Three Ways To Spot A Leadership Problem
Despite your seat at the table as an investor or board member, you have a rather limited view into the workings of your growth company. Sure, you meet regularly with the executive team, review its reports, and crunch through its numbers – but you have virtually no idea what it’s like to work with them, or for them, on a daily basis.
And that’s a big problem – because their ability to lead is crucial to the results you want to achieve.
Leadership problems cost money and time, two of the most valuable commodities of a growth company. They drain productivity, sow confusion about priorities, and can result in unanticipated attrition and the accompanying recruiting, hiring and training costs. They can also stall momentum allowing a company’s competitors to catch up or even pass it.
Since the chances are slim that a senior executive will come to you and admit a leadership issue, how can you tell if your company has a problem with the people at the helm?
Here are three things to look for:
1. Board Meeting Cues. At the next board or executive meeting, take a look around. See if you notice sidelong glances among the leadership team, awkward silences, or if one or more of the executives doesn’t say much. Take note if one executive makes a presentation only to be interrupted or corrected by another. Observe whether executives regularly defer to the CEO or if they seem overly protective of the organizations they lead instead of prioritizing company wellbeing.
If you feel uncomfortable around the executive team or notice that they feel uncomfortable with each other, it’s a sign something is wrong. These cues can indicate a lack of trust or conflict. And because they set the tone for the organization, this subtle behavior will quickly trickle down into the workplace and wreak all kinds of “below the surface” havoc – if it hasn’t already.
Trust your intuition. If something feels wrong, chances are that it is.
2. Leaking Employee Discontent. Check social media. Check glassdoor.com. If you see grumblings beyond what you consider normal, it means people are spending their time talking about the company’s problems instead of solving them. It also means they aren’t focused on strategic plans, sales goals, product roadmaps, or other important daily business. They are focused on the company drama.
Sometimes it’s easy to pinpoint the source of the discontent, such as the departure of a key employee or a mass exodus. But it could be something more pervasive, such as the lack of a compelling vision. Surprisingly, a company focused on making money can be a far less motivating place for people than one struggling for survival as in the early startup phase.
People want to be inspired. They want their work to have meaning. Without a purpose to guide them, employees can turn to each other, finding the energy they are looking for in expressing negativity toward the company.
3. No Clear Strategy Or Direction. While it’s tempting to try to please all stakeholders, it can paralyze a company to ask employees to do too many things at once. Good leaders make the hard call of choosing a limited number of clear goals. They should be able to name them, and justify them, whenever you ask. So should their employees.
One company I advised had a framed poster on the wall as you stepped off the elevator stating the 25 goals for the year. Yet in talking with the employees, none could name one of those goals – and when I referenced the poster, most didn’t even remember it was there. In contrast, another company I advised had one goal for the year and communicated it to everyone in the organization. You can argue whether a list of one is too limited – but not with the results in this case. Guess which company met its goal?
At the end of the day, you’ve already invested in a leader – and that person is standing between you and success. You can’t afford the delays or missteps of that executive’s steep learning curve – or the cost of finding a replacement if everything unravels. What you can do is watch for the signs of trouble, flag them early, and get your executive the counsel they need to improve their leadership skills and meet your expectations.