The impact of caring leadership on corporate performance
Recently named the #3 CEO in the world in an Inc. magazine article, and the SHRM Foundation: 2022 Tharseo CEO of the year, Bob Chapman is the chairman of Barry-Wehmiller Companies.
A global supplier of manufacturing technology and services based in St. Louis, Missouri, United States. With revenue of over $2 billion, over 11, 000 team members spread across more than 100 locations globally.
Although Barry-Wehmiller was founded in 1885, Bob became the CEO in 1975 at age 30 after the death of his father. At this time the company had been stagnant for decades and was in a precarious situation.
According to Bob, “When my father died, Barry-Wehmiller had revenues of around $18 million, two or three million dollars of debt, and negative operating income of $477,000. It employed just under four hundred people, with three unions in the production and engineering areas.”
Five years later under Bob’s leadership, Barry-Wehmiller’s revenues climbed steeply, from $18 million to $71 million. Since 1984 Bob has successfully acquired over 90 companies, which he actually began without money, having little experience and no credibility.
Most of those companies were in distress. But he always had a way of turning them around. In one of those companies – Paper Converting Machine Company in Green Bay – one day, one of Bob’s senior leaders sent him an email urging him to spare some time to talk to a group of people in the company.
This group had gone through the leadership classes in the company and so, in practice, have invested their time and initiative to come up with processes that have improved performance in the company. Bob immediately requested that they’re brought into their executive meeting the next morning so they could talk to everyone. When they finished their presentation.
Bob, from the blues, asked, “how has that affected your life?” Steve spontaneously – as he didn’t know he will be talking to these executives let alone respond to such a question – said, “my wife now talks to me more.”
It turned out that Steve Barlament prior to this time in the company would get back to the house each day, while standing at the door, throw his hat into the house. If the hat got thrown back outside, he would get down to the bar and drink some beer.
But if it didn’t get thrown back, he’d go in. Steve always felt empty after work each day and got home being unnice to his wife. His workplace left him feeling bad about himself and his work; they were only told what to do and scarcely given the tools they needed to do them.
No one listened to them. Nobody noticed when they did ten things right yet they got chewed out for one thing done wrongly. As Bob began to turn things around in the company and introduced the Leadership program, Steve said, “…I realize now, in hindsight, that when I wasn’t feeling good about myself, I wasn’t that nice a person to be around.
That was basically every day. But since we began this L³ program, I’ve been part of making things better. People ask me what I think; they listen to me, and I actually have a chance to impact things, including my own job… “I can go home feeling that I’ve done a good day’s work, not wasted the day chasing parts or feeling resentful. When I feel respected and know I’ve done a good day’s work, I feel pretty good about myself, and I find when I feel better about myself, I’m nicer to my wife, and you know what’s amazing? When I’m nicer to my wife, she talks to me.”
Many businesses have toxic influences on their people. How many people leave work each day feeling unvalued and that their organizations don’t care about them. Business leaders must understand that employees are people too. They are not a means to reaching the numbers nor are they the functions they perform.
The truth is that how we treat people will determine how they will treat the people around them – family, customers, colleagues, community etc. Years ago, a young lady I know who was the administrative head of an Academic institution in one of the states in Nigeria, beat her son in anger for making a certain comment in the morning while she was getting ready to work.
Not because her son had done anything worth the beating; she was emotionally swamped by the toxicity in her workplace especially from her boss. Business leaders must learn to lead with compassion. Most people suffer in the workplaces without their leaders noticing.
Of course, our workers must adapt to changes – technological advancement, demands of impressive outcomes, outburst of infectious diseases like covid19, organizational transformations, change in competitive landscape etc. Yet leaders must never ignore the fact that these changes come with suffering or pain for their people.
Consequently, how they treat these workers in their pain has an enormous effect on the bottom line of their businesses, their ability to innovate, render quality services and even become their sustainable and non-replicable competitive advantage.
Gallup’s research after the September 11 attack, revealed that leaders who excellently responded with care to their people had 48% of their employees engaged, and only 6% of employees actively disengaged, or fundamentally checked out.
For individuals in companies where the response was poor, only 11% were engaged and a crushing 39% were actively disengaged. And according to Gallup “When compassion is called for, know that your bottom line is at stake.”
Recently, a multinational company in Nigeria laid off, without a winding down period, an employee who is an accountant, as part of the merger process. The employee went to HR, submitted his laptop and left. Few days later he was compelled under humiliating circumstances to come back and help with reconciliation and properly hand over.
Situations like this will always have adverse effects not just on the exiting worker but on the residual employees. But a caring leader will take responsibility for her people no matter the circumstance. After Netflix had gone public in 2002.
They didn’t have need for the bookkeeper they had at the time who actually was responsible for developing a system for them to track their monetary processes effectively. They were bringing in accounting professionals.
This is one of those cases where organizational change can bring pain or suffering on the workers. Patty McCord, who was the chief talent officer at the time, called the bookkeeper into her office, gave her the news and offered a good severance package to help her move on with her life.
That’s how caring leadership approaches issues like this. And you know this approach infixes confidence in your people that you care. And unequivocally, they will give their whole heart to the work they do and even treat others with compassion too.
Leaders who occupy positions of authority must understand that people look up to them in difficult times. They don’t bother about your luxury office, car and even the special parking space. They will serve you; open the doors for you to go through, pour water on your hand etc.
But they’ll expect you to protect them and care for them and not sacrifice them – lay them off – for the numbers; just to ensure you’re making profit. Caring leadership is what drives and sustains learning and innovation in many organisations.
A Harvard scholar Amy C. Edmondson, the author of The Fearless Organization, studied the healthcare industry. She was surprised to find that high performing teams reported more errors than low performing ones.
Turns out that there are so many errors that don’t get reported; they go unnoticed or ignored because the team members don’t experience or express care; no one cares about another. And so those who make mistakes, because of social threat, are afraid of reporting them lest they appear stupid or are treated as victims.
And because of that not much learning and improvement takes place among such teams. However, teams where compassion or care is expressed and experienced actually get to report high rate of errors; they feel safe do so, as well as talk about them and make adjustments that improve their performance Leaders need to create a culture where people see themselves as brothers and sisters and so care for and help each other succeed.
It begins with the leader leading with compassion. You have to believe in the fundamental goodness in people and treat them the same way.
Godswill O. Erondu is the pioneer, Africa Workplace Leadership Summit. A leadership expert that works with organizations – private and public – to transform their leadership and culture in order to achieve superior performance and increased productivity.