In my last article, we discussed the importance of reproducing organizational leaders through dedicated initiatives owned by the CEO or CLO (Chief Leadership Officer). In this article, I’d like to touch a bit more on that idea of reproducing successful employees and perpetuating your business. It is essential to understand why your business exists in order to continue its success in the future.
The Evolution of Leadership
Everyone is familiar with evolution, though it can be difficult to observe. It is often only recognized upon extinction. For organizations to survive, they must evolve. Survival does not occur because organisms live forever. They live because they reproduce a stronger next generation.
Business leadership has remained stagnant for the last 100 to 150 years. However, in the last 20 years, there has been a revolutionary change in followership. The evolution of leadership has not kept pace with the demands of followers. According to Smarp.com:
- Employee engagement increases productivity. Engaged employees outperform their unengaged peers. Companies with high employee engagement are 21% more profitable.
- Employee engagement improves morale and reduces absenteeism. A Gallup study shows that highly engaged workplaces saw 41% lower absenteeism.
- Low employee engagement is costly! It costs businesses $4,129 on average to hire new talent, and around $986 to onboard them. That means you lose over $5,000 each time an employee quits.
High turnover rates and disengaged employees are just two symptoms of leaders’ failure to evolve:
- According to Gallup, nearly 70% of employees are not engaged.
- BambooHR.com found that 31% of employees quit a job within six months of being hired.
- WillisTowersWatson.com found that nearly 50% of companies worldwide have trouble retaining their best, most productive people.
To combat many of these issues, the 2020s must become known as the leadership decade—the next natural step of leadership evolution. To start the process, leaders must first confront a question.
Why Do You Exist?
The first step in understanding the leadership decade is for leaders to think deeply about why their organizations exist. This strategic thinking should be focused on three levels.
The first is practical: Businesses exist to create profit and shareholder value. In a market economy, businesses survive by being profitable. For this reason, business leaders must focus on profitability and long-term shareholder value.
The second is a bit more conceptual. Businesses exist to provide some sort of “intrinsic value.” How does your organization contribute to the greater good?
The third is the one I want to focus on. Your organization exists because, strategically, the business perpetuates itself. Perpetuate means “to preserve from oblivion or extinction.”
For anything to survive, they must focus on growth, sustaining themselves, and reproduction. Basically, organizations exist to perpetuate themselves.
Every business understands that to survive and grow, they must reproduce methods that drive revenue and profit. Strategic plans address this. Hours will be spent on revenue development, profit maximization, market penetration, sales development, etc. Business leaders do this to reproduce successful results and perpetuate the business.
In short, all business leaders understand that they exist because they reproduce positive results. Failure to produce positive results drives businesses to bankruptcy—extinction.
The Leadership Decade — The Missing Link
Many organizations fail to evolve in one critical area—leadership development. This is not to say organizations have not spent time or money on leadership development—it’s a multibillion-dollar industry.
Many of these expenditures produce few of the desired results. I use the word expenditure purposefully; too often, leadership development is viewed as an expense and treated as such.
The desired result is growing and reproducing leaders to perpetuate and improve the business. Not only does this perpetuate businesses—it drives tremendous shareholder value. There is nothing a business can do to achieve a greater ROI.
Many organizations adopt a “check-the-box” approach; rarely does leadership development rise to the same strategic level as other areas of the business. Reproducing great customer service, sales results, employee satisfaction, revenue, and profits is well-documented in strategic plans. Reproducing leaders tends to fall to a subpoint, if mentioned at all.
A critical realization for today’s leader is to understand the importance of growing and reproducing leaders at all levels—from top to bottom, across all generations.
Adapted from our best-selling book, The Leadership Decade: A Playbook for an Extraordinary Era. If you’d like to purchase a copy, please visit s21.us/tldbook for a hardback book or s21.us/tldebook for an ebook. For even more information, check out theleadershipdecade.com.