Profit, Time and Style

There are lots of research papers that prove the theory that leadership style, employee morale and collaborative relationships improve productivity.

So why are we still looking at behaviour of leaders who ‘micro manage’ , lead by fear and are focus on short term results.

The answer lies in those last three words and accounts for the behaviour necessary to engage and collaborate even when the going gets tough.

Research into change initiatives and time taken to achieve the changed state suggests playing the long game in a results driven business which measures bottom line profit indicates that it will not give these instant success measures, or if they do they are not enduring.

Emphasis on short termism and management style tends to veer towards a more autocratic and costs conscious approach to leadership and more ‘control ‘over employee’s methods. When a new CEO gets appointed, there is a debate about time frames and what is expected as a measure of success that drives their behaviour towards a more autocratic approach. Stable equilibrium in this instance is achieved by focus on methods and results but generally does not last more than a year

Participative programmes and empowerment/engagement with co-workers is a more collaborative but time extensive approach and leads to higher and sustained productivity in the longer term, to achieve steady state in the scenario take considerably longer because conversations take more time and communication is expanded at all levels. Generally peaking these sort of ideas take between two to three years, quite often CEO will be under pressure to reduce this time frame which inevitably means reverting to short term behaviour

Boards will give direction and guidance about corporate ‘values’ and CEOs, with the best will in the world ,will want to be the empathic compassionate lead that fits in with company values. The reality of pressure is somewhat different, especially where market or economic conditions are not favourable, so ‘survival’ not sustainable mind-sets creep in.

When we talk about higher productivity, lowering costs and tightening we are also talking about a loss of employee engagement and quality control.

So these findings are nothing new, and the impact of time and its luxury is also a significant factor in ‘leadership’ debates. From a fact check point of view this notion has been around for some time and the time frames outlined above have been proved by research.

The source of this material is from the  Rensis Likert book entitled ‘The Human Organisation’ it is well worth a ( re) read because this research was carried out in the middle of the last century and here we are some 60 years later still debating the same issues about short termism although admittedly the language has changed when we talk about ethics and sustainability .

The book also contains some other gems when we talk about this behaviour and ideas such as ‘Asset building is unrecognised’ and ‘Cash from liquidations is not earnings’ so how many times do we have to have LinkedIn discussions about the pursuit of profit, time and style.