The Cost Of Poor Leadership & How To Fix IT

If you have ever been on a team led by an incompetent manager, you know the impact it can have on an organization. Not only does poor leadership have the potential to cost a business everything from a financial standpoint, but it can also strongly affect the health and well-being of the staff.

For example, a person’s ability to consistently achieve top marks in a sales position doesn’t always mean that the same person possesses an innate ability to lead a sales team. While they could use their sales savvy to improve department protocol, they might not possess the qualities that make a truly capable leader. As a result, you could wind up with a highly discouraged, unmotivated, unhappy sales team.

Why Is Poor Leadership Expensive?

Leadership is an action not a position. Whether it’s an under-qualified vice president, a department supervisor, or a project leader, poor leadership causes a breakdown in company culture that can cause toxic work environments and employee dissatisfaction.

Here are some costly risks of bad leadership in a company;

1. Staff turnover

You have probably heard the phrase “employees don’t leave companies, they leave managers.” Sadly, this is true for a lot of people. The problem is, many leaders start out as an entry-level high performer and get promoted until they land in a management position, typically without any evaluation of the skills necessary. Someone may be great at managing a product or project, but people management is another story.

 What types of leadership behavior would make an employee want to leave? Employee alienation, inability or unwillingness to share knowledge, unapproachability, and the list goes on. The health issues caused by stress also plays a big role. Not only does stress shift our brain towards anxiety or depression, but it also wears down our immune system. Unfortunately, this doesn’t just impact individual employees as negative thoughts can spread throughout the organization and even back home to families.

2. Missed deadlines

Productivity is the most impactful way leadership helps or hinders the bottom line. Poor leadership impacts employee satisfaction, which then impacts employee productivity. The purpose of leadership is to be a resource for employees throughout an initiative. If one project is not completed on time or within budget, the projects following are affected.

 While “micromanagement” is not advisable, the senior manager needs to understand the progress of each project. Providing frequent updates and feedback will allow for more accurate expectations. An effective manager should be able to provide encouragement, feedback, and support to ensure their staff is completing assigned work on time and with intention.

A consequence of poor leadership is the failure to inspire employees to deliver their best work and meet their potential.

3. Toxic Work Culture

Poor leadership impacts culture negatively in a number of ways, but the first has to do with a lack of vision. Without any direction, employees will not know the goals of the company or why there are specific processes. If this is the case, they will accomplish goals mechanically without any intelligent direction.

A good leader will communicate with employees regularly to provide a range of information relevant to their work. Encouraging staff to share ideas and engage in open discussions benefits the company and ensures everyone is on the same page.

Toxic work culture leads to low morale with employees feeling misdirected or uncertain. Avoid a culture of mediocrity by focusing on effective communication and positivity.

Finally……

What are you doing to eliminate the risk of poor leadership? Are you distributing managers’ reviews? Surveys? Listening to employee concerns? If you are ignoring employee feedback, you are not doing your organization any favors.

Become an exceptional leader by signing up for this Leadership & Management Skills Training Course and improve your ability to work with and through others to drive business success.