Why Leadership Fails When Systems Don’t Align

Great leaders are all around us. They’re in our organisations but do we choose to see them? If we see them, do we develop them? What about those with potential, how do organisations identify and nurture their future great leaders. Too often I’ve seen leaders, great and not so great, fighting against misaligned systems, processes, structures, reward. I’ve seen leaders expend massive amounts of energy just to stay where they are. I’ve seen those with high potential crushed by the daily urgencies of their roles or systemic requirements than drain their joy.

The great leaders are there; it’s our responsibility to see them, develop them and, critically, to ensure our organisations enable them to be at their best. Doing so means answering four critical questions:

1. Does your organisation have AND communicate a leadership model that sets clear expectation of leaders (this is how we do this around here)
2. Are your HR and talent systems designed to seek, develop, promote and enable people who model that expectation
3. Do you have both general learning and targeted develop programs to give those people the skills they need to formalise and grow their contribution to their team, and the organisation?
4. Are your other systems – financial, reward, performance management, procurement, sales etc – aligned to the expectation that’s been set? Or do they tell people that the leadership model is a nice to have and unimportant in the face of closing that deal or meeting this quarter’s budget?

I once worked with and organisation, a regional business of a large multi-national. We were partnering on question 3 and had done for a number of years. This was a high revenue, low margin business and they often fought for margin growth every year, revenue growth was rarely a problem. They realised that the key to margin growth was on the ground leadership quality.

One year the regional HR team were focused on developing a new behavioural framework for every level of role in the business from individual contributor to the MD. They consulted every part of the local business. They had regular updates with their parent company. They called this framework their “Leadership DNA” and it was communicated under the banner of “How Matters”. It wasn’t just about the result a leader achieved – how they got that result was equally important. That was the answer to 1. They built performance management and talent systems based on the “DNA”. That was the answer to 2. We worked with them to align the development programs to the “DNA”. That was a refinement to 3.

Helpfully, even before this “DNA” project was being worked on, the bonus criteria (which were owned the global parent company) always had an element of both performance and behaviour. They weren’t equally weighted, but bonus criteria did communicate the “how mattered” a little bit.

But then…

The week after the “Leadership DNA” was launched, new bonus criteria were also announced. And all behavioural requirements had been removed. Your bonus depended entirely on the result you achieved, not how you got it. For your bonus “how didn’t matter.” This misalignment (Question 4) killed the “Leadership DNA” project. After less than 6 months no one talked about it and it was quietly shelved (no more 1 or 2). We carried on working with the organisation on 3. And the misalignments of 4 would come up often. But the local team still believed in developing their leaders. They began to notice a worrying trend though. Almost half of the leaders who graduated development programs were leaving the business to go to competitors. They were the university for their competition.

Where were the great leaders? Working for the competition.

That was the catalyst for the parent organisation to realise they needed all four of those questions in alignment. Sometimes you have to pay a high price for progress.