Running a business is not a democracy

Many leaders believe they need to build consensus. By building consensus, they think they will develop greater harmony, solidarity and even better overall alignment in their organization.  The actual outcomes of consensus-based decision-making are less robust than you might think.  Decision-making can slow down; everyone has an opinion and will stand by that opinion. Personalities can plan a role: Team members react to personalities and not the decision itself, and decisions can be watered down to appeal to everyone.

Does this mean that collaboration is not a key strategy used by great leaders? Don Rheem, in his new book, “Thrive by Design,” has identified three types of leadership. Leadership 1.0 is the old line “command and control” type of leader, defined by traits of dominance, hierarchy, rewards and punishment.  It is a top-down model.  This is the style I grew up in.  Interestingly enough, people did not change jobs often. This is not because they had great leaders, but because the supply of labor exceeded the number of jobs.  Employees stuck around for their gold watch because there was nowhere else to go. Not much consensus-making in this model.

Leadership 2.0 places a high value on the leader’s behavioral style and his or her image and vision.  These leaders are  generally inspirational, charismatic and motivational; they often emphasize an  exciting vision.  The 2.0 leader still tends focus on immediate outcomes and operational efficiencies rather than the longer-term goals. This leader is more focused on relationships, but still relies on hierarchy and comes across more like a disciplinarian than a trusted colleague.  This is where we are today.  I am sure we can all name some CEOs who would fit this mold.  Employee retention and engagement are an issue due to the increased supply of jobs and decreasing labor pool.  Now you hear everyone say, “We cannot find any great talent.”  There is some collaboration in this leadership style.

Leadership 3.0 is focused on workplace ecosystems, including the quality of social interactions necessary to create a safe and productive work environment.  A 3.0 leader is transformational, team-focused and collaborative.  They want to support the strengths of their teammates while helping them improve. This is more like a coach than a boss. The 3.0 leader is more strategic and positive. They are pro-culture and pro-employee.  Collaboration abounds.  We need to move to this model now.

The bottom line is that people don’t want to be treated like children – always told what to do. When employers act like a “boss” and say we are going to do it “my way,” the result is really disengaging.  This does not mean that employees don’t want a strong, effective leader.  People like strong leaders because people like to outsource the big decisions.  Most do not wake up in the morning looking to take on a huge, stressful decision.  We need strong, decisive leaders to help with that decision-making.

Employees want to follow a leader who makes them feel their opinions are heard, considered and important.  They want to feel valued.  They still want a strong, decisive leader.  Running a business is not a democracy. Leaders still need to make the final decision.

A CEO coach to countless business leaders, John Dame (“JD”) is an executive team consultant and leadership strategist. He is moderating an upcoming Lancaster Chamber event, “Pathways to a Successful Exit” on Oct. 20. For more information or to register, click here or call (717) 397-3531 .

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