Running a business is no walk in the park. There will be days when the store or office will run so smoothly that it barely needs someone to manage it. However, there will be times when problems arise and a leader is needed to make decisions that can save the business or doom it to failure.
These instances are why a leader must have the right traits, skills, knowledge, and experience. With a good leader at the helm, a venture can go through and survive any crisis that the world throws at them. With a bad leader, things could go out of control really quickly.
There are two options to save a business from bad leadership. Upper-level management can go through leadership coaching and programs like Miick to learn how to better support their team and make decisions that benefit the big picture. The second option is to kick the ineffective manager or executive out and hire a more competent head of a department or organization.
For now, here are a few facts about bad leadership and how it is destroying a business.
Bad Leadership is Common
Bad leadership is, unsurprisingly, very common. In fact, one study estimated that bad leadership affects 10-16% of employees in the United States.
It does more damage than just bring down the satisfaction of employees in the workplace. Researchers pointed out that bad leadership costs a company close to $24 billion a year. The repercussions of abusive and destructive supervision include absenteeism, reduced overall productivity, healthcare, and hiring and onboarding of new employees because of a high rate of resignations.
Bad leadership does not happen over the span of a day. It is a habit that unravels the company from the inside-out bit by bit. Refusing to make changes will only lead to further problems down the road. Employees may grow to resent their bosses and gain a negative view of the organization.
Bad Leadership Trickles Down
The actions and behaviors of leaders have an impact on the actions and behaviors of employees. A good leader can influence their team to work harder and to think out of the box. A bad leader can do the opposite.
A bad leader can also bring out the worst in other leaders within the organization.
One study looked at and matched 265 pairs of high-level managers and their mid-level manager reports. The researchers also tested 51 behaviors and examined overall performance.
They found behaviors that appear to be contagious, including developing self and others, technical skills, strategy skills, consideration and cooperation, integrity and honesty, and others. These behaviors had the highest correlations between the managers and their respective direct reports.
In terms of performance, the researchers noticed that high-level managers that were rated highly are more likely to have mid-level manager reports who performed far above average. In contrast, the worst-performing high-level managers had below-average mid-level managers.
In short, if you work for an ineffective and inefficient boss, you likely will be the same, too.
Having Good Leaders: One of the Best Employee Perks
The quality of leadership trickles further down into the organization. A bad leader can create a toxic working environment that is abusive, unsupportive, and demotivating to the rest of the team. One previous report found that up to one in two employees has resigned from a previous position to get away from a manager.
Moreover, the effects of having a bad leader directly impact the physical and emotional well-being of employees. Employees bring stress at home which impairs their nutrition, physical activity, and sleep. If the company has made an investment in programs that lower healthcare costs, a bad leader negates any effort.
A survey revealed that the average health benefit cost per employee has increased by 16% over the past five years. Much of it may have been caused by stress that comes from having a bad leader creating a toxic working environment.
A bad leader is costing the business a lot of money. The performance of leaders should always be evaluated to ensure that they continue to steer the business toward the path of success, not swerve it toward failure.