Bad Bosses are Bad News for Sales and Service

How costly are bad bosses?

A recent study has once again found that Australian business leaders' skills lag those of their American counterparts. Better management can have a big impact on a company’s overall performance.

One report says better #sales #leadership alone is delivering 13 percent higher revenues. "The results showing the association between management capability scores and firm performance are consistent and indicate that increasing leadership capability even at a moderate level has direct benefits for productivity …” the report authors found. Another report says sales teams being led by World-Class Leaders generate six times more than teams with the worst managers, and almost double that of teams with average managers.

For operational units, a team’s productivity or delivery is low when their manager’s coaching behaviour is lacking. Without coaching, frontline staff lose 87% of their skill and knowledge from training within one month. But with coaching, their skill and knowledge increases (Rackham, 1979). Combining training with coaching improves returns four-fold compared to training alone (CEB, 2005). And service teams led by the best coaches create 186% greater customer satisfaction (Zenger, Folkman, Sherwin, & Steel, 2012).

As separate research warns of growing market concentration in some of the nation's key export sectors, work done by the Federal Industry Department suggests efforts to develop new Australian firms will flounder without a boost in management ability.

Since managers are responsible for at least 70% of the variance in employee engagement scores across business units, when your managers become bad bosses, employee engagement will quickly decrease too - along with staff retention, absenteeism and other KPI (Gallup 2013).

How do industry segments compare?

The healthcare and social assistance sector had the highest management capability, followed closely by accommodation and food services. Miners also scored well. (Note: Some health care sector workers who've read this post gave me the feedback "Healthcare is good? You have to be joking, it's the worst!" The industry segment data was comparison between sectors rather than comparison against a benchmark. So, this feedback puts the other sectors in a very stark light and emphasises my point about the low calibre of leadership performance.)

The worst performers included IT, recreation, the arts, and the professional services sectors. Older companies with foreign ownership and engaged in innovation all scored better in terms of management performance.

What is the impact of bad bosses on staff?

Most people dislike their job. For example, only a dismal 18 percent of Australians can say they love their work, compared to 28 per cent of workers the USA, according to Gallup. Almost two thirds of Australian employees consider themselves to be emotionally detached from their employer, and so they just do the bare minimum: enough to avoid getting fired. And then there is the 20% who are actively disengaged. The ones who act on their dislike of the organisation and their boss. The ones you are paying to derail the company operations.

Sir Walter Raleigh (a 16th century English writer and explorer) wrote several centuries ago: "The employer generally gets the employees he deserves.” It seems to me that, in the last 400 years, we still haven’t learned this. A primary cause of zombie employees, according to the research, has not changed since Raleigh and is that many have “managers from hell”. The result is that staff become passive and emotionally vacant; physical bodies present in the workplace but absent in mind (lacking attention and positive intention). As one quote says, “It’s so nice when toxic managers stop talking to you. It’s like the trash took itself out.”

How do managers become ‘bad bosses’?

Often staff wonder what their manager does all day. The research says it’s usually administration, reporting, meetings and emails. They have what researchers refer to as ‘punishing schedules’ - days of long hours, limited control (decision making latitude that is restricted by tight bureaucratic controls through detailed rules and procedures), intense hard work, negotiation, conflict resolution and focus on performance measures that are often outside their control.

You can see that some of the causes of bad managers may not be the managers themselves. Research has suggested the three main causes are:

1. Lack of visibility. Lack of transparency that is the issue. Usually it is the thing that is enabling poor management practices through stressful work environments, minimal leadership training and a lack of accountability for poor leadership behaviour. The evidence suggests that senior leaders are content with how their front-line managers are performing, because they are blissfully ignorant of actual behaviour and the damage they’re actually causing. Further those same frontline managers are usually “unaware that they are a bad manager”. Some call this company culture; but it is the measurement and feedback blackhole that is the problem.
2. Managers’ emotional intelligence. These include those who do not know how to control their emotions, who allow personal problems to infiltrate the workplace, do not understand how they impact others, and the misfits - those leaders without drive.
3. Lack of qualification. This is a mix of formal tertiary education, leadership development and credible work experience and professional accomplishments. The latter often being most important in the case were people were promoted based on tenure vs. performance and ability.

How can bad bosses become good bosses?

It’s your frontline managers who are responsible for the Employee Experience, Customer Experience, Sales, Productivity and business performance you’ve got. They’re also the only people who can increase performance to where you need it to be. Moreover, they can only do this by following the right system - which requires coaching and leadership.

Unfortunately, the Corporate Executive Board has found that coaching is the activity that managers perform the worst (CEB, 2005). And unfortunately, even with all the best intentions, most companies fail to put in place a holistic performance management system. Instead, they implement isolated components. They train their front-line staff, run employee feedback surveys, or provide leadership training. However, these elements in isolation don’t deliver sustainable performance improvements.

In our experience you need a system of eight parts which work together to ensure you get sustainable improvements in employee experience, customer experience, sales and productivity. The eight parts of our system are as follows:

1 - Performance Measures

Most managers focus their frontline staff on improving performance in business results; over which their teams have minimal control. Measures such as sales revenue, average time to answer, and Net Promoter Score. Instead, they’d be better served by focusing their teams on the metrics over which they have significant influence. We call these the Objectives. These leading measures include sales conversion rate, average handling time and percentage of customer responses completed with target time frame.

2. High-Performance Behaviours

Most managers focus their coaching on the wrong things.

One of the problems is they coach on results, without providing behavioural specifics. For example, they'll ask their staff to ‘increase their sales' without being clear on what action or behaviour they need to do to improve.

The other problem is they're not coaching the behaviours that maximise performance. Think of any sales, productivity or customer experience measure you want to improve. If no work has been done to identify what your top 15% of high performing frontline staff do differently from your average performers, your managers won't know what to coach.

3. Coaching Techniques

The findings of research recently published in Harvard Business Review highlight an unfortunate reality most managers don’t know how to coach people. The study found that managers tend to think they’re coaching when they’re just telling their employees what to do (Milner & Milner, 2018).

Most businesses train their managers in only one coaching technique, at best. However, coaching is situational. This means your managers need to use different Coaching Techniques depending on the situation they face, and what they want to achieve. For example, your managers need to be competent in different Coaching Techniques to reinforce behaviour, correct off-track behaviour and guide team members. When this is the case, they’ll know how to coach to achieve the level of performance you need.

4. Coaching Rhythm

Most managers consider 'coaching' as something they infrequently do, in a meeting room. They fail to spend much time out with their team (in the office or the field), observing and coaching their people while they're working. Instead, your managers likely spend too much time behind their computers, doing admin tasks or in meetings, rather than providing the coaching their team needs to succeed. 

However, the coaching conversations that deliver the most significant gains in performance are those day-to-day conversations your managers have with their team members. Research suggests that high-performing managers spend more than 60% of their time providing coaching, guidance, assistance and support to their staff (Cahill, 2014).

Of course there is an element of individual time management and organisation time management culture here. The organisation must wants managers spending most of their time building high performing teams rather than doing administration - this will allow managers to stop doing what bad bosses do and start doing what good bosses do.

5. Coaching Training

Right now, it’s unlikely your frontline managers are skilled in High-Performance Coaching. This means they require training. However, it’s not enough to only train your frontline managers. They also need ongoing coaching to ensure their skill level remains high.

6. Coaching Tracker

Unfortunately, it’s not enough to specify the Coaching Rhythm your managers need to follow. Without visibility of your managers’ coaching activity, you can’t hold them accountable for taking action. We’ve found when this happens, coaching becomes infrequent, if it’s done at all. Your managers need to be using a mobile Coaching Tracker to quickly record the coaching they’ve done. This makes their coaching notes easy to refer to, and gives you real-time visibility of their coaching, so you can provide the support and accountability required.

You’ll want to be able to see coaching activity across your business unit and be able to dig down to the coaching each manager has given their team.

7. Coaching Survey

No doubt, HR runs an employee feedback survey in your organisation from time-to-time. These are great for assessing employee engagement and culture within your organisation. However, HR is seeking different information from you. Even though Googles’ data scientists identified the essential characteristic of a great manager is being a ‘good coach’ (Harrell & Barbato, 2018), employee feedback tools don’t assess the quality of coaching provided by your team leaders and managers. This is where you need a specialist tool.

Even if your managers are coaching consistently, that doesn’t mean they’re doing it well. You probably don’t have any visibility of the quality of coaching provided by each of your managers to their direct reports. Without this, you can’t hold them accountable for their coaching quality, or assist them to improve. Regular online coaching surveys provide the information you need to do so.

With a Coaching Survey, you can also see roll-up reporting of coaching quality across management groups and business units. This allows you to identify broader themes which you may need to address. At the same time, it allows you to assess its impact on engagement. You can add areas for improvement to a manager’s online Action Plan, of which you’ll have full visibility.

8. Accountability

Your attention is the key to achieving your strategic goals. To ensure you increase employee experience, customer experience, sales, or productivity you need to hold your frontline managers accountable for their High-Performance Coaching activity. This means you need to have a Coaching Rhythm in place, and have access to data on your managers coaching activity, and the quality of it.

Conclusion

To get sustainable improvements in employee engagement sales, productivity, or customer experience in your business, you need all eight parts of the High-Performance Coaching system in place. It’s taken us more than two decades of experience to develop and fine-tune it. And we don’t know of an easier, more reliable way for you to build a team of good bosses, high performing staff and to achieve your strategic goals.

About the author: Geoff Wade is the founder of Onirik World Group, a consultancy that helps organisations duplicate the expertise of high performers to drive performance improvement. Among the elements of their solution are systems and analytic tools to provide radical transparency of leadership and front-line on the job behaviour (with special attention upon the 5 to 7 habits that drive results).