Leaders Circle Of Influence

Wednesday 3 November, 2004

by Greg Phillips

A national survey of employees found that 85 percent of those interviewed said they could work harder in their job. More than half claimed they could double their effectiveness “if they wanted to”. Why is it that some people consistently do a great job while others are inconsistent or are consistently poor performers?

I once read the words of the president of Hyatt Hotels, who said, “If there is anything I have learned in my 27 years in the service industry, it is this: 99 percent of all employees want to do a good job. How they perform is simply a reflection of the one for whom they work.” I agree with him. I’m not absolutely sure if it’s 99 percent however my experience across many organisations leads me to conclude that certainly the majority of employees want to do a good job.

In a survey completed by Lee Hecht Harrison and reported in the Australian Financial Review it was found that 21 percent of employees surveyed had been thinking about starting their own business while still in their jobs. It takes a great deal of personal motivation to be self-employed and yet often it seems that organisations are not utilising the true motivational level of employees.

Jane Caro, in an article published in the Australian Financial Review writes, “Recently a friend of mine was at lunch with a senior manager from a major company. After their lunch was interrupted by a flurry of phone calls, my friend asked what the crisis was. ‘No crisis’, said the manager. ‘We’ve got a management meeting this arvo and my staff get a bit nervous. Unnecessarily, of course. We won’t make any decisions at the meeting. That’s the best way to survive these days.’ What a sad indictment of modern business. Surely any manager worth his or her salt spends most of their day making decisions. Isn’t that what managers are paid to do? Not any more apparently.”

Perhaps those of us who are leaders need to take a look at ourselves. A leaders ‘circle of influence’ is dramatic. The performance multiplying effect of a leader is like compound interest, which Albert Einstein said is the most powerful force in the universe! So if an organisation wishes to improve, it needs to commence with supervisors, managers etc. – those who have influence over others. That is not to say that subordinate employees shouldn’t be upskilled – they should. Skilled leaders however will effect each workday multiplied by the number of subordinate employees.

“What we’ve discovered, and rediscovered, is that leadership isn’t the private reserve of a few charismatic men and women. It’s a process ordinary people use when they’re bringing forth the best from themselves and others. Liberate the leader in everyone, and extraordinary things happen.”
– The Leadership Challenge: How to Keep Getting Extraordinary Things Done in Organisations,
– James Kouzes and Barry Posner.

I have asked many executives what difference great leaders make to their business as opposed to good leaders or indeed poor leaders. Regardless of whether these executives have been from manufacturing, retail, wholesale, finance, insurance or real estate, their response has always been that skilled leaders have a dramatic influence on sales and productivity. I have been given estimates of between 30% & 200% for the difference made by a great leader compared to a good leader and estimates of between 50% & 400% for the difference made by a great leader compared to a poor leader.

Let’s look at a conservative example. We will assume that an organisation on average has good leaders given that some will be poor and some will be great. Our example will be of one leader who has ten subordinate staff. A conservative improvement percentage between a leader being good and great would be 20%.

Example 1

• 10 people @ 20% = productivity improvement of 2 extra people or
  
• 10 people @ 38 hrs p.w. = 380 x 20% = 76 extra hours of productivity or
  
• You could save the salary & on-costs of the people not needed or
  
• How about ten people x 20% lift in individual sales – would that help your business?

And that’s assuming there are no further reports to the 10 in our example. It doesn’t stop there though if the ten people in our example have others reporting to them. Effective leadership has a down-line effect. Let’s go just one step further and look at an example where there are five reports to each of our ten people. To stay conservative we’ll use an example of only a 10% percent improvement for this level.

Example 2

• 50 people @ 10% = productivity improvement of 5 extra people or
  
• 50 people @ 38 hrs p.w. = 1,900 x 10% = 190 extra hours of productivity or
  
• You could save the salary & on-costs of the people not needed or
  
• How about 50 people x 10% lift in individual sales – what would that do for your business?

There are many benefits other than things like productivity, cost reduction and sales improvement that come with great leadership. Both leaders and subordinate personnel are more satisfied with their employment resulting in:

1. Happy motivated staff
   
2. Loyal staff
   
3. Reduced staff turnover/attrition
   
4. Effective and sustainable management succession
   
5. Reduced sick leave
   
6. Improved profit margins

“The process of becoming a leader is the same as the process of becoming a highly effective human being. Leadership development is ultimately personal development. Leadership ultimately shows itself in what we do ‘out there’. But it starts ‘in here’. It’s something that we are, which then drives what we do.”
– Growing the Distance, Jim Clemmer

Source:ceoonline.com