A contribution by Michael Kühner for the e-book “GmbH-Geschäftsführung 2022” of the Euroforum
Current challenges
Changes in the market and in society have always taken place. But today, leaders are challenged to a particular degree as several fundamental changes converge. Above all, there is the massive increase in complexity and dynamics, which demand ever faster action or at least reaction. Managers are caught between market and customer requirements, demands from top management and, of course, the requirements of their employees. As a result, the management job is no longer as attractive as it used to be, since there are now good lateral career opportunities without personnel responsibility, which enable increases in earnings opportunities through important knowledge as well as experience. On the other hand, leadership work has become a job in its own right today and is no longer just an accessory to a technically good performance. This increases the opportunities for people who are truly focused on leading and want to/are able to break away from a strong technicality.
What are significant differences from the past?
We must acknowledge that a power shift has taken place. We now have a provider market where companies must apply to potential employees, not the other way around. Good people with a lot of potential or already profound skills are in a position to choose a suitable employer – they have a choice. Even if the first choice should be a wrong decision, nowadays a good new job can be found quickly. Even if
it difficult, this shift must be increasingly recognized by managing directors and CEOs. They have become supplicants to job applicants and are no longer the patrons of good jobs.
In parallel, a change in values is taking place. Today’s generation wants to make their lives meaningful and feel joy or fulfillment in their activities. The topic of life balance (the word “work-life balance” should be avoided, by the way, because work is part of life and therefore an integral part) is important for the younger generation and has a contagious effect on the “older” generations as well. The content requirements of employees for their jobs as well as for their employers have grown enormously. The gap between claim and reality is mercilessly announced on the relevant rating platforms. More and more executives also want to
and insist on framework conditions that do not allow the difference between the workload at employee level and management level to become too great. In many cases, the extra salary is already being dubbed as compensation for pain and suffering.
Executive perspective
It can be observed in many cases that managers are not sufficiently prepared for the requirements of the new working world. You are literally “thrown in at the deep end”. The automatism of promoting a good specialist to a manager has never presented itself as a sensible solution. Leadership is about much more than the subject matter expert role previously taken. Therefore, good preparation for this new role is essential. The extent to which the suitability and potential for leadership exist must be examined accordingly in good time beforehand. It should not be automatically inferred from good professional performance that the
potential for leadership exists to an equally good extent.
In addition, managers experience a high level of excessive demands for the reasons already mentioned in the first part, which, by the way, is also confirmed by several studies (e.g., Leadership Radar Bertelsmann Stiftung, 2019). Many managers feel left alone. Why? On the one hand, due to the high demands of business leaders and what they see as the excessive demands of employees. On the other hand, they are frustrated and therefore become tired of leadership. This often results in two reflexes:
1. an authoritarian management style is increasingly applied. Attempts are made to solve the situation with a crowbar, but this tends to make the situation worse.
2. due to inner resignation, one increasingly falls into a laissez-faire style. However, this is just as damaging and demotivating for employees.
Perspective of the employees
Many employees experience inadequate or excessive leadership. It is often complained that the leadership is not professional. Poor leadership remains the most common reason for termination. Therefore, the cost of poor leadership is very high.
What happens on the part of employees when they are not well managed?
They are demotivated, do “duty by the book” or even seek to change jobs. Above all, the best employees always change first. You
usually find a good new job quickly. The other employees have a little more difficulty in this regard, but are often in this “inner quitting mode.” In this respect, currently low fluctuation rates, which some companies still boast about, are of no use at the end of the day if the “wrong” people leave or stay.
Positions in the company remain unfilled if too little potential is known within the company’s own ranks. As a result, companies have to put up with a lengthy process of recruiting on the market that often doesn’t pay off: on paper, potential new employees can sell themselves well, but do they really fit into the team and the corporate culture? The costs incurred for personnel consulting, the recruitment process, induction and knowledge transfer should not be underestimated.
What is needed, then, is good, contemporary leadership that is oriented toward both the company and its employees.
8 effective measures to build a motivated and effective leadership team
What can CEOs and managing directors do to meet these demands and build a powerful, but also healthy and effective leadership team?
1. ensure continuous talent management
Company executives must address the issue of talent and succession management in good time – preferably on an ongoing basis – in order to identify sufficient talent and high-potential employees within their own ranks and develop them for future jobs. This reduces the costs of external search and recruitment and increases the motivation of the company’s own employees, who feel more strongly perceived.
2. pay attention to the potential of a person
When identifying future leaders, it is important to look at potential and not just competence. People who are not yet in a management position lack experience and thus knowledge. This often results in the fallacy that they are not seen as leaders per se. But it all depends on the potential behind it: If someone has what it takes in terms of personality, ambition and talents to learn the necessary knowledge and skills – and to do so quickly – then this is where investments should be made. Leadership can be learned in principle, but how quickly and to what extent depends on potential.
3. involve employees
The selection and promotion of high potentials should take place with the involvement of the employees. Transparency and open communication bring the interests and ambitions of these talents into focus, resulting in a positively perceived perception on the part of employees. Even the realization that the task of leadership is not the right thing to do is experienced rather positively by the fact that it was made possible to determine this together.
4. establish development measures
The next step is to set up development measures for high-potential employees. Training should not always be the only thing on your mind. Mentoring or other support concepts, the assumption of new tasks – especially deputy tasks – supplement training to grow into the topic of leadership with a sense of proportion. A good mix of different measures is the efficient, most sustainable way to competently understand and implement the topic of leadership – “on the job” in a very practical way and accompanied by knowledge and training.
5. incorporate regular feedback sessions
The whole development process requires regular conversations and feedback. Preferences, experiences, wishes and challenges and possible perspectives should always be discussed in dialogue. Long-term rigid planning is difficult in succession management today anyway, as the future
development of vacant positions in the company is not precisely predictable. A regular exchange with talents and potential contributors is therefore essential. In addition, people want regular feedback. This should also be appreciatively critical, i.e. it may also hurt sometimes, if it is done with a fundamentally supportive attitude.
6. have an open ear
Managing directors should also be in regular contact with the existing management team, and not just on business issues. It is precisely when an open ear is shown here for the leadership issues and concerns of the managers that the managers feel that their role is taken seriously and listened to.
7. promote exchange of experience
The exchange of experience among the managers themselves should be additionally promoted. It is so important, especially in these turbulent times, to actively implement the regular exchange of experiences with other managers. Challenges must be considered and addressed together. Collegial consultation is a good tool.
8. evaluate leadership and team culture
Regular evaluation of leadership and team culture provide a good overall framework for people management in general, but also talent or succession management specifically. Here, 180- to 360-degree feedback tools are ideal for surveying the topics of leadership styles, culture parameters and satisfaction. However, this is not just about the pure survey, but also about the discussion to clarify grievances, moods and the need for change. In this, the teams of managers can be actively involved. Again, regular communication is key and contributes to a positive development of the leadership culture.
Conclusion and outlook
The biggest mistake CEOs and MDs make is that they don’t invest in these activities as long as business is good and results look good. That should no longer be the motto in this day and age. Because sooner or later there is usually a slump, an economic dip or other market changes. If you haven’t done your homework in people management, you won’t be able to turn things around quickly. See through actionism
people today quickly and trust is quickly squandered, but unfortunately can not be built at the same pace.
With this article in the e-book “GmbH-Geschäftsführung 2022“, Michael Kühner makes an important contribution to the debate on modern people management for GmbH managing directors. In this issue, you can expect many practical articles to help you make quick and sound decisions in your day-to-day business. You can download the article “What CEOs should pay attention to in order to build a motivated and effective leadership team – 8 effective measures” here for free:
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