2014 Trends: #8 Refocus on the Importance of Leadership and Culture

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We’re approaching the end of our Top Ten Trends series (see here and here for the most recent posts), and today we’ll tackle leadership issues.  Leadership has always been vital to defining organizational culture and setting a positive, productive tone. In the absence of such leadership – or worse – when leaders seem dysfunctional, employees and others become more and more cynical and disengaged.

For the last twenty years, NAVEX Global’s advisory team, the Ethical Leadership Group (ELG), has conducted employee focus groups to assess perceptions about leadership, culture and ethics. Over the years we’ve heard employees express doubts about their leaders’ understanding and commitments to values and ethics. One common theme is that leaders give lip service to ethics while continuing to apply pressure to meet goals and “do whatever it takes.” Another is that the ethics message gets lost as it travels down through the organization and that the “tone in the middle” is quite different from the “tone at the top.” As a result, employees often confide that they feel their leaders are being hypocritical when speaking about ethics and – as a result – employees “tune them out.”

Reiterating that lack of trust, less than one in five respondents in the 2013 Edelman Trust Barometer believe a business or governmental leader will actually tell the truth when confronted with a difficult issue.

Picking up on these themes, a recent Forbes article, A Crisis of Leadership – What’s Next? argued that 2013 was a particularly bad year for perceptions about leadership. There were far too many examples in politics and beyond of finger pointing and passing the buck. In fact, the author makes the case that we’re in the midst of a crisis so profound that we’ve “forgotten what leadership looks like.” If true, the consequences go beyond politics and may even affect our perceptions of leadership in general, and in our organizations. A leadership vacuum and the resulting rise of cynicism can impact organizations and undermine our efforts to build effective ethics and compliance programs.

While it’s good advice any year, 2014 may be an especially important time to pay attention to ethical leadership:

  • Conduct a candid examination of the how your employees perceive company leadership at the top and the middle.
  • Work with leaders to be sure they understand how their words and actions are being interpreted and what they can do to combat cynicism and the perception of hypocrisy.
  • ELG’s focus groups have identified one additional recommendation: employees appreciate unscripted face time with their leaders. For many there’s still nothing better than “managing by walking around.”

 

Topics:  Corporate Culture, Corporate Governance

Published In: General Business Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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