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Rethinking Leadership

Today’s leaders must facilitate and empower innovation and change.

July 20, 2013
KEYWORDS c-suite , CEO , leadership
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An important distinction

The distinction between managing and leading is important. Not all managers, despite their job titles, are leaders. And not all leaders are managers. Management skills and leadership skills oft en exhibit themselves in different ways.

“Managing is making sure projects get done well and on time—it’s not so much about finding new solutions or new ways of thinking,” says David Birky, vice president of member development for $644 million asset Interra Credit Union in Goshen, Ind. “Leadership is more about vision and direction—it’s about looking at things from a different perspective, trying new solutions, and learning from mistakes.”

Neill offers this example to illustrate the difference between managing and leading. Consider a loan officer who finished September three loans shy of her goal. Someone who is overmanaging and underleading would conclude that she must close three more loans in October. That shows no understanding of September’s shortfall and no strategy for making more loans in October.

A leader would talk to the loan officer to determine what she plans to do differently, what she could change to be more successful at closing loans in October. This results in a change in behavior that leads to a change in outcomes.

“Management focuses on outcomes,” Neill says. “Leadership focuses on behavior because that leads to changes in outcomes.”

At Interra, leadership involves helping staff adopt new behaviors so they can achieve new results, says Birky. In that sense, he says leaders are change agents within organizations.

One of the biggest changes Birky brought about was introducing and creating a sales culture at the credit union. A sales culture was his mantra for a while before he convinced the credit union leadership team to take the plunge.

“Sales has traditionally been a dirty word in the credit union movement, so we talk about delivering service excellence,” he says. “If you provide excellent service, sales will follow naturally.”

Embrace change

Birky acknowledges the transition took longer than he expected. He cautions others who are considering bold cultural changes to have realistic expectations.

“It was about two and a half years before service excellence became an integral part of our entire operation,” he says. “And some employees never did embrace the sales culture, so we had to work through that as well.”

Introducing major initiatives or changing “corporate culture” is oft en difficult for some employees, says Cy Wakeman, a leadership consultant who uses her background in psychology to help managers, executives, and boards reframe their perspectives to embrace change, growth, and progress. Wakeman says credit unions don’t need to abandon loyalty to their employees to bring about change.

“You’re always going to lose about 10% of your workforce,” she says. “You should choose which 10% you lose. You’re going to lose either the best or the worst, and the best won’t stay if you hold on to the worst.”

Wakeman says forward-thinking employers give employees two choices when those employees are confronted with major, systemic change: Stay and adapt—or leave. Too oft en, though, employees push for—and employers grant—a third option: Stay while resisting change.

Employers tolerate these employees out of a misguided sense of loyalty or out of a fear of conflict. Either way, it’s not without cost. Other employees notice when the rules are different for some workers. It makes operations confusing and inefficient. Talented, ambitious employees who welcome new challenges will find those new challenges elsewhere. All this inefficiency and loss of talent eventually hits the bottom line.

Credit unions tend to focus only on the cost of letting some employees go, Wakeman says, but they overlook the cost of letting those employees stay. “They’re doing bad math,” Wakeman says. “They’re being loyal to the wrong employees.”

Assuming that some turnover will accompany change isn’t as harsh as it might sound. “You first give people the opportunity and the tools to change and succeed,” Neill says. “Give people the training they need and most people will adapt. Those who don’t will leave, but not before you did everything you could to create success.”

Analysis paralysis

Turnover isn’t the only concern credit unions have when embracing new leadership and change.

“A frequent impediment to bringing about change is overanalysis,” Birky says. “We need to analyze data and make the best decision we can, but we can’t wait for perfect data.”

Birky isn’t suggesting that credit unions shoot from the hip, but he does warn about “analysis paralysis.” He encourages credit unions to be bold and to not let fear of change or failure prevent them from innovating. Credit unions simply need to identify risks, assess them, and guard against them as best they can before taking action, he says. Aft er all, leaders don’t just consider opportunities; they create and act on them.

“You can’t be afraid to fail, and you have to assure the people working under you that it’s OK to make mistakes and fail so long as they learn from it and move forward,” Birky says. “The best advice I would have is to do something—make a decision today.”

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Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory (www.appreciationatwork.com/assess) will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

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