I want to start this month’s newsletter with a cautionary tale.
In creating the Model T in 1908, Henry Ford proclaimed that he wanted to “build a motor car for the great multitude.” He achieved his vision, and by 1921, he was producing 56% of all passenger cars in the United States. He kept the price low, so the Model T was affordable and maintained profits through volume and efficiency.
Ford became hyper-focused on reducing production costs, so much so that he missed the consumer need for greater variety. Ford didn’t deviate from efficiency and failed to innovate and offer features like conventional gearshifts, hydraulic brakes instead of mechanical ones, and larger cylinder engines. By the late 1920s, General Motors and Chrysler started producing automobiles with these features. They steadily gained market share and eventually, the Ford Motor Company was third in sales in the industry, falling from number 1. Because of his single-minded focus on efficiency, Ford stopped experimenting and innovating and fell behind.
I’ve been exploring the intersection of learning and leadership as I write my book, Lead with Learning. Organizations want leaders and their teams to get results. It’s important at an organization level and to leaders and employees, who want to feel a sense of accomplishment in the work they do. Let me also be clear – results doesn’t have to be revenue. Results for a municipality could be meeting service level agreements for their residents. Results for a non-profit could be the number of meals provided or the number of homeless people served by their programs.
The risk highlighted by the Ford Motor Company example is that leaders value production and efficiency over creativity and innovation in their pursuit of results. Yes, production-focused leaders get results – at least temporarily. However, in an environment focused on production alone, there is little room for learning, curiosity and innovation. These leaders fail to build relationships with their employees and don’t prioritize their team members’ development.
The McKinsey report, The State of Organizations 2023, identifies that 33% to 60% of employees across different global geographies plan on leaving their jobs. Many of these are ‘quiet quitters’ who are unattached from their work and organization, fulfilling their basic job requirements but nothing more. And yet, organizations are unaware or out of touch with the reality. Most employers surveyed erroneously believed that less than 20% of the workforce were planning on leaving.1
Gallup estimates that low engagement costs the global economy US$8.8 trillion, accounting for 9% of global GDP.
So, while a sole focus on production will get results initially, over time employee engagement decreases, which means team performance declines and the organization fails to achieve results over the long term.
When leaders continue to focus on production at the expense of learning, creativity, and curiosity, they eventually stagnate. ‘Quiet quitters’ aren’t just looking for new work, they are actively leaving. Those who remain have low morale and poor performance. The leader is constantly hiring and looking for ‘bodies’ instead of skilled employees. Quality issues increase. Customer service suffers and complaints increase. The organization has lower revenue and increased expenses.
What’s the alternative? A development-focus. This includes:
- A mindset that encourages curiosity.
- An environment that supports taking risks, failing and learning from failure.
- A leader who cares for their employees as people and considers how they can develop in their current and future roles.
- A leader who approaches problems with questions instead of answers so their team can identify solutions and have ownership for outcomes.
In the short term it may feel like it’s just something more leaders need to do on top of their already full plates. The opportunity is to identify what leaders are already doing to support and connect with their team and call it out so they can build on momentum they already have. Leaders also realize they will need to shift their approach and that it will take time and effort. It’s like going to the gym and exercising new muscles. Initially you’re not very strong, but with practice, it becomes easier and you can do more.
Leaders I’ve worked with have shared that as they focus on developing their employees, two things happen:
- They get better, more sustainable results. There is collective buy in and effort for shared goals. Individually and collectively, team members have more skills and capabilities.
- The leader’s job becomes easier as their team is more capable. They can confidently delegate more work to their team, which frees up their time to work on more strategic work.
There’s a transition point when leaders move from a purely production-focused approach to leadership to a development-focused approach.
This transition starts with the leader’s mindset – their understanding of who they are as a leader – and having clarity of what the organization expects of them. That means owning their part in their employees’ development.
These leaders are curious and encourage curiosity in others. They consider different perspectives and explore multiple solutions to problems. In contrast to the production-focused leader, who doesn’t create room for learning, curiosity and innovation, this leader encourages experimentation and learning from failure.
These teams are changing their patterns of interacting:
- They challenge ideas not each other.
- They ask questions and listen.
- They feel there is abundance instead of scarcity and share their ideas as they collaborate.
- They take risks and support each other in successes.
- They share their mistakes and learn from each others’ failures.
As leaders continue to nurture a learning mindset in themselves and their teams, they become beacons inside their organizations for other leaders and teams to follow.
One leader I’ve worked with shared that at least six people on his team and other teams have said they will follow him if he leaves the organization. When I heard this, I felt it reflected two things:
- The organization doesn’t support its employees in ways that motivate, engage and develop them.
- This leader is a beacon inside the organization. He attracts and nurtures creative, productive and motivated employees.
Changing an organization’s culture with a top-down approach is extremely challenging. It takes a well-constructed strategy, deep commitment from top leadership and sustained action and support for transformation to occur.
Alongside a top-down approach, organizations can change their culture by shifting the micro-cultures leaders create on their teams. Individual leaders can become beacons like the leader above and provide a team culture of learning that’s rooted in care, curiosity and ownership.
Shifting leaders from a production focus to a development focus reminds me of this Darwin quote:
“It is not the strongest of the species that survives, nor the most intelligent that survives.
It is the one that is the most adaptable to change.”