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Warning bells for boards as pressure mounts on leadership

Fuseworks Media
Fuseworks Media

Latest research into the effectiveness of New Zealand’s private sector leaders should be ringing warning bells in boardrooms across the country.

Chris O’Reilly, CEO of AskYourTeam - a technology business recognised for its leadership and productivity improvement system - says the increased demand on leaders’ time and focus in the COVID-19 period is taking a toll.

"Our leaders have provided their people with remarkable stability over the past three years, as evidenced by consistency in overall effectiveness scores, but many leaders are struggling. Their responsibilities have expanded hugely, and as a result, they’re spread too thin, with a real danger of burnout.

"Our research findings and the conversations we are having with business leaders and senior HR practitioners around the country raise concerns about leader wellbeing. Urgent attention is required to make sure leaders are supported."

Leaders are affected by three key factors:

- The uncertainty of the business environment and the need to balance business outcomes with caring for staff wellbeing

- Increased disconnection from their team due to expanded responsibilities

- Living in a good news bubble, preventing issues being raised.

O’Reilly explains: "Directors and boards should be concerned. More and more is being asked of our leaders, and they are doing their best to cope.

"While they might have a wealth of talent and experience, our leaders have taken on the management of additional physical and operational tasks, as well as supporting the mental health challenges of their teams, as part of their day job. It’s a precarious balancing act, and it’s unsustainable over the long term.

"Boards need to be looking at leader wellbeing and making sure that mechanisms are in place to support leaders’ pastoral care. After all, it’s a health and safety issue and should be top priority because leaders are workers too."

The AskYourTeam report New Zealand Business Leaders’ Effectiveness 2019-2021: Navigating Through Disruption provides a summary of more than 100,000 employees’ assessment of their organisation’s overall effectiveness. The overall score is 67%, an OK rating, and a 2% improvement since the first survey in 2019, but there are areas that need to improve.

Gaps widen between leaders and workers

AskYourTeam poses the same questions of leaders and employees, with gaps widening considerably between the two groups over the past three years. AskYourTeam calls the gaps greater than 10% between leaders and their employees "blind spots".

O’Reilly explains: "Our experience of working with leaders shows that their perception of how effective their organisation is can be quite different to that of their team.

"What we’ve noticed over the past three years, and particularly in the COVID-19 era, is a widening of the gaps and an increase in the number of blind spots.

"Leaders and their teams are further apart than ever. This disconnection not only inhibits performance, it’s also a significant risk to the business. Leaders are unaware of threats and opportunities because their teams aren’t raising them.

"Not only that, leaders’ scores reflect a lack of self-awareness, and their blind spots risk becoming Teflon coated.

"Under pressure, leaders’ degree of sensitivity in reading and responding to indirect signals and cues from their teams may be reduced," he says.

This year highlighted a record 28 blind spots. Eighteen have been present over three years, seven emerged in 2020 and are still present in 2021 and three new blind spots appeared this year.

New blind spots related to enjoying working for the organisation, having regular and effective feedback and performance reviews and having clearly defined roles and priorities understood by individuals.

O’Reilly says that, aside from the perennial issue of remuneration, workers want better communication from their leaders and a safe place to speak up.

"Feedback and insights from people doing the job are invaluable, but unfortunately, workers aren’t confident to share unpopular truths.

"The risk is that leaders are missing out on leveraging their greatest asset - their people’s knowledge.

"This could prevent issues being raised early or even at all, and that could introduce additional risks to organisations."

A watch-out for boards

When combined with the increasingly positive view of leaders who are significantly more positive than the people they lead, there is cause for concern.

"Our insights suggest that leaders are living in a good news bubble and risk warning signals going undetected.

"Boards need to be aware of this trend and make sure they are asking the right questions of their CEs, piercing the good news bubble and countering over-optimism.

"Only then will boards be able to accurately assess and manage risk," says O’Reilly.

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