Awful leadership costs you $145,00 per day

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Bad leadership is everywhere. If you’ve ever read this blog even once, you know most of my takes on all that — but here’s a quick refresher.

Those are the “business model failings” of bad leadership. At the individual management level, it’s much more complicated — but to quickly break it down?

As a result of all this — and much more — bad leadership tends to be pretty pervasive in a lot of companies.

One of the reasons that bad leadership persists is hierarchy. “Game recognize game,” as they say, and “like recognize like.” That means profit-chasing d-bags who become “leaders” in organizations will, in turn, promote other profit-chasing d-bags to that perch. That’s why your company has a “Chief Strategy Officer” who does nothing all day but makes 8.5x what you do, and it’s why the majority of meetings you attend will make you want to self-immolate.

That’s Reason 1: hierarchy persists.

Reason 2 is that business is all about “Well, we’ve always done it that way!”

Reason 3 is that no one can measure the costs of bad leadership very directly — ah-ha, until now!

The costs of bad leadership

Here’s a new article called “Putting A Price On People Problems At Work.” (Alliteration!) I’ll address the foibles of this article first: it only talks to 83 executives, so … small sample size. Additionally, the numbers are estimates from the executives — not necessarily based on their balance sheets. So there are limitations, yes, but it’s still interesting.

Look at this visual first:

That’s how much money executives are estimating they waste each day on these topics. In written form, here you go:

We expected our study to reveal significant waste. However, we were not ready for the magnitude of the results. In the course of a day, the executives estimated wasting an average of $7,227.07 per line item per day, for a total of $144,541.30 per day, summing each of the twenty points of waste. That’s an astounding $52,757,574 of lost value and potential per year per organization on people problems. These are perceptions rather than scientific measures, but they reveal significant amount of lost value.

That’s a lot of scratch — $144K is probably one SVP’s salary annually at some companies, and that same company is losing that every day. Damn.

Onto the next part!

The top five bad leadership costs: A quick analysis

If I’m reading that chart right, here are the top five line item hits coming from bad leadership:

  • Poor hiring process
  • Bad customer experience
  • Useless meetings
  • Drone executives who don’t inspire
  • Paying consultants for common sense repackaged at $2M/month

Alright, now let’s play a little game. I will bold a statement that a rational employee might say. The statement that follows it is a common executive response.

“Our hiring process isn’t getting us the people we need.” (pause) “No time for that shit, Judy! Kick it to HR! They have the functional knowledge! I’m out here building the biz!”

“Customer experience and feedback has been poor for three quarters.” (pause) “You know what Henry Ford said, right? If he asked his customers what they wanted, they would have asked for a faster horse! I’ve got 30 years in this game! I trust my gut!”

“We need to call a two-day meeting to discuss the last meetings we had.” (pause) “You know it! We will collaborate and brainstorm to a strategic road map!”

“I’m concerned that we’re not inspiring the customer-facing employees.” (pause) “The rank-and-files? Fuck ‘em! I don’t get bonus’ed on whether they’re happy!”

“The ROI on these consultants is suspect.” (pause) “They’re industry experts! They recently worked with a competitor! That team knows what works! Fresh blood!”

See the issue here?

Bad leadership, lack of caring, and costs: How to fix ‘em

Let’s take those five bad leadership and people-that-don’t-care-running-the-place costs and try to fix them.

Hiring Process: Yes, your hiring process probably sucks and quite likely alienates the best people, as opposed to attracting them. Solution: Move away from traditional markers (“expertise”) and towards new ones.

Customer Experience: Care about it, because it matters. Any customer of yours probably has at least 2–4 (and maybe 200–400) other options. If your experience sucks, they’re bouncing. Solution: Begin with this quote.

Pointless Meetings: Happens everywhere, sometimes at 300,000 hours/year. Solution: The Triage Method.

Inspiration: This is the essence of bad leadership. Solution: Promote less assholes and promote more people who have social skills and graces. Even if those people are bad public speakers, the employees will respond better to them.

Consultants: Often-ignored fact — when you hire consultants, you’re essentially saying you don’t trust your internal resources. Solution: Instead of rushing to do what everyone else does, look at your teams and see who could help out with new projects.

Are some of my bad leadership solutions simple? Yep. But the last thing we need right now in business is more complexity.

Here’s the thing: There will always be bad leadership

It’s never gonna go away. Here are 12 examples, and here are seven more! There will always be bad leadership, for some of the reasons I listed above. The ways you counter it — or at least reduce it — are:

  • Care about people
  • Think purposefully about who you promote/ “vet”
  • Understand what bad leadership does to the bottom line
  • Let a few people rise up who think differently than the established decision-makers
  • Simplify things, as opposed to adding tiers and reams of process

Oh — and please remove “talent” or “personnel” or “leadership training” context from Human Resources, which is barely human at all. I lovingly call it “The Cover Your Ass Automated Department.”

Any other thoughts on bad leadership?

My name’s Ted Bauer. Learn more about me, yes?

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Blogging, largely about work and how to improve it. How I make (some) money:

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