Inbound Leadership Is Human
Inbound leadership addresses these challenges head-on, because it is a human-to-human approach.
Inbound leadership addresses many of the root problems we see in other approaches to leadership that have gotten us to this point. Rather than solely focusing on short-term results, inbound leaders focus on their people and the long-term growth of their organization.
Inbound leaders build trust, earn respect, and ensure their people are treated as people.
The time to discuss a new approach to leading is now. If we do not work on this issue, we will have generations of workers who will never know what it feels like to be fulfilled by the work they do. They will always look at management and leadership with disdain.
If we choose now -- today -- as our time to teach leaders that there is another way -- a way that includes their people, on a human level, a way that focuses on their team’s successes -- we may be able to turn the tides and re-engage the workforce.
HubSpot’s CTO and cofounder, Dharmesh Shah, recently said:
“Success is making those who believe in you look brilliant.”
That is how inbound leaders talk.
That is how we make this shift from a “Do this, because I’m the boss!” mentality to a “How can I help?” mentality.
As I said at the start of this, making this shift in your thinking isn’t easy. It will take time and training, but if you take the ideas laid out here and bring them back to your organization or team, you will set yourself, your people, and your organization up for real success.
How Leadership Crossed Over to the Dark Side
How did we get to a place where only a third of the workforce is engaged at work? Where only 15% of employees strongly agree that the leadership of their organization makes them enthusiastic about the future?
Let’s take a trip in our time machine to August 5, 1981.
Photo Credit: George State University
On this day in history, leaders realized they could fix their bottom line by conducting layoffs when then-President Ronald Reagan fired 11,000 air traffic controllers who were involved in a labor dispute. It was a headline that created a cultural moment, where employees stopped feeling safe and part of the team.
Instead, the message was, “Members of the American workforce are expendable resources whose only purpose is to create value for stockholders.”
This isn’t to say that employees were ever truly the prime stakeholder to an organization, but this was the first time that layoffs were used as a financial tool so publicly and at such a large scale.
That said, there has always been a rift of some sort between management and labor, with management doing whatever it needed to increase profits, and labor working to increase workplace safety, fair wages, and benefits.
So, when layoffs became a norm, the divide between the two groups only deepened.
Just think about your parents or grandparents.
How many of them worked for one maybe two companies their entire life and at age 55 or 65, they retired, got their gold watch, and collected their pension? That was very common for previous generations.
Now, how likely are employees today to have that happen? (There’s a good chance you’ve already worked at more than two companies, yourself.) Also, how likely are employees to want to have that happen today?
Leadership Case Study: Jack Welch of General Electric
During this time period is when one of America's most well-known CEOs took the reins at General Electric, Jack Welch. To this day, many speak of Welch as an iconic leader who elevated GE to new heights and levels of success with his management system.
What Was the Jack Welch Approach?
Under Welch, GE would rank all of the people and let the bottom 10% go as a practice in continuous improvement.
In essence, your underperformers would leave and the remaining 90% of your team would work as hard as they could to ensure they didn’t end up in the bottom 10%. This is a very simplified view of this.
Many companies embraced this practice, and Welch was heralded as a performance management genius -- under his system, a company would keep only people who were performing, which would mean a higher return shareholders.
Today there are still organizations that follow this performance management philosophy. They see it as a way to motivate their teams to always be improving.
While this system may drive some positive performance outcomes, the second and third order effects can adversely affect a business.
Where This Approach Goes off the Rails
While competition is a good thing, when individual performance is life or death, people naturally take care of themselves. They become less helpful. They focus only on the immediate tasks in front of them and stop looking at the bigger picture.
And when management and leadership begin to act this way, they stop caring about their people and start thinking of their staff as an expendable, faceless resource to help them hit their revenue goals to ensure they are in the top X%.
This is when your people will disengage -- when they are no longer valued.
This top-down, authoritative leadership approach may yield short-term gains, but what are the long-term implications?
Leadership Case Study: Jim Sinegal of Costco
At the same time Jack Welch leading by fear of the ax at GE, Jim Sinegal was at the helm of Costco. Unlike GE during the time of Welch, Sinegal focused on people, rather than shareholder value.
Sinegal ran the organization according to four core values, which they codified into the Code of Ethics:
"If we do these four things throughout our organization, then we will achieve our ultimate goal, which is to reward our shareholders."
Costco’s messaging here is clear -- if you take care of the people who make it possible to do business (employees and suppliers) and the folks who buy from you (customers) in accordance with the law, you will deliver for your shareholders.
Under Sinegal, Costco paid their people a fair wage, offered benefits for hourly workers, and built a culture where people wanted to work.
They took pride in being a Costco employee. The organization placed a higher value on their employees as a way to drive greater value for their shareholders. The employees and suppliers were the focus, not just the dollars.
This approach stands in stark contrast to the GE model, which eliminated employees under the banner of “continuous improvement,” in order to maximize shareholder value.
Did Costco's People-First Approach Actually Reward Shareholders?
The results speak for themselves.
If you had invested $1,000 in both GE and COSTCO in January of 1986 and kept it in the market until October of 2013, you would have made $600,000 in GE and $1,200,000 in Costco. Throughout this period of time, GE’s stock was more volatile, while Costco was on a steady up and to the right path.