As the president of a busy executive search firm, I’ve observed thousands of leaders over the course of my 21-year run. Many leaders run amazing organizations that over time have grown considerably and been very successful. Others, despite the same economic conditions, have not fared well. In analyzing the differences, there are some key factors that are quite obvious, but certainly worth reviewing.
Successful leaders understand that you grow organizations through people. While you can make capital investments, technology upgrades, and so on, ultimately the people behind such changes are what make companies grow. The firms that win are those that focus on their people. This includes hiring, engaging, and retaining talent.
Companies that excel also have a defined culture, one built upon shared values from the leaders that are bled into the organization from the top down. A strong “people first” culture is embodied by interviewing, onboarding, and training to the organization’s values, so that leaders know employees’ core values are aligned.
Rethinking the performance review
Another critical factor we see at companies that grow through great people is that employees have a say in their careers. These firms engage them in establishing career paths. Employees lead goal setting and accountability to achieve not only what is important to the company, but also what is important to them throughout their careers.
The best of organizations, from our perspective, allow the employee—not the supervisor—to lead the performance review. The supervisor can then have an open dialogue about goal setting, expectations, and accountability. Moving forward, the employee will be accountable to his or her own career. Under this process, the main role of the supervisor during a performance review would be aligning values, not just evaluating performance.
Retaining Millennial talent
Retention continues to be another huge focus for high-performing leaders. Today’s leaders have a new challenge that we really have not had to deal with before—the generational difference between how the Baby Boomer generation thinks versus the Millennial generation and their “arrival” into leadership in mass numbers.
Baby Boomers dislike the very reward system they created, and they believe that Millennials are too “entitled.” Baby Boomers are not willing to transfer their institutional knowledge because they’re certain they will train the Millennials and then they will just leave anyway. After all, the average Millennial stays in a position from 18 months to three years. So in many cases, as Boomers retire the institutional knowledge they have is leaving with them.
Millennials see this attitude through a very different lens. They find Baby Boomers unwilling to try things in a new way. They seek an organization whose purpose is strong and makes a difference for other people. If they leave, it’s because they are stifled by a Baby Boomer who wants to focus on “I earned my stripes, you need too also.”
Companies need to communicate their purpose often to retain employees. By sharing this common ground, all generations can get behind what the organization does that helps others.
We’re frequently asked if compensation plays a role in happy, engaged employees. It does, but not as much as one may think. Overall, compensation plays less of a factor in retention than making employees feel motivated, significant, and worthwhile.
Leadership has its share of ever-changing challenges. But what is a constant is that those organizations that put people first always win first.
Managers who have effective leadership skills can not only manage efficiently but also inspire their people to achieve team goals.