The Formula for Effective Leadership Has Only Three Parts

Article main image
Jan 12, 2018

Each month I receive an email with a preview of the latest leadership books. There are always five or six new entrants in this already crowded field. Meanwhile, my Twitter feed overflows with three steps, five tips, and seven ways to improve engagement, build trust, and employ mindfulness.

Yet with all this knowledge available, employees don’t seem to feel as if they are being led any more skillfully than in the past. In my travels, I encounter people frustrated by seemingly arbitrary rules, vague visions, out-of-touch bosses, and a lack of development opportunities. They are confused by labor laws and company policies, which often are evolving more slowly than the work arrangements of an agile, tech-enabled economy. Further, data from Gallup has shown that workforce engagement has hovered around 30% for years.

This is why I was stopped cold recently by a simple formula for effective leadership. In the book The Leadership Challenge, by James M. Kouzes and Barry Z. Posner, first published in 1983, a CEO offers this straightforward philosophy: Grow the company profitably. Share the wealth with employees. Ensure that everyone is having fun.

As I reflected on this direct and open prescription, I wondered why anyone has ever felt the need to write anything else on how to run an organization. This seemed like an intensely prudent yet humane approach to business. Growth satisfies investors and provides funds to increase internal rewards, sustain training and fuel ongoing innovation. Sharing the wealth reflects consideration for the full range of stakeholders: employer, employee, and shareholder. And what better way to measure employee engagement than by people enjoying what they do? If you can pull off all three, it seems logical that the organization will thrive.

Perhaps, I wondered, we could take significant steps forward by forgoing fancy formulas and returning to the principles articulated back in 1983, being mindful to incorporate the changes brought by globalization, technological advances, and the increased diversity in the workforce.

To test my hypothesis, I reached out and interviewed people who are focused on engagement and leader development. I asked them to react to the quote from Kouzes and Posner’s book. While generally embracing the idea, each of them added important nuance that strongly emphasized humanity.

Focus on culture

Organizational psychologist Nicole Lipkin said that humanity “is the crux of everything” in organizations, yet, “We’ve gone against human nature in how we’ve designed them.” She said that excessive rules go against the “sticky culture” of a great team, one on which people appreciate one another and their respective contributions. Instead, these rules instill fear of stepping out-of-bounds. That stifles the willingness to treat people as people.

Lipkin summarized people’s needs using the SLAM model: social connection, leadership excellence, aligned culture, and meaningful life. “No matter how old you are, or your status, these are the things we need as humans,” she said. “We underestimate the social connections — they can make a mediocre job enjoyable. It requires leaders to pay attention to the pulse of the culture. We are so busy rewarding for performance that we forget to reward for the behaviors that make an organization a great place to work.” Lipkin noted that the expectations millennials have for flexibility, investment in their development, and work–life integration actually plays more into our psychological need for autonomy, competence, and relatedness and how we naturally interact with people than do industrial-age structures.

Give and take

Leadership coach and former Inc. 500 CEO, Alden Mills, is a former Navy SEAL and thus has learned from a group renowned for its leadership excellence. He told me that “to lead is to serve and to serve is to care.” There, once again, is the importance of humanity. Mills noted that although people want to be part of something larger than themselves, they also want a reciprocal process. Executives who expect employees to be all in for the mission yet treat them as disposable units of production fail to understand the second half of the equation. “Truly great companies treat their employees like they treat their customers,” he said.

Stop to connect

Modesta Lilian Mbughuni, a serial entrepreneur and human-capital consultant from Tanzania, reflected that when she launched her first venture, she thought that a vision that highlighted substantial tangible rewards would be enough. It fell short. “The people must have ownership in the vision,” she said. “They need to be enabled to accomplish it. If there is one investment you should make, it is [in] people.” She looks for service-oriented people who are interested in a purpose higher than themselves. She noted that there is a relatively small pool of top talent in Tanzania and multinationals can always pay them more. To attract and retain this talent, “I had to continually ask myself, ‘What did I do by them?’”

Mbughuni said that those who aspire to lead have to be humans first: truly “seeing people,” having genuine conversations, demonstrating respect, and being willing to say “I don’t know.” Some executives shy away from emotional encounters. She takes the opposite approach. “Sitting down for a heart-to-heart talk can be messy,” she said. “However, ultimately we are more efficient when we take time to stop and connect.”

Reframe the question

Executive coach Michael Bungay Stanier suggested a simple way for leaders to ask their subordinates effective questions: Adding the words “to you” to the end. For example, “What does this realignment mean?” invites abstract analysis. “What does this realignment mean to you?” makes it much more personal. It injects humanity into the conversation.

Commit to diversity

Anka Wittenberg, chief diversity and inclusion officer at global software firm SAP, is concerned with the challenges of creating an aligned culture, which spans many national boundaries, ethnic identities, and social norms. “I strongly believe that if we give people opportunities to grow and have fun, the company will grow,” she said. “However, some people are always left behind. Patterns and processes don’t include those who are underrepresented, so we have to think about the sustainability of the culture.”

To address culture sustainability, SAP has committed to actively foster diversity with four focus areas: gender, generations, cultures and identity, and disability. For example, the company met its goal of filling 25% of leadership roles with women last year. It has committed to hiring 650 people with autism by 2020.

Initiatives that open doors

Such initiatives open doors, though they also add complexity. Here, I think that the final component of Lipkin’s model is useful: making work part of a meaningful life. Meaning and satisfaction are derived through building skills and achieving goals as well as through participation in a welcoming culture. For example, Wittenberg noted that SAP’s research shows that when members of the LGBT community can out themselves in an inclusive environment, their productivity goes up 10 to 20%.

Should executives in 2018 revert to 1983? In some ways, yes — organizations are still populated by people and thus humanity matters. Given the increasing levels of technology, automation, and business rules that come with the efficiency of enterprise-wide software systems, finding ways to acknowledge people’s needs as humans is more important than ever. Globalization and increased diversity in the workplace also require a human focus if we are to create environments where as many employees as possible contribute to the fullest extent of their abilities.

The three principles stand the test of time as guideposts for thoughtful discussion of how to bring — and sustain — humanity in your organization. Don’t restrict your thinking about humanity to just an executive retreat and don’t be afraid of those messy conversations. “You must serve your people so they can serve you,” Mbughuni said. “They want to see their aspirations fulfilled —and they have options.” So, too, do leaders. I suggest opting for profitable growth, sharing, and embracing a bit of fun.

Adapted and reprinted with permission from “Putting Humanity First in Our Organizations” from strategy+business.  © 2017 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see for further details.

This post originally appeared on