most important, seeking to ensure that practitioners are knowledgeable and have at least some requirement to keep up with the progress of medical science. That’s why medical schools were founded in the first place and why people seeking to practice medicine must pass some licensing requirements and engage in continuing education in order to ply their trade.
It is hard to believe that because someone happened, in a particular instance, to perform some effective medical treatment, that that individual would then go all over the world telling people how to practice medicine absent any formal training. But precisely that happens all the time in the case of leadership, where unsubstantiated accounts of heroic acts of leadership seemingly qualify people to instruct others in how to be a leader.
This is not to say that there aren’t numerous well-trained and highly experienced people doing leadership research and education—of course there are. But as noted already, the field has no barriers to entry and the relationship between scientific rigor and success in the leadership industry is somewhere between small and negative.
We have seen in this chapter that the leadership industry presumes that if people follow all its feel-good prescriptions, unit performance and employee morale will be higher and that leaders, in turn, will be more successful. But neither of these premises is correct. Sometimes—not always, but some of the time—doing precisely the opposite of what the leadership industry prescribes produces better outcomes. What’s more, doing the opposite of what the leadership industry advocates is sometimes a much better, more reliable path to individual success. There are, in this domain as in many others, trade-offs, and the frequently unacknowledged trade-off between what is good for the individual and good for the group needs to be front and center in understanding why there is so much leadership failure over such a long time.
Before taking on some of the most prominent prescriptions and showing how they do not describe many leaders and that they often don’t work, one other issue must be addressed: how the lay preaching, storytelling, inspirational, and aspirational character so common in leadership makes things worse in numerous ways. That is the topic of the next chapter.