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Action University Summary (May 10, 2017): Leaders Eat Last: Why Some Teams Pull Together and Others Don't by Simon Sinek

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leaders eat last coverAn argument for better leadership

Before we start today, I have a request. Please don’t shoot the messenger. You see, I’ve read Simon Sinek’s latest book - Leaders Eat Last - and I’m scared.

Your Leadership Style is Killing People

It turns out that your leadership style is killing people. Not in a “man, that guy is killing me today” kind of way, but in a “people are having heart attacks and dying because of you” kind of way.

That would seem a little heavy handed if it weren’t for a study at University College London that concluded that people who don’t feel recognized for their effort at work were more likely to suffer from heart disease.

So, if you accept the fact that good leadership includes recognizing people for their efforts, you’ll have to agree that poor leadership is actually killing people.

(There’s a nice long section in the book on exactly how the body reacts to stressful work environments, but I’ll leave you to read that after you’ve bought the book).

That’s fine, you say, but my mama always taught me that if I don’t have anything nice to say about people, to not say anything at all.

Well, here’s another shocker for you. Gallup conducted a poll in 2013 called “State of the American Workplace” that concluded that when our bosses completely ignore us, 40 percent of us actively disengage from our work. That’s not the shocking part, however. The shocking part is that if our bosses criticize us on a regular basis, 22 percent of us actively disengage.

I was a math major in college, so I know that amounts to an 18 percent increase in engagement when somebody is criticized on a regular basis rather than simply ignored.

Your leadership style is killing your business, too

In the business world we obsess over numbers. In a world where it seems like almost everything can be reduced to a number (how many Facebook friends and Twitter followers do you have?), it’s easy to forget that the only way that anything gets done in business is through and with other people.

So when and how did we replace human beings with numbers?

Sinek says that it was on August 5, 1981. That was the date that Ronald Reagan fired more than 11,359 air traffic controllers. PATCO (the union representing the air traffic controllers) had threatened to go on strike, and in preparation for that eventuality, contingency plans were put in place to ensure that the entire travel system didn’t grind to a halt. When it became clear that the people working under the contingency plan did an adequate job, the axe fell.

On that date, Sinek argues, Reagan created the precedent for protecting commerce before protecting people.

The most revered business leader for the rest of the next two decades was Jack Welch, who earned the nickname “Neutron Jack” for his relentless focus on “shareholder value”. He became notorious for firing the bottom 10% of his managers (the ones that contributed least to the share price) while giving the top 20% of his managers (the ones that contributed most to the share price) stock options and bonuses.

Welch would eventually admit that “on the face of it, shareholder value is the dumbest idea in the world”. But that did nothing to stop our relentless drive to measure more and more, and run our businesses based on “the numbers”.

Here are a just a couple of examples:

While she was at Google, Marissa Meyer famously tested 41 shades of blue to find out which one made people click more often, and thus make Google more money;

The most popular business theory at the moment is The Lean Startup, which includes things like “innovation accounting” and “cohort analysis” to help a business understand whether or not they are on the right track.

Employees are numbers. Customers are numbers. We are all just numbers. And when everything gets reduced to numbers, bad things happen. Not right away, but eventually.

Focusing solely on the numbers has costs that aren’t immediately apparent. For instance, according to a report by Mercer LLC one in three employees seriously considered leaving their jobs in 2011. That would be fine if they actually left. The real problem is that all but 1.5% of people voluntarily left their positions in the same time period.

If you’ve ever been around somebody who is actively looking to leave their job, you’ll know that their level of productivity is pretty low.

But it gets worse. Another study done by Gallup suggests that 70% of American workers are “not engaged” or “actively disengaged” from their jobs. They estimates that active disengagement costs the U.S. $450 billion to $550 billion per year.

I’ll let you do the math to figure out your share of that burden, but let’s be clear - poor leadership is costing your business money.

The solution isn’t more cheerleaders, is it?

In the forward of the book, George J Flynn - a retired Lieutenant General from the Marine Corps, has this to say about Sinek:

“His vision is simple: to create a new generation of men and women who understand that an organization’s success or failure is based on leadership excellence and not managerial acumen.”

The danger in reading statements like these - and leadership books on the whole - is that they seem to excuse managerial acumen, and turn the role of a leaders into a glorified cheerleader.

However, if you’ve ever spoken to somebody who works for a leader who has no managerial acumen, you’ll know that those types of leaders get no respect.

Neither managerial acumen or leadership excellence is enough on their own. Stephen M.R. Covey would tell you that even if a leader is sincere and honest, you won’t trust them fully unless they get results.

So leaders without business acumen isn’t the answer, either.

The solution is to eat last

As Sinek points out in the book, leadership is not a license to do less - it is a responsibility to do more.

Jim Sinegal understands this well. You might not know his name, but you’ve probably shopped at one of his stores - Costco. He co-founded and ran the company from 1982 until his retirement in 2012. In many ways he was the “anti-Welch”. He believed that if you treated your employees like family, they would respond with trust and loyalty.

It wasn’t easy. He took a lot of heat from Wall Street analysts who said that he was “too benevolent” for refusing to force employees to take on a greater percentage of healthcare costs. Another analyst said “it's better to be an employee or a customer than a shareholder."

Could he have generated more profit out of the company in the short term, like Welch did? Sure.

But if you look at the share price of GE and Costco from 1986 to today, you’d see something very telling. GE’s stock fluctuated wildly from year to year, while Costco’s stock rose gradually and steadily over time. If you invested your money in GE in 1986 your return would have been 600% if you cashed out as of the publication of this book. Your investment in Costco would have returned 1,200%.

Sinegal knew that good leadership was playing the long game. He knew that putting the good of the team ahead of his own self-interest was the only way to deliver value in the long run. He knew that the culture at his company was critical to it’s long-term success. He knew that a positive culture required that Costco’s employees trust the leaders, and vice versa. He knew that he needed to spend time with his employees to make sure that they felt valued and heard.

Many of these points you would have heard before. But now they are backed up by science and numbers to show you that good leadership means better performance.

But it’s also backed up by one of the best leadership metaphors ever created: leaders eat last. In the Marines (not a place you could accuse of being “warm and fuzzy”) the leaders actually do eat last. True leaders, they believe, put the needs of the people they lead above their own.

The irony in all of this is that your best bet for creating success for yourself over the long run is by subverting it to the needs of your team today.

Your choice is simple - are you going to be Jack Welch or Jim Sinegal?

 

 

 

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