3 Shrewd Ways Leaders can Improve Financial Results

It’s trendy to talk about company culture these days. The trend might make people think today’s leadership focus should be on hugs over financial performance. Not true. At Voyage Consulting Group, we help leaders connect company culture with the financial results (among other things).

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Think about the best leader you’ve worked for and how they impacted you and the company.

Some benefits of effective leaders you may have noted include: positive morale of their team, consistent high performance—their own and their team, focus on results, effective response to change, and more. Effective leaders can transform work environments and push their teams to accomplish feats that wouldn’t be possible without their involvement.

Leadership is the most influential characteristic of a company’s finances and here are three ways leadership shrewdly impacts financials:

 1. Effective Leadership Reduces Turnover

Data regarding employee turnover rates due to poor management was published in our whitepaper, Leadership Now: How to capitalize on the complexity of business. Bad managers are the number one cause of employee’s decisions to leave their employer in search of new opportunities.

Replacing those employees is expensive. Employee Benefit News revealed in a 2017 study that it costs employers 33% of a worker's annual salary to hire a replacement if that worker leaves. Think about the extensive human and financial capital required to hire new employees, onboard them, and speed up their contribution to your company. Such important tasks consume a significant amount of a company’s finite resources, but this burden can be lessened significantly by reducing turnover.

 2. Effective Leadership Faces the Facts

Effective leaders need to possess self-awareness if they are to be a financial asset to the company. An effective leader will be able to ask, “How am I doing?” Being honest about company and individual performance helps their company set reasonable benchmarks, gauge current performance, envision the future, and rally their team to reach for the vision.

When leaders are in denial and not dealing in facts, people around them focus on them instead of on the facts. Effective leaders see the truth, which enables a faster, more relevant response than denial.

 3. Effective Leadership Creates Brand Excitement

Organization leaders are visible representatives of their company brand. Stakeholders from employees to customers to investors watch leaders to determine how the company is doing, and they take their cues from those leaders. Leaders with an energized sense of enthusiasm create excitement for the brand, which converts into income for the company.

Sir Richard Branson is an example of creating brand excitement. He has been an effective leader who has improved the financial results of nearly 400 different companies. His passion, determination, and positivity have yielded tremendous success for the Virgin Group, and his example as a brand ambassador is one worth modeling.

Set an example you personally would like to follow, and you will intentionally influence your company’s success and financial performance.

The intention of this post is to help inspire organization leaders to be excited, passionate even, about their leadership role. Don’t underestimate the impact your leadership has on those around you. Recognize your influence, and you can shrewdly impact your company’s performance beyond the obvious ways.

What do high heels say about your company culture?

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Have you ever dressed up a little more than usual for work and had your peers mock you? “Do you have a job interview today?” “Who are you sucking up to?” “Do you think you’re a big shot?” Have you done the mocking?

Recently a professional woman told me people generally are not mocked for dressing up, but women are, especially when they wear high heels. Cher (not her real name, obviously) described her workplace as a very professional corporation. She said a colleague wore a tailored outfit and heels to coordinate with it. The men criticized the women, but most of the female colleagues thought she looked great. The men spoke badly about the heeled woman’s shoe choice, and Cher said it affected their perception of the woman’s work.

We could talk here about wardrobe and sartorial philosophies, and we may sometime. We also could talk about first impressions. But, today, let’s think about what’s happening in the culture where a shoe choice leads to a diminished reputation.

We’ve heard for years about the importance of shining one’s shoes and the judgement of scuffed shoes. It’s even included in the Secrets of Seasoned Professionals book. In 2019, though, it was surprising to hear how professional high heels cause a similarly negative reaction.

The woman was dressed professionally, not like she was heading out to a club for a party. With nothing to criticize about the wardrobe, those looking to judge her were left with her shoes.

Does heel height equate to intelligence? Or, work ethic? Or, customer focus, project management, or strategic thinking? No. No. No, no, no.

So, why, then is heel height accepted at a professional workplace as criteria for judging someone?

A culture that enables, allows, or encourages heel height as criteria for determining someone’s contribution or potential has issues. It’s not about the shoes. The heels are simply exposing other issues within the company. Someone ought to pay attention to what’s mocked so they can positively influence how coworkers perceive their teammates. Mocking will diminish engagement and could lead to highly qualified contributors walking their heels out the door.

HR is not Burger King

Last month I kicked off Kansas City’s DisruptHR event with a talk called HR is not Burger King: How to stop letting people have it their way without being a jerk. DisruptHR is a unique event in which the speakers get five minutes to share twenty slides that rotate automatically every fifteen seconds. The audience is full of energy, as they’ve been eating and drinking for two hours before the presentations begin. (I waited to imbibe until after mine and was happy to go first!) Keep that in mind as you watch the video of my talk:

 https://vimeo.com/album/5545087/video/299125940

In five minutes, I couldn’t go into any more about the analogy but had the opportunity to talk with people about it since the event. Some people were concerned that I advocate for HR to stop providing stellar service to colleagues. Nope. That’s not it. Here’s the difference:

  • Here’s Burger King: Hold the pickles? Sure! Hold the lettuce? You got it!

  • Here’s Burger King if HR people ran it: You want Chateaubriand ? Sure! You want white tablecloths? You got it! You want a private room? No problem!

See the difference? Burger King offers to accommodate very simple requests within the boundaries of its business model. Frankly, McDonald’s and Wendy’s would do the same things for a customer who asks. Exceptional service does not mean taking orders from coworkers whose requests are far outside the boundaries and who don’t know the full implications of their requests.

For example, in the video, I share a real example about a colleague who demanded HR re-evaluate a job and rate it higher so her candidate’s salary demand could be met. When HR did that, the colleague didn’t think through how her peers or the candidate’s new peers would see that move. (They hated it because the candidate’s lack of preparedness caused extra work on their parts.) The colleague also did not think through how the rankings of all jobs would come across after that. (They lost all credibility.) HR came across looking like we just made up rules and our policies didn’t matter.

When we say “No” by saying, “Well, that’s the policy,” credibility is further eroded. It looks like we’re saying, “No” just for the heck of it or because we’re too lazy to think through a different solution. It would be better to discuss the implications of the requested action than to outright reject it because of the policy—that would be better service.

At its best, HR provides important oversight into many people-related aspects of a company. At its worst, HR diminishes the people-related aspects by taking orders from people who don’t think through the business implications of it all.

HR can provide relevant service and lead the way to solutions. It doesn’t need to take orders like it’s the counter at Burger King.

(By the way, DisruptHR Kansas City was fantastic! Click here to check out the rest of the speakers for more great ideas!)