What’s Really Costing American Corporations?

What’s Really Costing American Corporations?

The state of American business is always in flux. The economy is generally trending upward and right now many large corporations are enjoying success. Of course, not everything is perfect. There is always room for improvement. So what are the keys to even greater success? One of the biggest obstacles corporations face actually has nothing to do with business. Leadership is where many corporations suffer the most. The problem is there are too many leaders who don’t really lead. In other words, they don’t portray the right kinds of traits to truly help those they lead, and their companies, move forward.

Poor Leadership Is Costly

So how costly is poor leadership? According to an estimate from Gallop, lack of, or poor, leadership costs American companies as much as $550 billion every year. That’s some serious cash. So why are so many companies suffering from poor leadership? The simple answer is because leadership development is a fractured process. So what are the main problems that need to be fixed?

Promotion Process Is Broken

For starters, the promotion process in mostly broken. In most cases, managers and executives are promoted based on their previous positions and time worked at the company. Unfortunately, times served, does not equal great leadership. This promotion process tends to completely overlook quality individuals who could be great leaders, simply based on their lack of experience or tenure. Managers should be promoted because they demonstrate the ability to successfully lead.

Abuse of Power

When managers are promoted based on superficial things like tenure, they tend to feel entitled and they rarely act as quality leaders. In fact, they’re often abusive to their employees and only watch out for their own well-being. They rarely show empathy or compassion and no one trusts them. It’s their way or the highway, which leads to employee dissatisfaction.

Self-Absorbed and Self-Inflated

These types of leaders not only tend to be very self-absorbed, but they’re often very self-inflated, as well. This leads to a much higher opinion of themselves, which means they aren’t really in touch with what others truly think of them. This false perception hurts companies, because employees don’t want to work for self-absorbed or self-inflated leaders. Thus, both productivity and success decline.

Poor Training

Another huge factor of poor leadership that U.S. corporations face is the lack of quality training. There just isn’t enough quality leadership training. The training that does take place either isn’t sufficient or effective. Quality leadership training does have a positive affect on leadership effectiveness, which can greatly impact the workplace in positive ways. However, determining and finding quality leadership training programs and materials can be difficult.

Leaders Need These Qualities

So what can be done to fix all of this? The fact is if leaders possessed and portrayed four simple qualities they would make the corporate world a better, and much more profitable place. Leaders who are compassionate, trustworthy, truthful and selfless are the leaders that make the biggest difference in the workplace.

 

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Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com.  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

Alan L. Olsen, CPA, Wikipedia Bio

 

 

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