Managing people

The Most Common Type of Incompetent

Leader
A young friend recently remarked that the worst boss he ever had would provide him with feedback
that always consisted of “You’re doing a great job.” But they both knew it wasn’t true — the
organization was in disarray, turnover was excessive, and customers were not happy. My friend
was giving it his all, but he needed more support and better feedback than he received. He wanted
a leader who would be around when he needed them, and who would give him substantive advice,
not platitudes. As a measure of his frustration, he said, “I would rather have had a boss who yelled
at me or made unrealistic demands than this one, who provided empty praise.”

Researchers have studied managerial derailment — or the dark side of leadership — for many
years. The key derailment characteristics of bad managers are well documented and fall into three
broad behavioral categories: (1) “moving away behaviors,” which create distance from others
through hyper-emotionality, diminished communication, and skepticism that erodes trust; (2)
“moving against behaviors,” which overpower and manipulate people while aggrandizing the self;
and (3) “moving toward behaviors,” which include being ingratiating, overly conforming, and
reluctant to take chances or stand up for one’s team. The popular media is full of examples of bad
leaders in government, academia, and business with these characteristics. However, my friend was
describing something arguably worse than an incompetent boss. His manager was not overtly
misbehaving, nor was he a ranting, narcissistic sociopath. Rather, his boss was a leader in title
only — his role was leadership, but he provided none. My friend was experiencing absentee
leadership, and unfortunately, he is not alone. Absentee leadership rarely comes up in today’s
leadership or business literature, but research shows that it is the most common form of
incompetent leadership.

Absentee leaders are people in leadership roles who are psychologically absent from them. They
were promoted into management, and enjoy the privileges and rewards of a leadership role, but
avoid meaningful involvement with their teams. Absentee leadership resembles the concept of
rent-seeking in economics — taking value out of an organization without putting value in. As such,
they represent a special case of laissez-faire leadership, but one that is distinguished by its
destructiveness.

You and Your Team Series

Emotional Intelligence

Having a boss who lets you do as you please may sound ideal, especially if you are being bullied
and micromanaged by your current boss. However, a 2015 survey of 1,000 working adults showed
that eight of the top nine complaints about leaders concerned behaviors that were absent;
employees were most concerned about what their bosses didn’t do. Clearly, from the employee’s
perspective, absentee leadership is a significant problem, and it is even more troublesome than
other, more overt forms of bad leadership.

Research shows that being ignored by one’s boss is more alienating than being treated poorly. The
impact of absentee leadership on job satisfaction outlasts the impact of both constructive and
overtly destructive forms of leadership. Constructive leadership immediately improves job
satisfaction, but the effects dwindle quickly. Destructive leadership immediately degrades job
satisfaction, but the effects dissipate after about six months. In contrast, the impact of absentee
leadership takes longer to appear, but it degrades subordinates’ job satisfaction for at least two
years. It also is related to a number of other negative outcomes for employees, like role ambiguity,
health complaints, and increased bullying from team members. Absentee leadership creates
employee stress, which can lead to poor employee health outcomes and talent drain, which then
impact an organization’s bottom line.

If absentee leadership is so destructive, why don’t we read more about it in the business literature?
Consider a story I recently heard about the dean of a well-known law school: Two senior, well-
regarded faculty members called the provost to complain about their dean because, they said, he
wouldn’t do anything. The provost responded by saying that he had a dean who was a drunk, a
dean who was accused of sexual harassment, and a dean who was accused of misusing funds, but
the law school dean never caused him any problems. So, the provost said, the faculty members
would just have to deal with their dean.

Like the provost in this example, many organizations don’t confront absentee leaders because they
have other managers whose behavior is more overtly destructive. Because absentee leaders don’t
actively make trouble, their negative impact on organizations can be difficult to detect, and when
it is detected, it often is considered a low-priority problem. Thus, absentee leaders are often silent
organization killers. Left unchecked, absentee leaders clog an organization’s succession arteries,
blocking potentially more effective people from moving into important roles while adding little to
productivity. Absentee leaders rarely engage in unforgivable bouts of bad behavior, and are rarely
the subject of ethics investigations resulting from employee hotline calls. As a result, their negative
effect on organizations accumulates over time, largely unchecked.

If your organization is one of the relatively few with effective selection and promotion methods in
place, then it may be able to identify effective and destructive leaders. Even if your organization
isn’t great at talent identification, both types of leaders are easy to spot once they are on the job.
They also produce predictable organizational outcomes: Constructive leadership creates high
engagement and productivity, while destructive leadership kills engagement and productivity. The
chances are good, however, that your organization is unaware of its absentee leaders, because they
specialize in flying under the radar by not doing anything that attracts attention. Nonetheless, the
adhesiveness of their negative impact may be slowly harming the company.

The war for leadership talent is real, and organizations with the best leaders will win. Reviewing
your organization’s management positions for absentee leaders and doing something about them
can improve your talent management arsenal. It’s likely that your competitors are overlooking this
issue or choosing not to do anything about it, like the university provost. Doing nothing about
absentee leaders is easy. Just ask any absentee leader.
Change management

How Volvo Reinvented Itself Through Hiring

Many legacy companies would like to transform themselves into agile, talent-first organizations.
But when some CEOs in this position look at the people they employ, they discover a problem: a
swath of their existing team doesn’t have the necessary skills or metabolism for change to meet
the new challenges.

Developing what we call an “M&A strategy for talent” is one way to overcome this. Volvo’s
turnaround over the last decade offers a great example. For years, Volvo was a brand stuck between
a rock and a hard place. Its cars didn’t match up well with those of top luxury brands like Mercedes,
BMW, and Audi, yet the company lacked the capacity to compete with mass-market leaders like
Toyota and GM. Under new ownership (Volvo was sold to China’s Geely by Ford in 2010), the
Swedish automaker decided to transform its product line by becoming a premium player. CEO
Stefan Jacoby and CHRO Björn Sällström rigorously examined Volvo’s existing workforce. The
result was clear: to move into the premium-brand tier, Volvo needed new people with different
skills. “Technically, cars today are very different from ten years ago,” says Sällström, whom we
interviewed for our book, Talent Wins. “Once, you needed mechanical engineers. Today, there’s
a greater need for software engineers because cars are computers more than anything else.”
Sallstrom had a second reason for looking outside the company: He and Jacoby believed that only
an infusion of fresh talent could transform Volvo’s culture into an entrepreneurial one.

Volvo took three critical steps to ensure that its outside-in transformation would work. The first
was to put Sällström at the heart of the initiative. The CHRO needs to be at the center of any
acquisition of talent from the outside. This is true for pure acquisitions of talent, like the acquihires
that are so popular in Silicon Valley. But it’s also true for more traditional M&A, where CHROs
are too often sidelined, rather than being central to driving strategy. Today’s talent-driven
companies know that talent is what drives outsized value. That’s why they deploy financial and
human capital together, aligning the two for maximum impact. At these companies, the CHRO
plays a central role in any kind of acquisition. While Volvo didn’t acquire companies as it went
looking for outside talent, CEO Jacoby, and his successor, Håkan Samuelsson, counted on
Sällström to find what the company needed in places it had never explored before.

That brings us to the second step: expanding the company’s peripheral vision. To get the skills and
change agents it needed, Volvo looked outside the automotive industry. Sällström mapped outside
industries, looking for people with pertinent skills. He was creative and, in some cases,
counterintuitive. He hired salespeople and marketers from Google, who transformed Volvo’s use
of technology and social media in those disciplines. He hired Nokia engineers, who were
accustomed to thinking about what digital forms appeal to consumers, to redesign radio and
navigation systems. He and Samuelsson looked to the fashion industry, hired craftsmen, and shook
up the managerial ranks by hiring executives who had conceived and executed significant strategic
shifts at bigger companies. Between 2011 and 2015, the company added 3,000 new people in
engineering and development.

Third, the company developed a strong system for integrating that new talent. Communication was
vital: Jacoby first described the strategy shift to Volvo’s key 300 employees, while Samuelsson,
following his predecessor’s lead, holds regular live chats with employees. Training was also
essential: Jacoby and Sällström implemented a range of initiatives designed to shift the staff into
a more entrepreneurial mindset, and each of the 300 key leaders was given a personal coach.
Implementing change through the company’s networks also helped. Jacoby created a thirty-person
“catalyst group,” mostly of younger employees, and charged it with showing others in the
organization that work could be done differently. For example, its members asked why every
design change in a car required a dozen signatures and managed to cut that number in half. “The
small things in a transformation,” says Sällström, “can send a signal.” After two years of getting
the company to think more entrepreneurially, the catalyst group disbanded—further proof of the
company’s new aversion to unnecessary overhead.

It’s still too early to say that Volvo has definitely turned itself around. Says Sällström: “Even with
all this outside DNA, it’s a long journey to change the mindset of an organization. It’s still a work
in progress.” Financial signs are certainly pointed in the right direction. Net revenue hit an all-time
high in 2017, and profits rose for the third consecutive year. The company sold 571,000 cars last
year, up from 373,000 in 2010. Volvo has carved out a spot in the competition to introduce
autonomous cars. And its cars are winning rave reviews: According to Edmunds, the XC90 SUV
“puts Volvo right back in the game.”

Volvo’s actions offer a textbook case in how to go outside the company to retool your workforce
for a transformational initiative. CEOs must have a strategy for “talent M&A”—that is, how they
will aggressively target pools of external talent to keep ahead of new strategic opportunities. This
means expanding their talent horizon, especially when the biggest threats and opportunities may
come from out their traditional industry. And it means implementing the transition with care to
avoid “organ rejection” of externally sourced talent. Reaching outside to transform your company
is sometimes necessary, but it’s always complicated. Volvo offers a road map of how to pull it off.
Why Walmart Expanded Parental Leave —
and How to Convince Your Company to Do
the Same
Walmart will soon offer better parental leave than most U.S. companies. The new policy for
biological parents, announced in January, will go into effect on March 1, according to a company
spokesperson. The company already has rolled out a more generous policy for adoptive parents.

This matters because America remains one of just three countries without paid maternity leave,
and Walmart is America’s biggest employer. With 1.5 million U.S. employees, its workforce is
bigger than the populations of roughly a dozen U.S. states. While the policy only applies to full-
time workers, that is still hundreds of thousands of people.

And since only 14% of civilian U.S. workers have access to any paid parental leave, employees at
most American firms can now say the words, “I’d have better parental leave if I worked at
Walmart.” That creates – at least in theory – pressure on other companies to follow suit. Indeed,
since Walmart announced its new policy, Starbucks announced that it would be expanding its
parental leave benefits as well.

The new Walmart policy: 10 paid weeks for birth moms and 6 weeks for other new parents,
regardless of whether the employee is hourly or salaried. That’s much more than employees get at
firms with which Walmart competes for workers, such as hourly workers at Yum! Brands, another
large employer, which operates Taco Bell, KFC, Pizza Hut, and others, where store managers get
6-8 weeks if they’re birth mothers, and nothing at all if they’re biological fathers. (Executives get
more, but hourly workers get nothing.) And at McDonald’s? New parents in management roles get
a single week. That’s right: one week. Hourly workers? Again, they get nothing.

But Jackie Telfair, Walmart’s SVP of Global Compensation, told me this move was not about
competing for workers with other companies. Instead, she said, it’s “an investment in our
associates…[and] if we invest in our associates, they will invest in our company.” Telfair said they
knew the benefit would be important to their employees. “We knew from our associates that this
was a benefit that was important to them,” she told me.

Walmart also recognized that what when workers have stability at work, they can thrive at home,
according to Telfair. And when they can thrive at home, they’ll have better work engagement,
performance, and productivity. In other words, this was a business decision. Walmart’s view is
that, from a human capital management perspective, expanded parental leave makes a whole lot
of sense. This is borne out by the data: research has shown that paid leave increases not only the
probability that new mothers will return to their jobs, but also increases they hours they work when
they do so.

What’s remarkable about Walmart’s move is that it’s not just workers in low-paying jobs who are
likely to cast an envious eye over Walmart’s paid parental leave. It’s also people who work at more
“elite” employers, like Princeton University, which offers employees just two fully paid weeks,
and Wellesley College, which offers just four. It includes employees at General Motors and Ford,
where new mothers get only 6-8 weeks at both, and new fathers get 2 weeks and bupkis,
respectively. It includes workers at Cargill (two weeks) and Boeing (three) and CVS (six).

So why did Walmart — sued just a few years ago by 1.5 million female employees for gender
discrimination — become a leader on parental leave? Walmart has attributed the move to the
recently passed corporate tax cut, as have other companies expanding benefits or handing out one-
time bonuses, but there are reasons to be skeptical of this. For one thing, the U.S. is currently near
full employment, meaning the labor market is tight; companies know they need to work harder to
get the best candidates. And corporate profits have been at all-time highs for years; I have trouble
believing that companies flush with cash couldn’t afford to offer paid leave earlier. While
companies will save money as a result of new U.S. tax policies — Politico estimates Walmart will
save $1-2 billion a year under the new plan — studies show that the costs of offering paid leave
are minimal: a study in California, which is one of a handful of states to mandate paid leave,
showed that 87% of employers said offering paid leave cost them nothing, while 9% said it actually
helped them save money.

Moreover, says Katie Bethell, Founder & Executive Director of lobbying group Paid Leave for the
United States (PL+US), the status quo has become seen as a risk. “There’s starting to be brand risk
for being a company that doesn’t support family leave,” she says, “and there’s gender
discrimination risk if you’re only offering it to women and not to men, or if you’re undermining
women’s ability to succeed in your company.” This isn’t just hypothetical. Several companies —
including CNN, JP Morgan Chase, and Estee Lauder have all been sued by men making the case
that giving them less leave on the basis of their sex was illegal. Between 1998 and 2012, family-
leave discrimination lawsuits shot up 590%, according to estimates from the Center for WorkLife
Law — even though overall, discrimination lawsuits fell.

Despite the strong business case for offering paid leave, most companies still need to be convinced.
Bethell outlined four things that may have been part of Walmart’s decision to offer paid leave:

Broad employee support. Showing that there’s broad support for a new policy in your
organization is important, says Bethell. In Walmart’s case, she pointed to a petition for better
policies that garnered thousands of employee signatures. A Walmart shareholder also introduced
a resolution calling for better paid leave about a month before the company announced the new
policy.

Persuasive stories. Statistics and numbers are always helpful, but “you need to be able to go to
your decision-maker with stories of real employees who are affected by the inadequate family
leave policy,” Bethell says. “Those stories are especially powerful if they relate to the recruitment
and retention of talent.” Stories like a job candidate you really wanted to hire turning you down
because of your leave policy, or someone talented leaving the organization because of a bad
experience with parental leave. “Those are the kind of stories that really ring with leadership, and
really highlight for them the market opportunity they are missing.”
Bethell highlighted the story of one employee who had come back to work at Walmart just one
week after giving birth even though her baby was in the neonatal intensive care unit (NICU).
(According to Department of Labor data, about one in four U.S. women return to work within two
weeks of giving birth.) She couldn’t afford not to work. Employers hear that kind of story, says
Bethell, and say to themselves, “That’s not the kind of employer I want to be.”

A strong proposal. Bethell said employees who want better leave policies should not stop at
saying that the current policy is inadequate – they should let their corporate decision-makers know
exactly what they want the new policy to be.

While there’s more to a comprehensive policy than a certain number of paid weeks, that is often
the central question. What’s the ideal length, then? Some experts have put it at between six months
and a year. That’s the point at which babies are (often) sleeping through the night, smiling,
remembering faces and interacting with their caregivers, and eating solid foods. But since almost
no U.S. companies are that generous, employee advocates will have to decide what they can settle
for. Collecting data on what competitor firms offer is tough: when PL+US surveyed the largest
employers in America a couple of years ago, many refused to disclose their policies. Websites like
Fairygodboss or Glassdoor can help, but are often incomplete since the information on those sites
is crowdsourced. And the state of paid leave in the U.S. is so dismal, advocates may have a hard
time making the case that “we should do this because everyone’s doing it.” Instead, would-be
changemakers can try to make the case that their companies should be leaders on this issue rather
than laggards.

Persistence. Any successful change effort requires more than a single meeting. Bethell estimates
that it took about a year of concentrated effort on the part of employees and activists to convince
Walmart management to change their policy. That would not be out of line with efforts I’ve heard
about at other companies. For example, when women at the New York Times lobbied for an
expanded leave policy, they spent months researching other companies’ policies and building a
business case. “I’d be lying if I said it was a smooth road from the time five of us decided to write
a proposal over lunch to its ultimate approval by our executive committee,” Erin Grau, VP of
Operations at the New York Times, told Fairygodboss in an interview, “But it was worth it.”

After all, as Bethell puts it, “You’re talking about a benefit that everyone needs, regardless of what
job they have.”