Break the cycle: Leadership to be proud of

Leaders and managers have often struggled to deal with their staff losing motivation at work. In a two-page extract from his new book Built to Grow: How to deliver accelerated, sustained and profitable business growth, Royston Guest explains how leaders can break this cycle by using Pareto’s Principle – commonly referred to as the 80/20 rule

A loss of commitment and drive

John doesn’t feel the same about work anymore. Something’s changed. He used to approach it with commitment and drive, happily doing extra hours because he believed in where they were going and what they were doing as an organization. They were in this together. But now things are different. A new management structure has made him voiceless and depressed. Decisions he was once part of are now made behind his back. And the result? Discretionary effort; going the extra mile; working beyond contractual obligation have been withdrawn. Emotionally, John has checked out. The good will has gone. He takes more sick days now.

This hypothetical example describes a common and real scenario in businesses and organizations all around the world today and, worryingly, for many it may be considered the norm. You may not even realize, but the chances are high that within your own business you may have at least one John, perhaps even more. For leaders and managers one of the greatest assets of your business walks out the door every night. What are you doing to get them to return next day inspired, motivated, and enthused to be the best they can be? 

Pareto’s Principle

Answering this question starts with a recognition that a ‘one-size-fits-all’ style of leadership and management will not crack it today. A great principle to demonstrate the importance of this is Pareto’s Principle, more commonly known as the 80/20 rule. If you’re new to it, it’s a formula developed by Italian economist Vilfredo Pareto in 1906 to describe the unequal distribution of wealth in his country, observing that 20% of the people owned 80% of the wealth. Over the years, it has been observed that the 80/20 rule can be applied almost anywhere.

For example, it’s often the case in organisations that 80% of revenue and profit comes from 20% of customers while the majority of customers (80%) deliver comparatively little revenue and profit. Applying Pareto’s 80/20 rule to your organisation as a leader/manager provides some interesting insights. Here’s how it works:

  • 20% are top performers
  • 70% are the heart and soul of your business and . . .
  • 10% are disruptors

The toughest part for leaders and managers is adjusting their leadership style according to the three categories. How you lead and manage a top performer will be completely different from how you lead and manage a disruptor.

Experience tells me most leaders get drawn into spending a disproportionate amount of time in the 10% category. Just like the bottom 10% of customers in the Pareto sales example who contribute the least profit and are the most problematic, so are the disruptors within your organization. There’s no sugar-coating this – most of the time the people who fall into this category are just not right for your organisation. If you have a business with clear performance expectations and a systematic review process then the people in the bottom 10% know who they are. When you share this with them they usually leave before they’re asked.

A business has no spare seats and there are no free rides; seats or roles are all filled with the right people, doing the right things, at the right time and in the right way. HR procedures and governance to manage the disruptor group requires significant amounts of time.

The challenge to a leader and manager is this: from a people perspective which group or groups of people are going to enable you to deliver the vision, goals and objectives of your organization at break neck speed? 

The top 20%

First: The top 20% – top performers

The challenge with top performers is that they coast in fifth gear. The exciting opportunity is that they always have reserves in the tank and can easily find sixth gear. The top 20% are probably team members who deliver consistently year-on-year. They need little management – you set the goals, point them in the right direction, and they’re off. They have a great attitude, are self-motivated and know precisely what they need to do in order to exceed their targets and goals. If you need quick wins, or to squeeze more results from the team, the top 20% are the people who’ll rise to the challenge.

Contact with your top 20% is key – not focusing on the specifics of what they are doing – just communicating with them, keeping them updated and informed and, most importantly, giving them the praise and recognition they desire. There is no mistaking the stars of a company; they are the best and are treated that way.

Second: The 70% – your heart and soul

The 70% represent a significant percentage and applying Pareto’s principle specifically to this category gives you a further level of worthy insight:

  • 20% are future top performers
  • 40% are the heart and soul and…
  • 10% are potential disruptors

The heart and soul of your team are enormously valuable to your business – 20% of these have the potential to be your future top performers. What are you doing to identify, nurture and develop this talent pool?

Knowing when to invest quality time

A word of caution – keep your eye on your future top performers to prevent them from becoming sliders. During the course of the year you might see differential performance as their motivation levels fluctuate or external distractions dilute their focus and drive. Spotting this is key as leader, manager and performance coach because knowing when you need to invest quality time to refocus and get them back on track is essential.

Forty percent are the heart and soul – they will deliver results. They need managing more closely, training, regular contact, focus, and tactful goal setting – but they’ll either hit or get close to their objective and goals. Ten percent are potential future disruptors – the people who do just enough. You need to question their attitude, commitment and values. Do they really want to be here? Do they really want to be part of a team?

Managing the 70% is about identifying people with potential to move up and cultivating them. Everyone in the middle 70% needs to be inspired and made to feel they belong. The 70% is where the majority of your time and effort should be spent and where you’ll see the greatest returns.

About the Author

Royston Guest is CEO of Pti Worldwide, a global consultancy and people development business with a proven track record in delivering business growth, people transformation and peak performance

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