Wells Fargo knows the cost of what the Wall Street Journal described as "tone deaf" and "irresponsible" leadership. It was forced to pay a whopping $185 Million in fines for overly aggressive sales tactics that produced thousands of fraudulent accounts for many of its customers. Apparently, nobody inside the bank saw this coming as aggressive sales tactics due to callous leadership stemmed all the way back to 2002.
According to Gallup, organizations hire managers lacking the right competencies for the role 82% of the time. Their research also indicates that "managers account for at least 70% of variance in employee engagement scores across business units". Although we rarely see scandals the size and scope of that at Wells, there are plenty of companies out there suffering similar threats from weak or untrained leadership.
What is ineffective leadership costing your business? Often the costs aren't obvious until it's too late. The truth can be staggering. Poor people management is considered one of the highest hidden costs in business today -- totaling billions in missed opportunities and draining profits. Consider just a few of the unrecognized consequences of poor management:
· Mismatching of skills to roles in hiring -- leading to increased turnover
· Lack of goal setting aligned to company strategies and values
· Hours of wasted productivity, errors and poor decision making
· Latent talent that goes unrecognized
· Absence of a unifying vision which reduces focus, purpose, and engagement
· Lack of collaboration and teamwork
· Conflicts among personnel as well as with vendors and partners
· Reduced customer satisfaction which affects upselling and retention
Because focus tends to be on "symptoms" such as these, the dots never get connected by HR or more senior management (which itself may need development as in the case of the Wells Chief Executive!). Consequently, hidden costs may go on for years. The underlying problem of inadequate management never gets addressed or happens only when sh!T hits the fan.
So, when you're wondering if leadership development is worth the cost and commitment consider the money that's likely falling through your fingers. Assessments are an ideal first step in evaluating management competencies and emotional intelligence at all levels. Identifying blind spots and areas for improvement form a sound basis for training and development strategies. It's is a great start to ensuring your organization isn't party to shocking statistics in the annals of management!
 Why Great Managers Are So Rare, Randall Beck and Jim Harter. Gallup; March 25, 201
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