Want to Strengthen eNPS? Give Employees a Voice and a Future

In the American West, cattle ranches have long been identified by their livestock brands, the symbols seared into the hides of their animals. Ranch brands were primarily created to help identify lost or stolen animals, but over time they took on a larger meaning for the cowboys employed by the ranch. The phrase “ride for the brand” became a call for all employed by the ranch to work for something larger than themselves, to positively represent their employer in all that they do.

Feeling a deeper sense of connection and purpose with your work is not only important in ranching. It is critical to any organization seeking to foster employee engagement. The Employee Net Promoter score, or eNPS, is one technique organizations use to understand monitor, and improve this sense of purpose. This simple metric is based on a single survey item, “I would recommend this organization as a great place to work.” To calculate eNPS, a score between -100 and 100 is derived which can indicate to leaders how favorably employees feel about their overall employee experience, based on employee responses. In other words, do they ride for the brand?

The eNPS is a helpful lag indicator of the high-level health of the employee experience. But how does an organization strengthen their eNPS? Based on our (DecisionWise) experience surveying and consulting thousands of organizations, two consistent strategies emerge: give employees a voice and give employees a future.

leader increases eNPS by showing his team he cares

Give Employees a Voice

At DecisionWise we define Employee Voice as the extent to which employees believe their thoughts and opinions are heard and reasonably considered in organizational decisions. Voice is a key component, along with growth, belonging, and organizational commitment, of the DecisionWise framework for measuring Diversity, Equity, and Inclusion (DEI). Employee voice is a core component of an employee’s overall experience. How does voice impact eNPS results?

When we run statistics on our pool of employee survey results, a database of over fifty million responses, we see which items are most positively correlated to healthy eNPS results. One of the strongest correlations is the item, “This organization cares about employees.” Employees reciprocate the level of care shown for them by the organization. Further correlations tell us that employees feel cared for when they feel they are heard. Some of the employee voice items we include in organization surveys include:

  • This organization values employee input, feedback, and suggestions.
  • I feel that I can speak up without fear of retribution or negative consequences.
  • Senior Leaders know what is going on in the organization.
  • My opinions are sought on issues that affect me and my job.

Employees are constantly looking for evidence that they are heard and valued by their employer. Small moments matter.  A one-on-one with a manager where an employee can share concerns, questions, and ideas, or a communication from a senior leader that reflects an understanding of the realities of their role can have a tremendous impact on an employee’s experience. These moments influence perceptions around employee voice and organizational care and ultimately the eNPS results.

woman feels she has a future with her company

Give Employees a Future

One of the best things leaders of an organization can do to spark engagement is to build a strong sense of optimism about the future of the enterprise. Another primary correlate of a strong eNPS is the survey item, “I am confident that this organization has a successful future.” This survey item also frequently shows up as a statistical driver of employee engagement. When employees feel like they are part of a winning team or organization, they naturally want to align themselves with that success. Interestingly, when this happens, engagement goes up and the company’s success is magnified. It becomes a virtuous cycle of engagement building success, and success building engagement.

There is another component necessary to paint a compelling future for employees – the role of the employee in that future. It is not enough for the entity to win. Employees must win with the organization. A compelling future must also hold a role for the employee. A leader or manager must be able to communicate, “We’re doing big things as a company, and you have an important role to play in these efforts and future success.” Growth and development conversations must be tied to the future success of the organization. When this happens, an employee’s sense of meaning, impact, and connection increases and they become more likely to engage. This has a tremendous impact on your eNPS.

The Employee Net Promoter Score is an important measure to track. It is tied to the experience of real human beings. Giving employees a voice and a share in a bright future improves their experience and will, in turn, inspire them to do more to build and promote the organization’s objectives. In other words, they will ride for the brand.

How to Become a Development-Centered Leader

A development-centered leader works with her team

My 2-year-old son is the ultimate leadership teacher.  

On any given day, I have tasks I need him to perform. I have tried many different strategies to get him to do the things I ask him to do—some more effective than others. The least effective sequence of events:  

  • Ask him to complete a task. 
  • Get reluctance and excuses (his current line “Not today, Dada.”). 
  • Tell him what to do. 
  • Motivate him with bribery and incentives. 
  • When this does not work, use my authority and position to get him to comply. 

Do we see elements of this behavior in the workplace?

A team works more cohesively with a development-focused leader

My parenting strategy is an example of what some leaders do to motivate team members to accomplish role objectives. My 2-year-old wants what everyone wants: A leader that empowers decision-making in others that leads them towards personal growth. Our data shows that team members are eager to find leaders willing to help them develop personally and professionally.

Development is motivating because we all want to progress and gain a sense of mastery in both our work and life. Workplaces need leaders that can balance the development and growth of others while still achieving business demands.  

So, how do you continue to become this kind of leader? 

Leaders often fall prey to the siren call of results, and their focus on developing others gets pushed to the back burner. Again, most leaders have good intentions of leading from a development-focused approach, but business demands are always the priority.  

Here are two principles to help you lead with a development-centered approach.  

#1: Avoid Telling Others What to Do

Most leaders go through a phase where they rely heavily on a command-and-control style of leadership, where the focus is on this core idea, “do what I say.” Orders and directives are issued down the hierarchy chain. This style of leadership often produces immediate results.  

Tasks are completed, but what is the cost? Morale can suffer with a heavy dose of top-down instruction. Input, innovation, and discretionary effort wane. Power struggles can ensue, and individuals may carry out instructions but only because they are compelled to do so.  

There is a time and place to give instructions and directives, but it should not be your default leadership orientation. One appropriate example of when to offer more guidance and instruction is to newer employees that are not up-to-speed in the role. 

Employees engage more with their development centered leader

A primary objective of a development-centered leader is to create employee experiences where people feel empowered to make decisions and advance in their careers. If leaders give orders and micromanage procedures, it removes the individual’s ability to make decisions, problem-solve, and ultimately, progress. Humility and patience are qualities needed in a development centered leaders’ approach to allow direct reports to learn and grow. Individuals will make mistakes; tasks may not be accomplished in the way you would have instructed, but individuals will learn and become better. They will feel a greater sense of ownership in the process and the result will be increased engagement and discretionary effort. 

#2: Co-Create Instead of Dictate

Ask yourself how often you do the following? 

  1. Lead with questions to clarify, explore, and guide other’s thinking. 
  2. Give suggestions rather than commands to allow individuals to make decisions. 
  3. Establish clear guidelines and outcomes less focused on excessive rules and processes. 
  4. Give warnings about potential pitfalls. 
  5. Hold individuals accountable for both correct and poor decisions. 
  6. Support, recognize, and reward strong performance. 
  7. Double down on compassion throughout the whole process. 

Leaders that follow these principles will benefit in both business results and team member development to confront the next wave of workplace challenges.  

The development-centered leader approach focuses on the long-term success of individuals and companies that will produce sustainable teams, leaders, and organizations. The ROI will be worth the additional time and focus it requires.  

As I continue to work at this approach, I still get “Not today, Dada.” from time-to-time but, I am finding a shared engagement, commitment, and decision-making orientation unfolding in my 2-year-old son’s behavior. Individuals on your team will value your dedication to their success. You will find a greater commitment and self-directed nature in your team.

Leading Remotely – 6 Ways to Increase Connection and Engagement

Leading Remotely

Will half of people be working remotely by 2020?” That was the title of a prescient article written in 2014. Another report stated that between 2005 and 2018 remote work increased 173%. Still, no one could have predicted what the business world is experiencing right now.

When it comes to the current work from home (WFH) reality, many are enjoying the change. However, working remotely, especially when sudden and required, comes with challenges. For example, one report noted that face-to-face requests are 34 times more successful than email. And while many employees are saving on commute time, they are missing in-person interactions and the sense of belonging that comes from social connection.

While we long for normalcy after this earth-shaking event, the trend toward working remotely is likely to continue to some degree or another. A 2019 survey revealed that about 75% of workers consider flexible working to be “the new normal.” That was in 2019! Now, more than ever, leaders need evolving strategies for leading remotely.

Our DecisionWise research of more than 40 million employee survey responses has shown that “connection,” which we define as “a sense of belonging to something beyond yourself,” is one of the five keys of employee engagement. In fact, it is the key found to have the greatest impact on the overall employee experience(as well as engagement outside of work—in community, family, social groups, etc.).

So, that raises the question: assuming we will see a greater push towards a WFH population, how do we continue to ensure connection? Based on our research into engagement, we have found that a few baseline items must be met.

Ensure Baseline Communication

Leading remotely for high performance certainly includes enabling healthy communication. Communication goes beyond simply issuing an email memo from the top of the organization. Communication also serves a social purpose, especially when leading remotely. In other words, communication propels connection and collaboration but also is needed for basic efficiency. When face-to-face interaction is limited, communication can suffer. Below are three suggestions to help keep information flowing for remote teams:

1. Encourage Proactive Upstream Communication

Reduced communication, especially in terms of frequency, means that understanding who is contributing to which initiative can be challenging. What’s more, leaders who want to understand how employees are doing now lack the time to reach across the wider “digital hallway.” Similarly, employees may feel that their individual efforts go unnoticed. They may also wish to share findings from the front line but lack the structure to do so.

Encourage your team to proactively communicate with you and their team. In addition to social updates (well-being check-ins), help them report relevant and timely operational information on progress, roadblocks, and weekly lessons learned. There are technology tools that can help. For example, DecisionWise created the Manager Weekly Check-in Tool. It’s a free tool based on the 5-15 framework developed by Patagonia’s founder Yvon Chouinard. Technology can be a valuable tool in upstream communication, but whether the solution involves technology is less important than the idea that information (and, therefore, trust) is a two-way flow.

2. Cultivate Organic Information Sharing

Basic communication often flows organically—up, down, and across the organization. Colleagues encounter each other in the hall or stop after a meeting to collaborate on projects. These interactions are generally unplanned and unintentional, although extremely valuable on many fronts. Many of those informal interactions are now suddenly non-existent in a remote setup. Without these natural interactions, employees may hold onto questions and concerns or delay sharing ideas until the next structured encounter—or not bring them up at all.

In order to mitigate this loss of organic information sharing from direct reports, managers must make these previously unintentional interactions intentional. For example, we know of some leaders who hold “virtual open-door hours,” which involve optional call-in times, held on a regular basis. These managers leave a conference or video line open so that team members can easily hop on and share their feelings.

There is also something to be said for peer-to-peer touchpoints –– one author called it “serendipitous collaboration.” Recently, a colleague scheduled a short remote call with me to catch up on projects and maintain social connection. We shared ideas, benefited from connecting, and then went back to the day’s tasks. There are simple ways to reach out to colleagues in a spirit of “What are you working on? How can I help?” We often discover the solutions to our own issues just by talking them through with another person. This is not to say that we should drastically increase the count of weekly meetings. It is simply that a little effort to touch base can go a long way.

3. Lower the Social Cost of Speaking Up

“Does everyone agree?” We often hear this phrase just before the close of a meeting. This approach for building consensus and getting the best ideas may work when everyone is physically present and contextual clues and body language are easy to identify. When leading remote teams, however, louder voices will likely dominate those who exhibit a stronger preference for introversion. Additionally, managers can lose track of who hasn’t contributed to a conversation because team members aren’t within their customary line of sight. Without a prompt, some employees simply won’t risk “taking over the screen” and speaking up.

The concept of psychological safety play into all of this. Our current DecisionWise benchmark database suggests that one-third (34%) of employees indicate that they are “hesitant to speak up for fear of negative consequences.” That, in itself, is a problem. Compound this concept with the idea that online meetings tend to reduce interaction, and you can see the problem. Managers must be intentional in lowering the social cost of speaking up and be mindful that remote communication may naturally stack the deck against openly contributing to meetings.

To lower the social cost of speaking up over digital media, managers might encourage individuals to post comments in simultaneous text chats. Online voting and polling tools offer anonymous solutions for those who prefer a low-key approach. Keep in mind that more time for silence may be needed after asking a question to a remote audience than would otherwise be the case.

Encourage Energizing Connection

Leading remotely doesn’t just mean efficient information sharing. With basic communication in place, leaders can interact with teams in a way that drives a sense of belonging to something beyond one’s self. That sense of connection leads to greater engagement in the workplace. In fact, a Decisionwise analysis revealed the positive correlation between connection, as defined above, and employee engagement to be .83 (which, in layman’s terms, means that there is a strong relationship between feeling I belong to the organization and my overall engagement). This also means that employees who experience a sense of connection are far more likely to be productive, innovative, and remain with the organization. Here are three aspects of belonging and engagement to consider for leading remotely.

1. Maintain Regular Recognition

Without regular face-to-face interactions, and while in the throes of the current pandemic, employee recognition is more likely to slip. For remote teams, and especially those operating at high speeds, the communication that does take place is often limited to issues surrounding the work itself. Just as organic communication decreases in remote environments, so does the habit of recognizing the work and efforts of others.

Letting recognition slip can slow things down. One classic study showed a strong link between recognition and motivation, claiming it to be the second-highest intrinsic motivator for employees. Recognition is important from supervisor to direct report but may be of more value when coming from peers. Recognition is also closely tied to those core feelings of belonging and engagement mentioned above. Consider how a phone call only to offer recognition might help an employee feel engaged.

2. Manage Workload and Engagement

“Meaning” and “Impact” are two additional keys to engagement, as found by our engagement research and recent book, Engagement MAGIC (spoiler alert: these keys spell “MAGIC”– Meaning, Autonomy, Growth, Impact, and Connection). Engagement will drop when teams don’t feel their work has purpose or impact, or when there simply isn’t much to do. On the other hand, many employees report feeling over-stressed and near burnout.

Recently, a colleague shared the story of a client who, in an overwhelmed state, abruptly phoned his supervisor to say, “I quit!” Although the client ultimately chose to remain, the pressure had built up and exposed the underlying issue: severe stress, to the point of burnout. Such are the current circumstances of many who are silently suffering. Current pandemic concerns are hitting employees in their personal, non-work roles as well. In addition to wearing us out, such stress can lead to reduced effectiveness in our decision-making functions (when we need them most)! Being afraid of stress is not the answer, but managing severe stress is vital.

So, we have a bit of a conundrum to be aware of; too little meaningful work means disengagement, but too much can mean burnout. Being aware of that line between challenge (the “G” or “Growth” key in MAGIC) and stress is a critical skill for today’s leader, particularly with the inability to physically interact with employees multiple times a day.

Here’s Where to Start

While there are things we can do ourselves, in order to positively affect this aspect of engagement, supervisors play a decisive role. The right help begins with awareness of each team member’s current state. Compassionate awareness will lead to empowerment, delegation, reshuffling of tasks–whatever helps achieve rebalancing. Sometimes simply listening is the answer. When burdens cannot be lightened and tasks simply must be done reminders of the meaning of our work can help us find the wherewithal to press on.

But managers do face barriers to even being aware. Consider (1) the common fallacy that a supervisor’s most important contribution is his or her individual contribution (rather than working through the team); and (2) the remote status of teams, which can breed fewer one-on-one meetings and far less attention paid to overall engagement and workload. These and other forces can draw managers away from the people and mentoring dimension of their roles. Nevertheless, deliberate work to compassionately be aware of the workload and emotional states of employees will lead to a state of engagement and flow, not to mention longevity.

3. Trust Versus Command and Control

Finally, amidst the chaos of the present COVID-19 pandemic (and even before), some are asking whether old-school directive leadership models are more relevant than ever. We have heard this question arise in circumstances of confusion as teams adjust to new environments. Many current employees face completely novel issues; many are yearning for direction.

Leaders should consider providing more explicit instruction while facilitating quick decision-making to move things forward. Nevertheless, a command-like approach has potential long-term consequences. After all, who likes to be controlled? If employees perceive managers as mistrusting, they will likely not feel that they belong and consequently not fully engage in their work. On the other hand, our research tells us that trust and autonomy (the “A” in MAGIC) energize employees to use more of their discretionary thinking to accomplish their work.

Keep in mind, however, that autonomy fails without clear boundaries and expectations (on both sides). We refer to this as Expectation Alignment. Autonomy is not anarchy. Trust is not simply laissez-faire. Both trust and autonomy come via clear expectations. The goal is to grant autonomy while requiring accountability. To strike this balance we have seen instances when the aforementioned Manager Weekly Check-in Tool has helped. Another group we know of relies on daily check-in and coordination calls with the whole team (for which the team has been grateful). Whatever the approach, make it routine and direct (vs. subtly checking on employees to see what they’re up to). An indirect approach can communicate I don’t trust you—we have seen this approach lately too.

With more frequent check-ins, supervisors may feel they are bordering on micromanagement, but if done with transparency and in order to empower your team with direction, increased structure need not be mistrust or micromanagement.

Empower Success

Besides getting results, leading remotely calls for fresh thinking around how to get those results. Such thinking will include how to mitigate new barriers to communication. Remember that communication is also for spurring engagement and that managers will greatly benefit their teams as they cultivate belonging and connection. We have found repeatedly in our research that connection unlocks engagement, and thus increased innovation, organizational citizenship, and productivity. We are confident that success in our current circumstances will be achieved by the everyday work of individuals, working remotely, but empowered by their managers to solve our current challenges.

Video: Why Listening to Your Employees is Now More Important Than Ever

In this video message, DecisionWise President, Matthew Wride, talks about the importance of employee feedback during a crisis and the DecisionWise pledge to help your business listen, understand, and act, even during tough times.

Hello, my name is Matt Wride, and I am the President of DecisionWise. Before I get to my main message, I want to touch briefly on the COVID-19 pandemic. If feels like we are making some progress. This is encouraging, and I hope you are well and safe.

Despite the stress and heavy disruptions to our way of life, I am struck by the good I witness each day. For example, just a few days ago I waved to a man standing in overalls to walk through the drive-through lane ahead of me. As I waited, I wondered why he was walking through the drive-through lane, but I figured that in a COVID-19 world, he probably had a good reason. So, I nodded and smiled. When it was my turn at the window, the worker told me that the man in overalls had already paid for my lunch. I smiled as I watched this Driver saunter over to a big, loaded Kenworth. Now, I understood why he couldn’t get his vehicle to fit through the drive-through lane. So, here I was – I didn’t need his help, but he gave it anyway.  So, to this unknown Driver, I flash my four ways.

This simple story illustrates why we will rise from COVID-19 better and stronger, because the vast number of employees are good people, and they are doing their best in challenging times and circumstances. It’s easy to forget them amidst the stress, the draining cash balances, and slumping sales reports. We can’t. We mustn’t. We must acknowledge them, and the best way to do this is to listen to their feelings.

At DecisionWise we survey employees. You might raise an eyebrow and say, “Of course they are going to tell me to survey my employees.” You’re right. We are. We know that budgets are tight, and we know that employee surveys seem unnecessary when we are focused on keeping jobs. We get it. We promise to work with you to identify the essential services you need to stay on budget and continue working towards achieving your organizational goals.

Humans aren’t resources. They aren’t widgets to be tracked on a spreadsheet. They are people who represent an organization’s pathway to success. Now, more than ever, we need to engage with our workers, so they will engage in their jobs. We are trying to keep their hearts, hands, minds, and spirit with us. We need them so that we can meet the challenges that lay ahead.

At DecisionWise, we have adopted the phrase “The Obstacle is the Way,” as our COVID-19 metaphor.  We know that if our clients are to overcome their obstacles, it will be through the hard work and engaged efforts of their employees – those good people, just like the Driver that paid for my lunch!

Please reach out to us.  We have experienced consultants ready to assist, and we will do what we can to craft a employee listening program within the budget you give us.

Thank you for all you are doing and a big 10-4.


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Podcast: Recognizing Leadership Derailers

Manager talking with employee.


The “Recognizing Leadership Derailers” episode covers leadership derailer, 13 common leadership derailers, and the toxic combinations that we have seen when you mix them together.

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What is a derailer?
• Derailers are behavior CHALLENGES that undermine our results.
• A derailer is a behavior that gets in the way of optimal results.
• A derailer is not just a weakness. We all have many weaknesses that we may not need to develop to succeed. A derailer is a weakness that requires improvement if we are to realize our potential.

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Podcast: The Trust Factor in Leadership

They're in the planning phase of their project

Leadership Compass

In EP006 Leadership Intelligence Podcast – The Trust Factor in Leadership we discuss what is often overlooked as a leadership competency because we take it for granted. We assume we can trust other people until that trust is compromised or broken– then everything is suspect. During this podcast we will discuss the specific components of trust, research on trust and effective leadership, and how to build trust to be a better leader. Join Brad Taylor, VP of consulting services at DecisionWise, as he shares his experiences and examples of building trust.

View “Trust Factor in Leadership” webinar on demand.

During this podcast Brad will share case studies on the important components of trust:

• Building trust during rapid growth
• Creating interdependence
• Why symbolism matters
• Innovating for the greater good
• How servant leadership helps people to grow

Listen to more podcast episodes

Podcast on iTunes 

Why STEM Education Could Be Bad for Your Business

Early in 2006, US President George W. Bush announced the American Competitiveness Initiative. Formulated as a plan to provide US government financial support to specific academic initiatives, the plan called for significant increases in investment in fields related to STEM—Science, Technology, Engineering, and Mathematics. President Obama announced over $240 Million in additional STEM funding during the White House Science fair; the whitehouse.gov website site claims that the President’s initiatives have garnered over $700 million in public-private partnerships along STEM lines.  Given the momentum and importance, these initiatives are not likely to die down soon.  But could the STEM emphasis actually hurt business?

The STEM concept has been emphasized globally, and rightly so. Ensuring global education in these 4 critical areas is essential.  These are certainly important to success. However, it also brings up another concern. The reality is that an individual’s success in education, business, organizations—you name it—requires more than STEM. Notice something missing here?
These “hard skills” are easily defined. We all know what “mathematics” entails, and can therefore develop curricula or programs around this. We can also evaluate these hard skills within an organization.  However, while an individual may possess the “hard skills,” he or she may be severely lacking in the soft skills.

Several years ago I coached a group of individuals brought together for a high-profile international research project. Four of these scientists, in particular, were geniuses, each possessing multiple doctorates in the field. They were at the top of their fields— “STEM on Steroids” poster children.

So why the coaching? Despite their natural and acquired levels of genius, these individuals simply could not work with others, nor could they articulate their brilliant ideas to others in any way that would make these concepts usable. Their team meetings were chaotic and they left of wake of employee bodies whenever they interacted with others. Geniuses, maybe, but socially inept and severely lacking in leadership.

A singular focus on STEM, at the expense of other equally important areas, often causes problems that permeate today’s organizations. But, the issue is not with STEM itself, per se, but the thinking behind it, at the exclusion of other important topics.

Let’s step out of STEM for a moment, and into the organization, where STEM-think is apparent. More often than not, managers hire people who mirror their own skills, abilities, and desires. In other words, “in my organization, it’s easy to identify the best employees. They’re ‘just like me!’”
In some of our most recent research, we’ve looked at top-down performance evaluations, and compare these to the way the boss rates that individual on other instruments, such as 360-degree feedback. Employees receiving the highest performance ratings tend to be those employees with similar strengths as his/her boss, when comparing 360-degree profiles. So, if the boss is good at understanding the financials, he or she is likely to look for the same financial acumen in a direct report.  Again, the best employees are just like me!

Back to STEM. The increased emphasis in STEM, while important (and even essential), emphasizes the “just like me” factor. The reality is, the best employees (or students, volunteers, etc.) are NOT necessarily those with similar skills as the boss. In fact, most times, this is actually detrimental. This thinking reiterates the flawed notion that, because some individuals feel the four STEM factors are most vital, we should ALL focus on these four factors—often de-emphasizing other critical components of educational or organizational success.

Which brings us back to the four geniuses.

These men, while possessing keen intellect, lacked other critical success components, such as leadership, interpersonal skills, organization, delegation, communication, negotiation skills and, unfortunately, integrity. Many of today’s organizational initiatives and measurements miss these soft skills, which are so vital. They, instead, focus all their energy on STEM-like initiatives. Because of this, organizations and individuals today are often strong in the job-specific, hard skills, yet weak in the soft skills that make the hard skills work.

STEM (or whatever this list of key job-specific competencies is in your organization) is the price of admission. However, focusing solely on STEM-like competencies at the expense of other soft skills could be disastrous.

So, my solution? How about something more like “LICE”—Leadership, Interpersonal Skills, Communication… and Everything else. OK, not a very attractive acronym, particularly when mentioning “lice” in a school system. It needs work. However, performance and success are not only factors of what gets done, but how things get done. Focusing solely on the job-specific or STEM-type competencies in an organization (or in education) misses many of the other critical factors in an individual’s success.

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4 Ways Great Leaders Can Overcome Company Scarcity Issues

I teach an introductory political science class at a local university. This class utilizes an interdisciplinary approach by exploring basic economic theory, American history, and a bit of political philosophy. When introducing the section on economics, I try to reinforce the premise that economics is really the study of scarcity – what do you do when there is not enough to go around. Stated differently, economics is the social science that examines how we use limited resources to satisfy unlimited human wants.

DecisionWise - Leadership and Scarcity

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I teach my students that there are three options (and only three) when dealing with the problem of scarcity:

1 – Economic growth;
2 – Reduce our wants; and/or
3 – Use existing resources wisely.

It occurred to me a while back that scarcity is the same fundamental issue for leaders as well, and that true leadership is reflected in how effectively a leader deals with scarcity. Even in companies that are flush with cash, there are still never enough resources to cover organizational wants. Everyone is clamoring for more. There may be a need for more talent. There may be a need for increased innovation. There may not be enough time to develop those immediately below you. A leader is constantly bombarded with requests for more. Politicians live and die by how well they manage the issue of scarcity. The same is true for businesses and those that lead them.

Scarcity is a problem we all share, and as humans, we seem to understand it at an evolutionary level. Moreover, we seem to have a built-in urge to solve this problem. This fact can be used by leaders to improve outcomes by framing both the problem and the solution from a scarcity point of view, and then enlisting the help of others. (As an aside, scarcity is also one of the root causes of conflict, which is always an issue in any organization.)

To that end, I would suggest that leaders are best able to handle the scarcity problem by following four steps:

  1. Good leaders recognize the fact that there will never be enough to go around. Thus, they stop wasting valuable energy trying to make everything perfect. We often work with leaders in providing 360-degree feedback. One of the primary derailers called out on their reports is perfectionism. While in many cases, it’s appropriate to expect flawless results, the reality is that, many times, the time effort it takes to get that last five percent right far outweighs the value derived from that effort. The herculean endeavor may have been better spent on other scarce resources. Good leaders accept that: 1) scarcity is a problem that will never be solved, and 2) that, in the words of Voltaire, the “perfect is the enemy of the good.” Instead of ducking the issue, spinning wheels, or wasting precious resources when they could be better spent elsewhere, great leaders acknowledge the scarcity problem head-on.
  2. Savvy leaders try to understand the true human “need” at question. For example, rather than accepting at face value a request to hire more people, they delve deeper. This goes back to root-cause analysis—understanding the cause of the problem, not just addressing the symptoms. Perhaps the real need is to find individuals that possess a different skill-set. Maybe those skills could be obtained by training, as opposed to hiring. Possibly, the needs could be satisfied through outside partners or resources, as the scarcity issue is only temporary. Often, the underlying need is non-monetary in nature and might be solved by focusing on employee engagement (e.g., see our thoughts on Employee ENGAGEMENT MAGIC®).
  3. Attentive leaders do his or her best to respond by exploring one of the three responses to scarcity listed above – or maybe a combination of them— rather than making a knee-jerk reactionary decision that may not address the cause of the problem. For example, instead of layoffs to address immediate payroll woes, the answer might be that everyone takes an unpaid day off every other week. On one occasion, we witnessed a group of employees come forward to an organization which was about to go through a round of layoffs, offering just that—one week of unpaid leave per employee over a period of three months. Because options were explored, and employees felt heard, the organization was able to move forward without losing its most precious resource—people. On the other hand, is the answer always to reduce resource consumption (payroll)? Of course not! Maybe the answer is economic growth (more sales). Perhaps the answer is to focus your entire team on selling one key product that will produce revenue the fastest.
  4. A great leader explains the “why” behind the issue and the decision. More than just acknowledging there is a scarcity problem as described in step one above, a confident leader follows up that message with an explanation as to why the decision was made. Most of us realize that our wants are unlimited and yet our resources are finite. What we have learned, from macroeconomics, however, is that people will accept scarcity and inequality, as long as there is fairness of opportunity and equality in the process. A good leader understands this dynamic.

In summary, when looking through this alternate lens of scarcity, a leader might begin to see his or her role more clearly. And, he or she might start to see different solutions for solving the myriad of requests that filter up during the day. The solution lies not in making those requests go away but, rather, in realizing that the best approach is to take the time to ensure your responses are appropriate. When framed properly, scarcity of resources and its attendant solutions can be turned into teaching moments that solve problems and bring your team together.
Employee Engagement Survey