It’s natural for leaders to emphasize the importance of hitting financial targets, but making numbers the centerpiece of your leadership narrative is a costly mistake. Financial results are an outcome, they’re not a root driver for employee performance, and a growing body of evidence tells us that overemphasizing financial targets erodes morale and undermines long-term strategy. Leaders looking to motivate employees must instead use their time with their teams to build belief in the organizational purpose. How to achieve this? What tactics can we use?
Leaders seeking to ignite creativity and drive exponential effort must go upstream, using their time with their teams to build belief in the organizational purpose, the intrinsic value of the employees’ work, and the impact the teams have on customers, and each other. Here are three ways to do that:
- Evaluate your leadership “airtime.” When Mike Gianoni took over as the CEO of SaaS firm Blackbaud, he flipped the way they conduct town halls. Previous leaders spent the majority of their airtime sharing financial results. Gianoni took a different approach. He began using his time to discuss the impact Blackbaud was having on customers, and he directed his leaders to do the same. When people feel good about what they do and they’re more successful, they’re not going to look for another job. We recommend leaders aim for a 50/50 split, spending at least half their leadership airtime building belief in the meaning and external impact of the work, and half on internal metrics and deliverables. It’s not without coincidence that six months after Blackbaud adjusted their leadership airtime, they had an innovation breakthrough, employee engagement rose dramatically, market share increased, and revenue grew exponentially.
- Discuss individual customers with emotion and specificity. The more clearly an employee understands their direct impact, the more likely they are to go the extra mile; they also experience greater fulfillment in doing so. When we know our work matters to an individual person, we rise to the occasion. Discussing customers in the aggregate does not create the same emotional pull. Instead, when you speak about customers, even if your team does not interact with them directly, use their real names, talk about the businesses they have, and show your team that real people are counting on them.
- Resist the pull of the “FYI.” In our consulting practice we routinely observe well-intended leaders who in an effort “to keep their team informed” pass along everything that pertains to financial performance. It’s natural, because the gravitational pull of most organizations leans towards the numbers; it’s what gets reported and thus it’s routinely forwarded down. You can decide what to share and what not to share by asking yourself questions like: What does my team need to be thinking about on a daily basis to accomplish these goals? How do I want them to behave with customers and each other? Filter out the noise coming from other places in the organization and focus your language on the two things that are 100% within the control of your team: their mindset and their behavior.
As we face a future of potential uncertainty and unrest, it’s crucial for leaders to help their teams stay engaged. You can improve your team’s performance (and their emotional well-being) by making sure your airtime, your metrics, and your language communicate one simple message: Your work matters.
Earle Mcleaod, L. & Lotardo, E. (2021, February). Financial Targets Don’t Motivate Employees. Harvard Business Review.