Leadership blind spots? We all have them. Sometimes we refuse to admit them even when the consequences are staring us in the face. Unfortunately, however, until we recognize them, organizations are stuck in slow motion, doomed to either repeat the same cycle over and over again – “deny, negative consequence, repeat,” – or hope for a different outcome when all the facts indicate otherwise.
Blind spots come in many forms; denial of the competition, refusal to acknowledge new technologies, failure to create an executable strategy, or refusal to acknowledge a long-term employee’s overall impact on the organization.
I was reminded of the long-term employee issue while reading a recent article in the WSJ, “Startups, Pink Slips Come Early and Often.” It cites statistics showing that the start-up culture “fails fast” which translates into jettisoning technologies, ideas, methodologies and people quickly. Some turn over 30-50% of their people in the first year. Recognizing that people aren’t a fit is a good thing, as is moving them out quickly.
So why is it that these start-ups can see so clearly who is and is not a contributor after they observe performance and more entrenched companies do not? I’ve had multiple clients over the years whose second-in-command people all had a significant lack of leadership skills, organizational skills, and in general, had skill sets that had long ago stopped serving the company. These senior level executives were all examples of “the Peter Principle,” which says, “members of an organization where promotion is based on achievement, success, and merit will eventually be promoted beyond their level of ability. The principle is commonly phrased, “Employees tend to rise to their level of incompetence.”
Reflecting on why the leaders of these organizations were blind to this phenomenon when everyone else in the organization saw it so clearly, two key factors stood out. First, the long-term employee had the ear of the leader. Second, the leader felt loyalty to the person because of their hard work in the early years of the company. It seems this loyalty for the work performed in earlier years blinded the leaders to the reality that their team members had risen “to their level of incompetence.” Often these types of employees get promoted simply because they are the keepers of company tribal knowledge and the founders have a fear that if they go, so goes the organization, or at least important background knowledge and history will disappear. So the founder rewards them with more promotions, more bonuses, and stock, and the person feels empowered and validated in their “rightness” and how they do things. Worse for the company, by doing this the founders also insure that anyone who questions these folks will not last long at all. The “Peter Principle long-termers” don’t like change and will prevent it at every stage, keeping the company stuck in a spin cycle. Newcomers are thrown out as traitors or incompetents the moment these “Peter Principle employees” feel challenged or threatened in any way.
The harm to the organization is huge. Just as workers with the wrong skill sets can sink a start up, the long-term employee whose level of responsibility has surpassed their skill set can be the constraint for growth, and in some cases, can also sink the ship, albeit more slowly. It can be the one thing that keeps the company from robust growth and change.
So take a look at your team, who do you tolerate because they have been there for a long time? Whose skill set has been surpassed and not only is no longer an asset to the organization, but worse, is now a liability?
If you’re unsure, do a confidential 360 evaluation of your management team. You’ll find out very quickly what’s going on and the value or lack thereof from your long-termers. You will have some who are wonderful and have grown with the organization over the years, (and more power to them). However, I bet you will have at least one that you already know in your heart is a problem and until you deal with it, you’ll be doomed to the “deny, negative consequence, and repeat” cycle. Isn’t 2014 time for a new cycle?