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How Do You Create True Leaders out of Ordinary Bosses?

Former U.S. President Theodore Roosevelt once said, “People ask the difference between a leader and a boss. The leader leads, and the boss drives.”

Are the management staff in your organization leaders or bosses?

The answer makes a difference to the bottom line. As with employees, some leaders are better than others; and much like top performers, top leaders contribute a disproportionate amount to company profitability. According to The Harvard Business Review (HBR), “Combined, [the top 10% of managers] contribute about 48% higher profit to their companies than average managers.

That’s partially because bad bosses affect everyone under, and around, them too.

Managers account for 70% of the variance in employee engagement scores, per Gallup, and contribute to the loss of employees. Worse, in the Workplace Productivity Survey conducted by the Society for Human Resource Management (SHRM), poor management was the #1 reason for diminished productivity.

The short of it: “Bad managers cost businesses billions of dollars each year, and having too many of them can bring down a company,” writes HBR.

But what defines a good manager? According to Gallup:

• They motivate their employees;

• They cultivate a culture of accountability;

• They build open, trust-based relationships; and

• They make decisions based on evidence and productivity rather than politics.

But their success isn’t just about what they do, it’s also about what the company does to support these leaders. Best practices for managing managers include:

• Making a concentrated effort to hire the best bosses;

• Providing adequate training and support to your managers and supervisors; and

• Pulling back on the micro-managing.

Also, be aware of the Peter Principle, or the concept that people will get promoted until they reach a position of incompetence. Remember, managing is a different skill from doing. There can be a tendency to say, “Peter is our best salesperson. If we put him in charge of the whole sales team, everyone will improve.” The problem is that the skills that make Peter great at sales aren’t necessarily leadership or management skills, and you can inadvertently promote him into a position where you simultaneously stop your best salesperson from making any sales and put someone in the management role who is not competent at management. For more information, read our article “How do you manage managers?”

Need more information on leadership in the workplace? CoAdvantage, one of the nation’s largest Professional Employer Organizations (PEOs), helps small to mid-sized companies with HR best practices, benefits, payroll, and compliance. To learn more about our ability to create a strategic HR function in your business that drives business growth potential, contact us today.