20 Jan 2020

By Steve Watkins

Closed-door meetings and carefully-chosen words defined effective leadership decades ago. But today, enlightened, informed and accountable teams are needed to keep up in a global economy. And that requires a new approach.

Making teams accountable and getting the best from them takes openness and transparency. This might scare some managers, used to putting privacy first. But there are ways to frankly give employees the information they need to see how their work pushes the business forward.

Effective Leadership: Reap Rewards

Fear doesn't build trust. You'll win trust from your people if you level with them on the challenges the company faces. That will help you achieve success much more than if you're not forthcoming, says John Brandt, CEO of Cleveland-based management metrics research firm MPI Group.

"People like to work with people they like and trust," Brandt told IBD.

But you gain, too. When you're up front, you can count on your team to know how important their efforts are. And you don't have to spend time following up to keep them on track.

"Little acts that create trust also lead to knowing you can take risks together," said Brandt, who wrote "Nincompoopery."

For example, an enlightened team might develop new products without wondering who will take the blame if the plan doesn't work.

Tim Irwin, an Atlanta-based organizational psychologist and business consultant who wrote "Extraordinary Influence," often asks leaders how many feel their people can contribute more than they are. Almost all raise their hands. He urges bosses to use partnership accountability. This is where the leader tells employees he needs their help to reach the firm's goals. He encourages open communication and accountability from both sides.

Employees in turn are more likely to provide discretionary effort, that willingness to go the extra mile.

"I think a strong positive culture is a huge competitive advantage," Irwin said. "When people have bought into the mission, it makes a big difference and you get that discretionary effort."

Open Up

Transparency with your employees is vital to building trust and success. Brandt points to Peoria, Ill.-based shipping and warehousing firm Federal Warehouse, which went through a rough patch about a decade ago. The company realized some of its employees didn't know some of the company's locations were losing money. It applied open-book management, showing employees the financial data. But many employees didn't fully understand the numbers, so Federal Warehouse added a week of employee training to help them. And it added incentives that paid employees a chunk of profits.

It worked. Net income tripled in the first year and rose 30% the next year, Brandt says. Workers' compensation and damage claims dropped significantly.

"They didn't do anything new," Brandt said. "But they had people they trusted and trained them well in how they make money. Treated like partners, the employees acted like partners and everybody made more money."

Be clear about the purpose of your company, too, Irwin says. Maybe it's to be the world's best hotel company. Then you can set a plan, such as training all employees so they can respond to customer needs, and a goal, like reaching a 90% occupancy rate.

It's important to be transparent about those targets and show people how your company will hit them.

"Go back to the plan and make sure everybody knows their job," Irwin said. "Get them involved in setting the goal, too."

Set The Stage

Online shoe seller Zappos holds employees accountable while giving them power to make decisions. When employees start there, they work the phones and spend time in the shipping facility so they understand how the company works. Then it empowers employees so they can do what's needed to build repeat business.

"They do whatever they have to do to keep customers happy," Brandt said. "And they're held accountable for that."

Set the example of the culture you want. Irwin pointed to Tim Tassopoulos, the president of restaurant chain Chick-fil-A. He started as a teenager working behind the counter at a Chick-fil-A restaurant. He rose through the ranks and led with honesty and transparency.

"People love working for Tim because he's real," Irwin said. "He has done the job and he's an authentic leader."

Read the full article here.
This content was originally published by Investors Business Daily. Original publishers retain all rights. It appears here for a limited time before automated archiving. By Investors Business Daily

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