Our leadership crisis is punching us in the mouth

Look, I’ll come right out and say it: we’ve got a leadership crisis in a lot of parts of this country -- and hell, even the world.

Sure, sure. We all know about the so-called visionaries like Jeff Bezos. His company prints money, or at least prints growth -- even though it might well be a terrible place to work. We know about Jack Welch and Steve Jobs, and we deify ‘em. We love Marc Benioff and Jeffrey Immelt, and when they give a speech, we rush to watch it. Reed Hastings has all the answers!

Those are the so-called leadership unicorns, and honestly, we don’t even know if those guys are good leaders unless we work at their companies and have some interaction with them on projects and deadlines. Otherwise, it’s all just external perception, typically tied to “Their companies make a lot of money.”

The reality is this: most companies, whether they make a lot of money or barely cover payroll month-to-month, have leaders that range from average to extremely below-average. On rare occasions these businesses have outstanding leadership.

I primarily work in the fitness industry. I’ve met some amazing people, great leaders, and lifelong business partners and friends. I’ve also, admittedly, met my share of absolute train wrecks.

This isn’t breaking news -- we’ve all worked for miserable bosses and been appalled by clueless CEOs -- but there are a couple of key points I think some people gloss over. Let’s correct a few right now.

The Incompetence Fear

Here’s some information from HBR about CEOs and their greatest fears. The study only focuses on 116 CEOs, and you can grouse that it’s a small sample size. It is. But the 116 CEOs consented to in-depth interviews afterwards, and getting a lot of time with a CEO to discuss their fears and dreams and hopes, however fluffy that might sound, is a big deal. They are some of the most time-pressed people in the world.

Their five biggest fears, in order, were:

  • Incompetence
  • Underachieving
  • Appearing too vulnerable
  • Being politically attacked
  • Appearing foolish

No. 1, No. 2, and No. 5 are very closely linked: you don’t want to be seen as a fraud.

I’ve run companies, started companies, and worked with hundreds of people who have done the same. I’d confirm this is often the biggest fear.

Here’s a paragraph that will make you weep:

Many of their quotes are poignant and telling: “Greed. It controls everything.” “If someone told the truth they would be isolated.” “You’ve got to look virile.” “You know what? [A new CEO] was frozen by fear. He couldn’t think straight.” “He [the CEO] would publicly humiliate them, bully them [senior executives].” “We are competitive so there is less honesty.” Five executives in their 50s (four of them millionaires and all with stable families) admitted that they feared retirement.

“If someone told the truth, they would be isolated.”

Hell of a way to run a business, eh?

Here’s the problem with the incompetence fear: when you manage from that place, you tend to cling to the things you know (or think you know) -- because it’s less likely you will be seen as incompetent there. When you cling to the things you know, two other things happen. Neither are good. They are:

  • You become a micromanager.
  • You ignore new opportunities.

That second bullet is particularly miserable, because …

Business models are evolving like crazy

This isn’t rocket science and I think we all get it. Digital has been a massive player. In 1997, Google barely existed. Now Goo-- er, Alphabet -- has a massive market cap. Chances are you use some form of Google in your business, be it email, apps, a company they own, or just by searching for information. By definition, then, your business is different than it was in 1997.

You could say the same about another “core five” company: Microsoft. Even about a decade ago, they were predominantly about Word and Excel. Now they’re essentially a cloud company.

As they say in Varsity Blues: “Things change, Mox.”

You see this in my industry; the fitness business. Even a decade ago, the gym model was “build the structure, insert cardio equipment, and people will come. You charge those people membership dues and maybe offer them some classes. After a while, you get back what you put in. You might even be able to franchise the concept out if you're lucky!"

While the bricks and mortar delivery system of basic memberships still exists, we now have the digital delivery of classes, mobile fitness apps, wearable platforms and even AI personal trainers. We’ve been in the venture game for “fitness tech” for a half-decade.No one necessarily saw that coming 15 years ago.

Now combine the first section with this section.

Here’s where you land:

  • Business models are rapidly shifting and changing, right?
  • Most so-called “leaders” are clinging to what they know; in essence, they’re holding on and hoping to ride it out until someone else has the most accountability for the brand

That’s an intersection point with a lot of car accidents.

In addition, because of how we view hierarchy -- in absolute, must-be-respected terms, often -- there’s very little incentive for C-level leaders to evolve their own skill sets. Managers, per research, often rank self-improvement or skill addition near the bottom of their priority lists. This has created a world where, for example, many CMOs have absolutely no clue about digital marketing.

Think about that: you “own” the marketing, branding, and messaging for your org. But because you don’t understand digital and can’t be bothered to learn the skills for it, you’re essentially ignoring it and hoping it goes away. Unfortunately, because we currently have more mobile phones on Earth than people or toilets, it’s probably notgoing away.

We love to talk about how businesses must be growing -- or they’re dying. Why don’t we feel the same way about leaders?

The Profit Fallacy

Line up 100 leaders and ask them “What’s your core responsibility?” You’ll likely get answers along these lines:

  • Profit
  • P&L
  • Revenue growth
  • Keeping stakeholders happy
  • Making sure my team hits targets
  • Solving problems for the customer

Most, though, would involve money. That’s only logical. I want money too. We live in a world of global commerce. It’s necessary.

If you’re a big fan of management approaches, you’ve probably heard of Peter Drucker. Well, back in 1973 he famously said that the only function of a company was to create a customer.

If you move that logic forward, you need to understand this. It seems semantic, but it’s very important and many leaders ironically miss it entirely:

  • Profits and share prices … wait for it …
  • … are the result of organizational action … pause …
  • … not the goal of organizational action

The goal is to provide a product or service that benefits a customer. You create that customer, retain them, and maybe even get referrals from them. That’s the goal.

Because you achieved that goal, the result is profits, revenue, and potentially more scratch (bonuses!) for yourself.

Most leaders miss this and have an unabashed pursuit of money. You’re seeing this right now with Epi-Pen. Trust in companies is dropping globally -- it’s about 46% right now and even less by other accounts and a large reason is because this misguided focus on profits as the be-all and end-all for organizations.

Profits mean you’re doing the core things right (but not necessarily for the long-term). They aren’t the core thing, though.

The “Do vs. Say” Issue

This rears its head everywhere. Some examples:

Hiring: What do executives say? “We need A-Players! There is a war for talent!” OK. What do executives do? Kick it to HR, which is a department nary an executive cares about, and bury the whole thing in automation and ATS systems that screen out the best people.

Core Values: What do executives say? “We are a mission-driven, purpose-laden organization that is driven forward by its core values every day!” What do executives do? Stick a bunch of nouns and adjectives into all-hands meetings, tack a list of ambiguous sentences on the wall, and go back to chasing profit.

Strategy and Execution: What do executives say? “This is our strategy and our five main goals for the year!” What do executives do? Fail to prioritize or align that strategy for anyone including their own lieutenants -- shown by research -- so that rank-and-file workers are arriving on a Wednesday, sitting at their desks, and having no idea what to do for the whole day to move the company forward.

If you want to be a good leader, your words and your actions need to align. But, unfortunately, that’s not very common.

How do we solve it?

Ah-ha! That’s for next time, friends. (I needed a cliff-hanger, right?)

See the original LinkedIn blog post here. 

Bryan O’Rourke is an entrepreneur, consultant, executive and investor, successfully advising and driving global brands for over 30 years. He has presented as a keynote speaker at industry and corporate conferences on four continents. He is widely published and quoted in periodicals like Inc. Magazine, the Wall Street Journal and the New York Times. Bryan recently contributed to a book with other European thought leaders Growing The Fitness Sector Through Innovation . Visit his website for more info.