The impact of poor leadership stretches far beyond company culture. According to a Gallup survey, 70 percent of employee engagement is directly influenced by managers. Additionally, company cultures with low employee engagement produce the highest turnover. With these statistics in mind, it’s safe to say that company leadership, whether good or bad, trickles down. If a company is underperforming or not meeting expectations, the cause can nearly always be traced back to leadership. Company leaders set the tone, the pace, the culture, and the overall expectations for a company. But, it’s not enough for managers to “point the way.” They must lead by example. If company leaders fail to do this, the results are often disastrous, decreasing profits and increasing turnover.
How Poor Leadership Influences Employees
Company leaders must understand that they affect more than just their employees’ moods. Poor leadership can cause the downfall of a company in several ways.
A Wayward Staff
Indecisive, impulsive leadership can cause a severe lack of direction for the staff. If employees don’t know where the company is going, they can’t be expected to get there. Although being impulsive can sometimes be considered a positive trait (i.e., making tough decisions on the fly, momentary bursts of inspiration, etc.), it seems that when it comes to the staff as a whole, it does more harm than good. When company expectations are constantly changing or rearranging, employees don’t know where or how to extend their efforts, resulting in indifference, the last thing a good leader wants from their staff.
Unstable Environment
Companies need strong leaders to establish a solid foundation on which to grow. Unfortunately, incompetent leaders tend to paper over issues rather than address the root causes. When this happens, employees feel the impact. With random tasks, sudden deadlines, and poorly communicated expectations, employees may feel they are being set up to fail. When they do inevitably fall short, company leaders rarely take the blame, instead focusing it all on a befuddled employee. This lack of security in the workplace will cause good workers to start searching the job boards. Employees need a consistent, reliable company culture to focus their total energy on their performance.
Low Company Morale
It’s not surprising that low morale is one of the direct results of poor leadership. Unreliable leaders who aren’t mentally or emotionally tuned into the company culture set a negative tone. Without respect and validation, employees feel neglected and can grow resentful. A resentful employee will not yield the same results as an employee who feels understood and valued by company leaders.
How Poor Leadership Affects the Company
No one wants to work in a constantly changing, unstable environment where their efforts go unnoticed. When this happens, employees will look elsewhere. High turnover has astronomical costs for companies. According to Gallup, the cost of replacing one employee ranges from one-half to two times that employee’s annual salary. And that’s not including the loss of productivity and the hit to staff morale. When one employee leaves, the others will get curious and start considering it themselves.
Work With Us
If you’re ready to improve the leadership in your company, work with us at Maximum Accountability. Our expert leadership training will teach you how to increase productivity, attract better workers, and improve the overall employee experience. We’ll give you the tools you need to become a high-performance leader. Take the first step toward excellent leadership, and contact us today.