Management Summary
As alternative career paths have hardly existed in Germany to date, many management roles have been filled by people who do not fulfil this role. This costs companies money. The Gallup study "Engagement Index 2023" puts this financial damage to the German economy at more than 150 billion euros. In order to minimise this damage for companies and develop leadership in such a way that it adds business value, we recommend the following approach:
- 360° feedback to analyse your leadership skills
- Executive Coachingto further develop your C-level leadership skills so that you are seen as a role model in the organisation and your actions are credible
- Assessment of other managers either through 360° feedback and/or job shadowing
- Selection of future managers and introduction of an alternative career path for specialists
- Development of a management understanding supported by all managers, which is binding and compliance with which is regularly measured
- Introduction of management tools that support and enable this understanding of leadership
- Integration of leadership quality into target and remuneration structures
- Introduction of a selection and Leadership Development process that supports the understanding of leadership
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"Quiet quitting" - the consequence of miscast leadership roles
The cost of inadequate leadership is often referred to as "quiet quitting", i.e. internal dismissal by employees and managers.
Internal dismissal, service by the book, is visible in various areas and can even be measured and quantified in some cases. These include
- Lack of acceptance of responsibility:
This leads to declining quality, an increase in errors, the covering up of mistakes, a decrease in suggestions for improvement and ideas, longer decision-making processes, unfulfilled promises, less proactive communication, limited cooperation and less cost awareness. - Longer decision-making processes:
In lengthy decision-making processes, more people deal with the same questions and problems for longer than necessary without reaching a conclusion. This is not only frustrating and leads to stagnation. It also ties up human capital that cannot be utilised for the further development of the company. - Days absent:
In 2023, sickness-related absences averaged 15.2 days per employee*. At 20 working days per month, these days of absence correspond to around 1/12 of annual work performance. This means that the sickness rate in Germany reached a new high after 2022.
Follow-up costs: Unrealised opportunities
In addition to the cost areas already mentioned, there is the lost contribution margin due to unrealised opportunities.
What are these opportunities and why are they not being realised?
- Too little commitment and time for innovation
- Too little courage for lean processes
- Too little courage to make unpopular decisions, e.g. by correcting wrong appointments
- Too little speed when it comes to introducing new technologies or working methods
- Too little courage to break new ground, to develop new innovative business models in order to ensure competitiveness
Underrepresented leadership skills in SMEs
In preparation for this article, I analysed the 360° feedback results we have been conducting since 2012 for senior managers in SMEs. This has shown which competences are rather underdeveloped.
These include:
- Clarity of purpose and objectives
- Visionary and strategic thinking
- Sound business management expertise
- Eliminating the need for your own person by creating adequate substitution structures and investing specifically in the transfer of expertise
- Self-confidence
- Empathy
- Conflict skills
- Decisiveness and
- Persuasiveness
The lack of competence in setting clear and convincing direction and creating structures that allow more time for entrepreneurial and management tasks leads to less targeted and productive work throughout the organisation. Measures are inadequately prioritised, the organisation is running at its limit but concentrating on the "wrong" things. The results are unsatisfactory and competitiveness is damaged.
This leads to more uncertainty at all levels, less empathy for each other and weakens everyone's decision-making power.
In order to break this spiral, it would take courage and the ability to deal with conflict, to swim against the tide and radically change things, but this leadership ability is also underrepresented.
How can leadership roles be filled correctly?
This process comprises 8 steps:
- 360° feedback to analyse your leadership skills
- Executive Coachingto further develop your C-level leadership skills so that you are seen as a role model in the organisation and your actions are credible
- Assessment of other managers either through 360° feedback and/or job shadowing
- Selection of future managers and introduction of an alternative career path for specialists
- Development of a management understanding supported by all managers, which is binding and compliance with which is regularly measured
- Introduction of management tools that support and enable this understanding of leadership
- Integration of leadership quality into target and remuneration structures
- Introduction of a selection and Leadership Development process that supports the understanding of leadership
It is important to us to support medium-sized companies in particular in realigning their management culture in order to attract excellent specialists and managers as employers and at the same time ensure their long-term competitiveness.
SMEs are the engine of Germany. If we want it to regain its "old vigour", we need to invest - not only in technology, but above all in people. The key to this is the understanding and quality of leadership.
Misplaced management roles cost money. It is better to invest this in the conscious selection and targeted development of your managers and be a role model for them.
This, dear managers, is not only important, but also urgent, as the Gallup study shows: Only 25% of all employees trust their management.
Let's make a difference together and lead in such a way that business success is achieved with less effort and employees and managers in your company find their way back to health and performance.
* Statista
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