(Photo illustration: C.J. Burton)

(Photo illustration: C.J. Burton)

Organizational Misbehavior

Are you grooming or stifling tomorrow's leaders?

Back Longreads Aug 1, 2009 By Rich Ehisen

With the national economy stumbling along like a wounded animal, the only steady growth these days is in the number of workers being shown the door. But while layoffs can be demoralizing, those workers who remain on the job may find “the Great Recession” to be a huge career booster.

Greg Harris, president of Quantum Workplace, an Omaha-based company that measures employee engagement, loyalty and retention for about 4,000 U.S. companies each year, says drastic personnel cuts have given workers who survive the axe a historic opportunity to display “upward leadership,” or the ability to influence their boss’s decision making. 

To some, that might sound like encouraging ambitious employees to become the dreaded office fanny-kisser. But Michael Useem, director of the Center for Leadership and Change Management at the University of Pennsylvania’s Wharton School, says leading up is not about “just currying favor with the boss.

“Leading up is not about personal gain,” says Useem, who has authored numerous books on corporate leadership. “It’s about making the people above you see the benefit of ideas that are good for the company.”

Whether that means finding ways to save the company money, coming up with new products or just motivating other team members, both Harris and Useem say the time is ripe for motivated workers to prove their long-term mettle.

“Sometimes upward leadership is merely assuring one’s formal leader that they are ready, willing and able for any challenge,” Harris says.

Useem adds, “This really is an unprecedented time for workers to have a greater impact on the success of their organizations.”

Both also note that successfully leading up also requires bosses that are willing to listen down by accepting input from their employees, which Useem says is specific to each organizational culture. He cites the recent history of investment banks Goldman Sachs and JP Morgan, where midlevel staff warned that subprime loans would ultimately cause them grief. Senior management acted on that advice, and both companies got out before the market eventually collapsed. Conversely, the culture at American International Group Inc. did not allow that kind of upward influence. Although AIG’s C-level management received similar warnings from their midlevel staff, the company chose to ignore that information.

“A culture of upward leadership is one that lets people know they can share bad news without being cut off at the knees,” he says.

Useem offers numerous other examples of organization cultures that allow and even prize upward leadership. The U.S. Marine Corps, for one, allows subordinate officers to challenge orders before major plans are approved, while Ford Motor Co. has a leadership program that trains midlevel managers to work with upper management to implement ideas and solutions to problems. In the early days of the Internet boom, legendary General Electric CEO Jack Welch wanted GE to get into e-commerce but realized that his older executives really didn’t understand the Internet’s potential in the way that younger, more technology-adept managers did.

So he created a reverse mentoring program that required he and 600 senior managers to team up with younger, Internet-savvy managers so the company could stay ahead of the digital curve. By requiring top company leaders to learn from younger staff, Welch made leading upward and listening down basic tenets of company policy.

Ken Endelman, CEO of Sacramento-based Balanced Body Inc., shares that perspective.

“We’ve always pushed our employees hard for feedback and always try to implement it,” he says. “We’ve operated on the premise that if somebody can take ownership of an idea, it will have the greatest opportunity for success.”

But overwhelmed bosses are not always eager for that kind of input, according to Roberta Chinsky Matuson, founder of Human Resources Solutions in Northampton, Mass. Chinsky Matuson, the former human resources career expert for Monster.com, says the pressure to turn profits in such a bad economy is making many managers and CEOs hold on even tighter to the company reins. 

“Fewer managers are paying heed to advice from their subordinates, primarily due to the sheer overload of work that must now be done with less people.”

Roberta Chinsky Matuson, founder, Human Resources Solutions

“If anything, I believe that fewer managers are paying heed to advice from their subordinates, primarily due to the sheer overload of work that must now be done with less people,” Chinsky Matuson says. “A lot of managers these days take the attitude that it is just easier to do things yourself, that teaching someone takes twice as long.”

Alicia Stammer, principal of Mikaena Consulting, a Sacramento-based organizational development consultant, also sees that hesitation in the corporate workplace. “Most organizations are tightening up,” she says. “Where people may have once had a free hand, now there is more micromanagement.”

But Stammer also notes that while layoffs can reduce a company’s total work force, departmental mergers may actually leave harried managers with more people to oversee, not fewer. She says that influx can make the boss even less inclined to listen down.

“That makes it likely they will track performance more closely than ever before,” she says. “They are going a lot more by the book.”

That book is not the same across the board, according to Ken McGuire, president and CEO of Horizon West Health Care Inc. in Rocklin. He says the guidelines that bosses are working under now are highly dependent not only on a company’s particular culture but also on its historical performance.

“If a company has previously struggled, particularly in a better economy, management is probably taking a tighter rein now,” he says, noting that his organization is spending a lot of time and energy now on figuring out how to lower costs. Although he thinks it is always beneficial to encourage employee input, McGuire notes that it is a tough time to create new career paths for workers. “Most companies are just not doing that,” he says. “Most are just battening down the hatches and trying to weather the storm.”

Even when things are good, however, the sheer size of an organization can stifle workers’ ability to be heard. Bogged down with layers of management, many large organizations struggle to adapt to even incremental change.

Alicia Stammer, founder and owner of Mikaena Consulting

Alicia Stammer, founder and owner of Mikaena Consulting

“The best thing in the world for a CEO is when someone steps up and says, ‘I know how to do this better,’” says Billie Blair, president and CEO of Change Strategists Inc., a Temecula-based organizational development group that works with Fortune 500 companies. “But large companies tend to become big bureaucracies, which don’t handle individual initiative very well.”

But while managers may feel compelled to focus on short-term solutions, Chinsky Matuson says that could leave iron-fisted bosses worse off in the long run. Although most workers won’t change jobs during a downturn, better times will create juicy opportunities at other companies for go-getters who bring a lot of creativity and energy to the table.

“People stay in their jobs during normal times because they feel they are growing,” she says. “They don’t feel that way right now. They will eventually flee when things get better, and a lot of CEOs won’t even know what happened.”

Chinsky Matuson says bosses who stifle employee growth are also risking their own careers. “When you are not growing new leaders, you are often perceived as not being a strong leader yourself,” she says. “And when opportunities to advance do arise, how are you going to move up the ladder if you haven’t groomed someone else to take your place?”

Stifled growth is demoralizing, but Sanjay Varshney, dean of the Sacramento State MBA program, says that shutting employees out of the decision-making process can also devastate a company’s bottom line.

“Morale can go down so quickly that it can spin out of control and kill the business,” he says. “That is why this is a time to let employees grow as a way of helping morale.”

Employee morale is tenuous anyway. A 2008 Gallup survey of U.S. workers showed that just 29 percent of the respondents were engaged in their job, defined as those who feel passionate about their work and connected to their company. An amazing 56 percent were unengaged, putting just their time and little else into the job. Another 15 percent were even worse: Not only are they unhappy, they make an effort to share their misery with co-workers and undermine company efforts.

15 percent of U.S. workers make an effort to share their misery with co-workers and undermine company efforts, according to a 2008 Gallup survey.

Those numbers, which have varied little over the past three years, are significant: A May 2009 Gallup survey notes that companies in the top quartile of employee satisfaction also have much higher customer advocacy, much more employee productivity and up to 12 percent greater profitability than those at the bottom of the ratings. Low-satisfaction organizations also experience more inventory loss, more on-the-job accidents and up to 50 percent more worker turnover. In short, engaged workers are happier workers, which makes for happier customers, which pumps up the bottom line.

So how do employers and employees find a happy meeting place where leading up and listening down can coexist, particularly if that dynamic does not already exist?

Steve Currall, incoming dean of the UC Davis Graduate School of Management, says most business programs acknowledge the need for more and better leadership training and are adjusting their curriculum accordingly. (Varshney, Useem and Currall say their programs already address upward leadership either directly or indirectly.) Meanwhile, most observers say there are plenty of common sense tactics that both workers and bosses can use to navigate uncharted waters.

“Before anything else, workers need to set aside the negative aspects of the current situation and remember that they have been chosen to stay at the company,” says Change Strategists’ Blair. “That happened for a reason, and workers should be enthusiastic and energetic and contribute as much as possible.”

Balanced Body’s Endelman says he has seen that enthusiasm from his own staff even though the company has had to lay off some production staff over the past year. “In this economy, people are appreciative about their jobs and try a little harder,” he says. “They are not so much just worried about their job but also the success of the company, so they seem to put more effort into improving process.”

But Mikaena Consulting’s Stammer warns ambitious workers not to forget to set realistic limits. “A worker may see this as a great time to take on big new challenges, but trying to do more than you are actually capable of doing is only going to make matters worse,” she says.

Currall says bosses are also far more likely to respond to a solid argument based on data rather than an emotional one. He too adds a major caveat, warning that no matter what workers think of their managers, they need to be “very, very careful about going over the boss’s head. Workers still need to respect the company’s culture.”

For employers, Chinsky Matuson says it is about getting the right people in place from the beginning. “You must hire people you can trust in the first place,” she says. “A busy CEO or manager can’t always be fixing people.”

Pride Industries President and CEO Mike Ziegler concurs, “It all starts with hiring really good people and then letting them do their job.” Ziegler notes that the Roseville-based company has been able to grow profits through the downturn, which he credits to having people who are totally committed to the company mission of creating jobs for people with disabilities.

Ziegler says Pride allows managers to set their own leadership style, so he believes anyone looking to lead up at Pride should simply be good at his or her job. “That gives you a lot of leverage in trying to influence your manager,” he says.

Quantum Workplace’s Greg Harris says his company’s data showed a decline in employee engagement for 2008, but nothing suggests employers are categorically opposed to upward leadership from their workers.

“When a house is on fire, nobody cares who is holding the fire hose; they just care that someone is,” he says. Harris also says that when the economy recovers, “some organizations will wake up and notice that their formal and informal leadership structures may have shifted,” with a lot of informal leaders likely taking official steps up the corporate ladder. Whether that happens with the original company or one of its competitors remains to be seen.

“The bottom line is that for aspiring leaders, this is the greatest career opportunity in a generation,” Harris says. “Those that shine in the coming months will become the most in-demand workers inside — or outside — their companies.”

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