The Leadership Cancer: How to Recognize and Eradicate It from Australian Businesses

By Frank Cuiuli

In my time consulting to some of Australia’s largest and most successful brands, I’ve had the pleasure of meeting some really great people, including some incredible leaders. Equally, though, I’ve seen companies suffering from serious, deep dysfunctions, where the workplace environment literally makes people sick. Many of these enterprises are experiencing what I see as a “leadership cancer,” a business situation in which poor leadership infects operations, negatively influencing factors normally used to monitor Organisational health, such as efficiency, turnover and innovation. Left unchecked, this problem knocks stability away from the businesses, creating a domino effect that puts families, communities and the larger economy at risk.

 

Recognising Leadership Cancer in Your Organisation

Leadership cancer has several clearly identifiable symptoms. If you watch out for them, you can address the leadership problem and get your organisation back to wellness.

• The turnover rate for senior management is through the roof.

When companies don’t perform well or as expected, many of them simply choose to blame or shoot the management. They value traditional key performance indicators (KPIs) based on productivity above all else, failing to take into account that the lack of performance could trace back to something other than management’s ability to execute (e.g., poor customer service, lack of product innovation, etc.). Top executives in these companies usually react by churning their management teams, replacing workers over and over again. Eventually, the businesses might get their numbers up, but based on my personal observations, the boost is rarely because the new guys are doing anything different. It’s due instead to an accumulation of the effort the teams prior have invested and which has now matured to a point of success.

• Managing upward is an overly-common theme.

Managing upward, simply put, is developing a good relationship with your superiors, working to really understand them and make their job easier in whatever ways you can. There has been a great deal written about this topic in relation to how to succeed particularly in large enterprises. However, most managers do this purely as a means of protecting their personal reputation which in turn disrupts fostering a culture of safety, inclusion, transparency and deep inquiry. It inhibits to take a diligent approach to understanding and addressing underlying issues, aligning actions with core values and principles rather than only the revenue and profit scorecard.

Clearly, managing upward can be beneficial to corporations, which is why so many Australian companies actively encourage it. Even so, in companies with leadership cancer, the focus on managing upward becomes too acute. Employees spend so much time and energy on what they say to or do for executives and the board that they no longer concentrate on executing what matters (customer and employee experience).

• An “It’s about ME, not WE” attitude erupts.

Leaders in Organisations with leadership cancer typically have very large personalities or egos, which need constant feeding ground. People are tools to serve their success, and the followers the leaders attract are “mini me” followers rather than individuals who will challenge and question based on a set of core values and ethics. Instead of putting the resulting “I’m great and your not” attitude in check, the companies let it fester, allowing power bases and politics to drive promotion and growth. They celebrate the hero behavior, paying excessive packages to the so-called dealmakers while treating the rest of the Organisation as servants.

 

The Heavy Cost of Leadership Cancer—Why We No Longer Can Ignore It

The unhealthy nature of an environment with leadership cancer has an enormous cost. At the most basic level, it puts the infected business on unstable ground. As an example, a study by Lyubomirsky et al reveals that happy workers are 31 percent more productive than unhappy ones and have 23 percent fewer stress-related ailments. Other studies suggest that a positive attitude can pump up sales by as much as 37 percent. These kinds of statistics are significant because it is the leaders within businesses who serve as models for the good morale that keeps companies efficient and competitive. By allowing leadership cancer to grow, companies essentially guarantee workers will have a hard time and end up throwing their opportunities away. That can spell bad news for the larger economy, as there are fewer businesses competing, selling products and providing income to individuals.

Beyond this, leadership cancer’s effects spill over into the broader society, pulling down the wellbeing of communities and families. Research from the Australian depression service Beyond Blue shows that as many as 2 million Australians live with anxiety and 1 million suffer from depression. These mental health issues make it difficult to function on the job and maintain meaningful relationships with friends and family members. Work is certainly not the only source for these issues, but given how much time Australians spend in work environments, corporations should not turn a blind eye to the mental health of their employees. The need for businesses to take responsibility and recognize how unfit management teams transfer unnecessary stress to their employees is high.

 

So What Can We Do?

Leadership cancer can be pervasive, but it’s curable. Employees, leaders and board members all can do their part to eradicate it.

 

Employees

Put greater value on your contribution! Good people will always find jobs. Don’t accept an environment with leadership cancer as the norm and vote with your feet. Soon enough, the management team will get the message and, more importantly, you won’t be supporting the success of people who haven’t earned it.

 

Leaders

Choose to serve companies where members of the board and executive management are supportive of your leadership ideals. Good people will follow good leaders, so take the responsibility to lead them to environments that support your vision.

 

Board Members

Align your executives to KPIs heavily weighted toward employee and customer satisfaction.

If you want to validate ROI simply assess;

• The recruitment costs of replacing executive teams;
• The costs of rebuilding morale after dealing with the fallout toxic leaders leave behind; and
• The revenue and profit implication when losing A-list employees to your competitors.

Additionally, review the science! The evidence is clear that those under stress produce neurochemicals that inhibit cognitive function. Employees in this situation struggle to make clear decisions, make mistakes and expend huge amounts of energy rectifying errors. To make matters worse, employees tend to worry about the stress-related problems they have, creating a vicious cycle. The productivity overhead and direct costs as a measure of work output can be significant, especially for those knowledge workers whose decisions have a direct effect on customer experience.

 

Conclusion

Leadership cancer is a business condition that, in almost all cases, puts companies at risk. Recognisable through the me-versus-we attitude, excessive focus on managing upward and high turnover for senior managers, it has serious ramifications not only for individual corporations and the economy, but also for the general well-being of individuals and communities. Despite how widespread the problem is, all is not lost. Board members, employees and leaders all can take steps to fight it. No matter what role you might serve in your business, you have the power to cure the cancer and get good leadership in place.